HMRC is to automatically enrol over 145,000 VAT-registered UK companies into the economic operator registration and identification (EORI) customs system to reduce the risk of Brexit disruption to trade
Less than half of companies required to sign up to the economic operator registration and identification (EORI) number have done so, leading to growing concerns about disruption to trade in the event of a no-deal departure from the EU.
Companies who have not applied for an economic operator registration and identification (EORI) number will now be sent one within the next two weeks.
Any company without an EORI number will not be allowed to trade with EU member states after Brexit. Many companies which have only ever traded exclusively within the EU up until now will not have a number.
Earlier this year HMRC sent a number of letters to the 145,000 VAT registered businesses that trade with the EU to advise them how to prepare for a no deal scenario, and has published more than 100 pages of guidance for businesses on processes and procedures at the border in a no deal scenario.
So far, 72,000 companies had registered for an EORI number. The government said its auto-enrolment scheme would mean 88,000 more firms would be registered.
Mike Cherry, chair of the Federation of Small Businesses (FSB), said: ‘ Automatically issuing EORI numbers to all VAT-registered small firms that trade exclusively with the EU is a vital intervention in preparing small traders for a no deal Brexit and will be one less thing for them to worry about. It will also allow small business importers to the EU to take advantage of easements such as transitional simplified procedures.
‘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.’
Nigel Roberts, head of VAT and duty at Johnston Carmichael, said: ‘An EORI number is fundamental to international trade. In the event of a no deal Brexit it will be impossible to move goods into or out of the UK without a GB EORI number.
‘Any UK business currently trading outside the EU should already have one and HMRC’s auto-enrolment should pick up those trading in the EU only - but it may not catch everyone.
‘If you don’t have one, there’s no need to wait for HMRC to enrol you - you can do it yourself via this link - it’s a straightforward process.’
It is also important to note that if you want to trade with other EU countries after a no deal Brexit, the company will also need an EORI number issued in an EU country - this needs to be obtained direct from an EU member state.
The Institute of Export and International Trade sounded a warning about other considerations for business who want to trade with the EU and need to plan for a potential no deal outcome. The membership body pointed out that getting an EORI number is only a first step, with other requirements including Common Transit Convention barcodes, customs declarations, animal origin and plant health checks, and export health certificates.
The institute said: ‘Regardless of whether businesses automatically or voluntarily enrol with an EORI number, there is a pressing need for businesses to learn and do training in vital export skills – including completing customs declarations, working with customs agents, weighing their goods for shipment and mitigating risks of delays at the border during what could be a difficult period for the UK’s ports.’
Chancellor Sajid Javid said: ‘As the government accelerates its preparation to leave the EU on October 31, this will help ease the flow of goods at border points.’
The Ministry of Housing, Communities and Local Government has announced an extra £9m is to be made available to ensure local areas and major ports are ready for Brexit.