SMEs Struggle Under the Strain of New Import Fees

In the wake of the UK's departure from the European Union, small businesses have expressed concern over the introduction of new import fees set to take effect later this month. These charges, which could amount to as much as £145 per consignment, are set to have significant repercussions on SMEs' operations and profitability.

New Fees en Route

The Government recently released the details of impending import fees, which come into force on 30th April 2024 as part of the ‘Border Operating Model’. Under this model, importers of plant and animal-based products will be subject to varying charges depending on the risk level associated with the goods being brought into the country via Dover.

According to the new regulations, importers of low-risk goods will face a fee of £10 for each product line, while those importing medium to high-risk items must pay £29. This requirement means that even small consignments containing a combination of products could incur the maximum charge.

Opposition to the Channel Charges

Trade bodies representing small businesses in the UK have vehemently opposed these financial burdens, arguing that they disproportionately target SMEs importing mixed consignments. Nigel Jenney, Chief Executive of the Fresh Produce Consortium, warned that these changes could force small businesses to reduce their product range or pass on increased consumer costs, leading to more food inflation.

Marco Forgione, Director General of the Institute of Export & International Trade, echoed these concerns, emphasising that while larger businesses might easily absorb the additional costs, smaller firms will likely struggle.

The announcement of the new fees has prompted equal frustration among small business owners, many of whom have bemoaned the Government's lack of advance notice. Richard McKenna of Provender Nurseries said it could not quote customers for jobs beyond May. “We have probably lost work because we haven’t quoted because we haven’t known the cost.”

FSB chair Martin McTague said: “Although we knew these changes were coming in at some point, formally announcing an onslaught of more fees with less than a month’s notice will undoubtedly cause a great deal of stress.”

In response to the wave of criticism, the Government defended the charges, claiming that they intended to recover the costs of operating border facilities. Additionally, the Government has emphasised that a cap has been set on the charges to limit the impact on smaller businesses.

Mitigating the Import Impact

In light of these challenges, small business owners in the UK can take proactive measures to mitigate the impact of these new import fees:

Review Your Supply Chains

Evaluate your existing supply chain to identify alternative suppliers or sourcing strategies that minimise the impact of new import fees.

Diversify Your Offering

Consider diversifying your product range to include items not subject to high import fees, spreading financial risk across a broader spectrum of goods.

Optimise Your Operations

Streamline operational processes and reduce overhead costs where possible, enabling better management of financial resources.

Negotiate with Suppliers

Negotiate with suppliers to explore potential cost-sharing arrangements or discounts that could help offset the burden of new import fees.

Seek Financial Support

Explore available financial support options, such as Government grants or business loans, to alleviate immediate pressure and support your business continuity.

Stay Informed

Stay abreast of regulatory changes and policy developments, remaining adaptable to evolving circumstances in the post-Brexit import market.

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