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I It wasn’t taken by surprise, exactly. I run a small perfume company and in mid-December we stopped shipping deliveries to European Union countries because we wanted to make sure nothing got caught up in the rush to beat the new business rules. Somehow, I had been preparing for such issues since the Brexit referendum was called several years ago. I always feared there would be difficulties for small businesses.
A little over a month into the new regime, it is clear that with each new obstacle, additional fees have to be paid. Whether it’s importing raw materials or shipping our products across the EU, additional forms need to be filled out and costs go up. Our perfumery is dealing with new customs rules and new VAT regulations, and is losing access to the EU cosmetics market. At midnight on December 31st, all of our perfume products automatically became illegal in the EU.
It could make them legal again. To do that, you would need an EU-based representative, a legally designated responsible person (RP), but to set this up, the companies offering the service are listing up to £ 1,000 a year per product, and we have 60 different items to sell. . That’s an additional £ 60,000 of annual spending that we don’t have. We will find a way to make it all work eventually, but until we understand the VAT issues, it doesn’t make sense.
One of my friends in the industry thought he understood the new system – last year he confidently said that it would only require an extra sheet of paper and nothing to worry about. However, in January, a courier company charged one of its EU-based clients an additional fee of £ 130. He still doesn’t know why. For many of us in the independent cosmetics sector, a world away from multinational brands, we have to stop our sales to clients in the EU until we can solve these problems. Losses for our companies are increasing.
Another friend has a wholesale order destined for Germany, but it’s stuck in customs somewhere. A second order left for Spain but only made it to Middlesbrough because the store owner now has to be a registered importer. It will take about three months to register with the Spanish system due to the sudden post-Brexit fever, combined with a build-up of Covid-19.
Until Brexit was finalized, all cosmetics companies followed EU regulations designed to ensure that all products used on people’s skin and hair were safe. When things turned around, some of our British customers were delighted with us, imagining that we would be free from EU limitations and suddenly allowed to use large amounts of previously restricted materials such as jasmine, rose and carnation. But what actually happened was that in 2019 the government copied and pasted the EU regulations directly into UK law. I saw official announcements about how we would all be free from the EU bureaucracy, knowing that it was not entirely true. We have shiny new UK regulations that are exactly the same as the ones that existed before, so what was the point?
At the end of January, the Department of International Trade organized an online chat to advise on trade with the EU and the rest of the world. It started with a man telling us: “We have eliminated the bureaucracy and we are leaving the EU.” He spoke of bureaucracy as if it were a single shiny ribbon that Boris Johnson had cut with huge scissors to free us to take over the world, like the start of the Great North Run. He then proudly told us that 5,000 companies were participating in this DIT talk, as if that was a good thing, rather than because thousands of small business owners were desperately trying to figure out the new rules that had a drastic impact on their media. of life.
Meanwhile, there are hundreds of small cosmetic companies in Britain selling to local markets in the country and on Etsy for orders beyond. The lip balm and soap makers that I know used to assess the safety of their cosmetics and then they would simply ship order by mail, whether they were customers from the UK, Ireland or the rest of the EU. To continue to do so now, they would have to register for VAT and appoint a PR at great cost. With local markets closed due to Covid-19 restrictions, effectively removing access to online customers from the EU is a terrible blow. Without this source of income, many businesses will not be viable.
When Britain finally reached a trade deal with the EU in late December, it didn’t seem wise to rush everything as the world battled the pandemic. The deadlines for tax returns have even been extended. What small businesses needed was to stay in the single market and the customs union while we recovered from the impact of the blockade. But we are not, and we have to move on; however, we really needed time to absorb all the new rules that we face to sell our products outside of Great Britain. Our politicians dismiss this as an initial problem, or it is worth it for some staggering benefits that have yet to materialize. They don’t listen to us.
