The Government has published the first tranche of technical notices outlining the detailed implications of a no-deal exit from the European Union.
Business groups have been calling for information of this kind for months. "This is a welcome step from the Government, though not before time," said Stephen Martin, director general of the Institute of Directors (IoD).
"Now the Government has planned for the worst, it can get on with negotiating for better … The Government must continue to come clean about these plans so that firms are truly in the know when making their own preparations. A no-deal would be bad, but a no-deal with no planning would be worse."
Dr Adam Marshall, director general of the British Chambers of Commerce (BCC), said: "The technical notices being published by the UK Government are a good start, but businesses still need more detailed information to trade as smoothly as possible across borders if there is no UK-EU deal on March 30th next year. Ministers … must demonstrate what they will concretely do to limit the impact of delays, inspections and red tape."
The information contained in the technical notices is far too complex for many small firms, according to the Federation of Small Businesses (FSB).
"'Technical' is certainly the word - anyone without real expertise won't be able to make head nor tail of these documents," said Mike Cherry, FSB national chairman. "It's right to prepare for a no-deal outcome. That means following up these notices with guidance that every small business owner can understand."
The papers show that, in the event of a no-deal Brexit, UK exporters will have to start paying EU tariffs at 11pm on 29 March 2019.
"It's all very well for the Government to suggest that small businesses ensure they have the software, freight forwarders and brokers needed to make customs declarations in the event of a chaotic no-deal," said Cherry. "What ministers need to understand is that these are not big corporations, they don't have thousands of pounds to throw at consultants and new tech."
The technical notices indicate that in the event of a no-deal Brexit:
- EU tariffs and customs controls will apply to UK exports from 11pm on 29 March 2019;
- UK businesses will no longer have access to the VATMOSS scheme for digital services sold to the EU;
- However, postponed VAT accounting will be introduced for imports from EU and non-EU markets;
- The Government will continue to provide a financial commitment to EU-funded initiatives until 2020.
UK business groups are agreed that a no-deal Brexit must be avoided. "This is not the outcome that anyone should want," said the IoD's Stephen Martin. "The Government must now throw all of its efforts into ensuring a withdrawal agreement is reached and we have an all-important transition period to allow us to establish our future economic partnership with the EU."
The FSB's Mike Cherry said: "The dangers of a sudden and unplanned no-deal Brexit have today been laid bare. A pro-business Brexit is one with a transition period - a vital lifeline that won't be there in a no-deal scenario."