Last week I undertook my first post-Covid, and therefore first post-Brexit, trip to a trade show in Ostend, Belgium. For a very small firm keen to export to the EU, it was a test of the new regime. Despite Johnson’s claim there would be no “non-tariff barriers” to trade, the ‘Farage Tax’ of new costs, delays and admin were overwhelming.
The ATA Carnet
An ATA Carnet, often called the ‘Passport for goods’, is an international customs document that permits the tax-free and duty-free temporary export and import of goods. It’s required for all temporary exports from the UK but, thanks to Brexit, that now includes the EU. As an EU member, UK companies avoided the need for ATA Carnets – a massive economic benefit of membership.
In my case I was taking one of our fibre optic monitoring systems to demonstrate at a one day Offshore Innovation trade show (we’d been a finalist in a competition last year and this was the delayed in-person trade show for the competition).
The 12 month ATA Carnet, a booklet of about twenty precious A4 pages, cost a staggering £833.52. The charge includes the carnet and insurance which is an alternative to providing a bank guarantee equivalent to 40% of the equipment value – that would require a £60,000 bank guarantee in our case. The ATA Carnet must be returned after 12 months, if incorrectly completed you sacrifice the bank guarantee or must claim on the insurance. For SMEs having to provide a bank guarantee, tied up for 12 months, is expensive if not impossible.
It’s not just the upfront costs, there is a considerable amount of time required to complete the complex application form.
Four sets of checks
Once you’ve received the ATA Carnet, four visits to customs offices are required for each trip. First before leaving the UK, then on arrival in France with the process repeated in reverse on the return journey. All steps must be completed to avoid any risk of sacrificing your bank guarantee.
In the UK you must visit an Inland Border Facility to have your ATA Carnet stamped before departure and after arrival in the UK. The nearest one to Eurotunnel is at the new Farage Garage in Sevington on the M20. Sevington is not setup for cars, they cater only for lorries. Even the check-in booths are 3m in the air as they don’t expect any cars to visit, they cannot guarantee how long it’ll take to process your ATA Carnet – that depends on how many lorries are crossing each day. Because the timescale cannot be guaranteed it’s necessary to book Flexi tickets on the Eurotunnel doubling the normal travel cost. Again, the Brexit deal increases our costs.
On arrival in France it starts to get surreal. Because I was in my car there are no customs facilities accessible on the Eurotunnel site in France, you normally exit straight onto the A16 motorway – the customs office is on the “freight” side of the terminal accessible only by lorry. You must go on a bit of a goose chase and access the French customs building via their staff car park – use the speaker phone on the left at the gate and explain, in your best French, why you need access or as I did after a long wait, tailgate a member of staff coming to work.
In total, on a very quiet day, I wasted four hours waiting in queues at the UK and French customs offices on the journey into France.
A trip that would, pre-Brexit, have been easily achievable in one day now requires three days to account for the unquantifiable queues at each of the four customs offices.
Ironically, the equipment wasn’t even inspected by any of the customs officers, they were only interested in processing my paperwork.
This could stop at a stroke
The problems would disappear if we were to re-join the EU single market and customs union, remember, we were originally promised we’d never leave the single market, because it would be too costly for businesses.
This ‘Farage Tax’ particularly affects SMEs who provide a service to EU customers, from the UK. Larger companies can afford to set up a company in the EU to provide services to their EU customers. For self-managed UK SME’s it’s not easy to establish a new company in a foreign country, with different business culture and different company taxes and rules. Just try opening a foreign bank account to experience the difficulties for non-EU nationals now we are outside the EU.
The UK’s economy depends on its innovative SMEs to grow yet, thanks to Brexit, these very companies face a crippling ‘Farage Tax’ of new admin, costs and delays. Re-joining the EU single market and customs union is essential for these businesses to survive and thrive once again.