Thousands of British companies are being sent letters containing an identification number which will enable them to continue trading in the EU after 31 October.
New Chancellor Sajid Javid has warned that there is ‘no time to delay’ as the Government ramps up its preparations for a no-deal Brexit.
Over 88,000 VAT registered companies will be allocated an Economic Operator Registration and Identification number in the next two weeks.
Regardless of whether they are VAT registered or not, if businesses do not have an EORI number post-Brexit, they will not be able to continue to trade with suppliers and customers in EU member states.
Action men: New Chancellor Sajid Javid has warned that there is ‘no time to delay’ as the Government and new PM Boris Johnson ramps up its preparations for a no-deal Brexit
Currently EORI numbers are only required by companies that trade with countries outside the EU, because imports and exports between member states are tariff-free.
At present, only around 72,000 companies in Britain have got themselves an EORI number, with today marking the first time the Government has stepped in and taken an auto-enrolment stance ahead of Brexit.
Javid said: ‘As the Government accelerates its preparation to leave the EU on October 31, it’s right businesses are prepared too.
‘There can be no time for delay which is why HMRC has allocated thousands of businesses with a trading number to ensure they can continue to trade their goods through Europe from day one.
‘This will help ease the flow of goods at border points and support businesses to trade and grow.’
Have you got one? At present, only around 72,000 companies in Britain have got themselves an EORI number
Business groups largely welcomed the Government’s move, but remain concerned that there is still much more to do to fully prepare for a no-deal Brexit.
Dr Adam Marshall, Director General, of the British Chambers of Commerce said the Government’s pro-active approach was ‘long overdue.’
He added: ‘This common sense step will prompt more traders to prepare for change, and consider what else they need to do to be ready for an unwanted ‘no deal’ scenario.’
The Confederation of British Industry said the Government’s EORI number step was a ‘sensible move’, but ‘one of hundreds of things that needed to be done’ in preparation for a no-deal Brexit.
‘Overdue’: Dr Adam Marshall, Director General, of the British Chambers of Commerce said the Government’s pro-active approach was ‘long overdue’
Nicole Sykes, CBI head of EU negotiations, said auto-enrolment would reduce the risk of lorries turning up at ports without one of the necessary pieces of paperwork.
She added: ‘But the web of short and long-term consequences of no deal go well beyond this, which are both complex and damaging.
What is an Economic Operator Registration and Identification number?
An EORI number is a unique number given to a business which enables them to be identified by Customs officials when they do business with companies based abroad.
If businesses do not have an EORI number post-Brexit, they will not be able to continue to trade with EU Member States after 31 October.
Businesses will need an EORI number that starts with GB to be able to move goods in or out of the UK if there is no-Brexit deal.
Any business concerned about where they stand with regards to getting an EORI number should contact HM Revenue & Customs.
‘That’s why the government must put just as much time and effort into securing a deal.’
Meanwhile, Mike Cherry, chairman of the Federation of Small Businesses, said: ‘If the nightmare of a chaotic no deal Brexit on 31 October becomes a reality, our small traders will the first ones off the cliff. Overnight, small business exporters will have to contend with growth sapping tariffs and time consuming customs declarations.
‘These businesses are the ones that need to prepare the most, so it is welcome to see the Government has listened to us and is taking concrete action.’
He added: ‘Focus must now move on to what other support Government can offer to small businesses including those small businesses exclusively trading with the EU that are below the VAT register threshold.
‘Small business need an Emergency Budget before 31 October with across the board measures to boost cash flow and help small business prepare, and adapt, to any new trading circumstances from 1 November.’
After getting an EORI number, British businesses will need to decide whether to complete customs declarations themselves, or employ a customs agent to do them.
In the event of no-deal Brexit Britons seeking to trade with Europe will be subject to the same customs controls as the rest of the world, and experts predict a quadrupling in the number of customs declarations.
Blunder: Gove said the leaked Operation Yewhammer dossier was an ‘old document’
Last month, the Chancellor splashed an extra £2.1billion on no-deal preparations including £344million for customs and border arrangements.
Around £5million will be given to local authorities which either have or are near to a major air, land or sea port to ensure they will continue to operate efficiently when the UK leaves the EU on 31 October.
The Ministry of Housing, Communities and Local Government said it will allocate £9million to councils to help ensure they are staffed to deal with any issues at ports.
Kent Council will be given over £2.6million out of the available funding due to the pressures it faces around the Port of Dover.
Government documents leaked this week presented a bleak picture of the widespread impact of a no-deal Brexit.
The Operation Yellowhammer dossier revealed ministers’ ‘central scenario’ will see Britain facing food, fuel and medicine shortages, and three months of border chaos.
Michael Gove, the cabinet minister in charge of co-ordinating Whitehall preparations for Britain to leave the EU insisted the dossier was an ‘old document’ that only looked at ‘what the very, very worst situation would be.’
Boris Johnson will be meeting German Chancellor Angela Merkel in Berlin later today, where he is expected to reiterate his call for the Irish border backstop plan to be scrapped.
Johnson will travel to Germany to deliver his hardline negotiating stance in person and is expected to make clear that he is serious about the UK leaving the EU with or without a deal on 31 October.