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A key UK government customs system was overwhelmed weeks after Brexit and threatens to cause more disruption as freight traffic rebounds.
Exporters say they have difficulty acquiring transit documents, which allow goods to enter the European Union without delay, due to a shortage of agents authorized to issue them.
Agents need to put in place a financial guarantee, often backed by a bank, to cover taxes or duties on the goods transported – but almost all of them have been incurred.
“No one has more guarantees,” said Peter Hayes, managing director of Carlton Freight, a Liverpool-based freight forwarder that shuttles products such as cars, machinery and chemicals between the UK and the UK. ‘EU. “We had to say no to hundreds of inquiries.”
Meanwhile, companies wishing to apply for a transit guarantee or to increase the size of their existing guarantee have struggled with delays at Her Majesty’s Revenue and Customs Department, the responsible government agency. A carrier, speaking on condition of anonymity, complained about its application months ago, anticipating increased demand due to Brexit, but has yet to receive a response from the tax administration .
HMRC said it is aware of the issues applicants face and is conducting an urgent review. In a statement, it attributed the delays to a recent software upgrade of its new computerized transit system. He also said he is currently processing 230 requests for transit guarantees and expects them to be processed within a week.
The EU is Britain’s main trading partner, taking 43% of its exports in 2019. Before Brexit, the overwhelming majority of goods did not require transit forms, allowing them to be shipped to the block with minimal hassle. Today, businesses face multi-day delays in crossing the border due to incorrect or missing paperwork.
In Ashford, in the south-east of England, drivers had to wait hours in a fleet of trucks to obtain their transit documents and are regularly turned away, according to Steve Cock of The Custom House, which is based on the site.
The company, which has a 200 million pounds ($ 273 million) transit guarantee, is turning down customers because it is at full capacity, Cock said. He expects chaos as soon as freight traffic rebounds from its currently moderate level, as up to 90% of goods transported will need transit documents.
“They just can’t cope,” he says.
‘Just a mess’
Ben Moore, managing director of Sealite (UK) Ltd., which exports millions of pounds of LED lights to the EU every year, has shipments blocked by customs officials for days, one of them because he was not accompanied by a transit. document known as Form T1.
“We don’t even know what it is,” Moore said. “My shipping agent says, ‘We can’t give you one.'”
He says he expects annual sales to fall 25% to £ 8million because his European customers, including French industrial giant Schneider Electric SE and Swiss engineering group ABB Ltd., will go. elsewhere.
“These customers will say, ‘Forget that is too much,’” Moore said. “It’s just a mess.”
Jon Swallow, co-founder of Jordon Freight, said his customs broker’s £ 1.5million transit guarantee ran out within three days of Brexit.
There is a workaround – which involves setting up a tax representative in the EU country where a shipment first arrives and paying entry duties – but that’s an additional expense. and bureaucratic hassle businesses will want to avoid, Swallow said.
With bureaucracy restricting trade between the UK and the EU, around 20% of UK small and medium-sized businesses have suspended exports to the EU, according to a study by accounting firm UHY Hacker Young.
“The exports just stopped,” Swallow said. “The people who suffer are the SMEs.”
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