Some UK companies could forgo importing goods due to new rules implemented in the new year, a former senior Brexit planning official has warned.
Philip Rycroft, who served as permanent secretary of the Department for Exiting the European Union (DExEU) between 2017 and 2019, said many companies “will not be ready” for the changes, having already had a “scorching year” .
He predicted that the rules, which took effect on Jan. 1, would cause “startup problems” with some sectors hit harder than others.
Prime Minister Boris Johnson has pledged to “maximize the benefits of Brexit” in 2022, saying the government “will go further and faster” to take advantage of “the enormous potential our new freedoms bring.”
The changes in effect from January 1 mean importers must make a full customs declaration on goods entering the UK from the EU or other countries.
Traders are no longer able to delay the completion of full import customs declarations for up to 175 days, a measure that was introduced to deal with the Brexit disruption.
There are separate provisions for trade with the island of Ireland.
Speaking to BBC Radio 4’s PM show, Mr Rycroft said: “The Federation of Small Businesses estimates that only around a quarter of their members are ready for this, which is a bit surprising in a way. because they obviously had a lot of notice that this is happening.
“But let’s not forget, they’ve had a pretty scorching year, most businesses, with Covid and everything, so a lot of businesses won’t be ready.
“There will be startup problems… but the big question is how many companies end up thinking, ‘Do you know what? Is it just too complicated and ditch the import? Just as some companies have already given up on exporting because it is not worth it.
He added: “Companies exporting to the EU from the UK have already faced these rules, obviously, for almost a year. It will therefore now be British companies importing from the EU (who) will have to deal with this new Brexit bureaucracy.
“This is what it means to take back control of our borders. It will hit some sectors harder than others. The rules are more complicated for products of animal origin, especially food products that contain animal parts, because of all the requirements that come with it. “
Rules on country of origin documents have also become slightly stricter, with declarations to be made when goods arrive here.
Mr Rycroft said it would be “really complicated” for some products that “have a lot of different pieces or ingredients in”.
When asked if the country is likely to see prices rise or empty shelves, he replied, “I wouldn’t overdramatize it. I think that there are new costs on the sidelines, which will ultimately have to be borne by consumers.
‘So HMRC estimates the total cost of these new systems will be around £ 13bn per year – that’s a lot of money spread over a large population like the UK, of course it’s increases low costs through the supply chain.
“But at the margin too, there will be companies, as I said before, (who) will think, ‘Do you know what? It’s not worth it.’ There will therefore be a reduction in choice at the margin as well.
“This is why the Office (for) Budget Responsibility estimates that the net impact of this agreement on our wealth as a country will be to reduce it by around 4% in the medium term.
“This is because trade between the UK and the EU will be much less free than it was when we were in the single market.”
DExEU closed in January 2020, with Brexit negotiations now being handled by the Foreign Office.
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