UK firms in the dark over regulatory avalanche for EU trade, says BCC research

The BCC asked more than 700 firms about a number of fast-approaching regulations, with responses revealing the vast majority of businesses were both unaware and unprepared for the changes.

Research found that 87 per cent of exporters are either unaware or unprepared for new EU VAT requirements due in January 2025.

Plus 43 per cent of manufacturers are still unaware of the UK’s, now voluntary, alternative product safety marking system to the EU’s CE one.

The research, published in September, also found more than four in five manufacturers (84 per cent) did not know about new reporting requirements on exports of goods containing high-carbon steel, and selected other products, to the EU despite regulations starting in October.

The BCC said the lack of knowledge and preparation for the changes, means some traders with the EU could face a whole range of new delays and unexpected costs.

In some cases, exporters could also find their goods unable to be transited to EU customers.

While not all of the incoming changes to regulations will impact every firm, the wide range of new rules, and the complexity of their requirements, means many businesses will face new obstacles.

William Bain, Head of Trade Policy at the BCC, said it was a “serious worry” that more than four out of five manufacturers who export had no knowledge of the EU’s new Carbon Border Adjustment Mechanism just weeks from the start of its October roll-out.

“It is just the start of a series of changes, that will gradually ratchet up over the next three years, to deter the use of cheaper but highercarbon steel, and other goods with highly embedded climate damaging emissions, being imported into the EU,” he added.

“This first phase covers only a limited number of iron and steel products, fertilisers, hydrogen, cement, aluminium and electricity, but any UK company which then includes any of these items in their goods, for example in nuts and screws, will now have to declare them.

“This is a very complex set of rules, the EU’s published guidance runs to more than 200 pages. It is likely manufacturers that export will have to think about allocating dedicated staff resources just to deal with these reporting requirements.”

With very few trusted sources of information, Mr Bain said the BCC and Chambers will be working hard to pull together as much guidance as possible to help businesses get to grips with the onslaught of changes.

“Our research shows Government must also look again at how it communicates with firms about regulatory changes, especially given the likelihood of further divergence from EU rules in the future,” he added.

“EU and UK policy makers also need to look at ways of simplifying a system that is over-burdensome for traders on both sides of the Channel.

“This could include reducing the complexity of exporting food and exempting smaller firms from the requirement to have a fiscal representative for VAT in the EU.

“If it’s done right the further embedding of digital trade through Single Trade Windows also has the potential to make exporting and importing much simpler.

“And there are other practical steps that should be considered like rejoining the Pan-Euro Mediterranean convention to ease rules of origin issues.”

The British Chambers of Commerce is urging businesses that want to boost exports and reduce costs to quickly embrace a new era of digital trade.

The BCC made the call as the Government’s Electronic Trade Documents Act finally came into force.

William Bain, Head of Trade Policy at the BCC, said: “Campaigners, including the BCC, have worked for years to have the Electronic Trade Documents Act passed, and its introduction is a huge milestone.

“This new era is starting in the UK, but we can also act as a beacon, leading towards further digitalisation of trade across the world.

“We now need to see other governments accelerating their work to digitalise border processes.”

He added: “In our Trade Manifesto, we called on the UK Government to work with business to ensure 60 per cent of the UK’s exports are carried out digitally by the end of the decade.

“The whole Chamber Network has already risen to this challenge and has switched to using Digital Certificates of Origin from the UK.

“As more countries make the transition, we will be able to increasingly digitise our trade –making it much less bureaucratic and leading to big savings in both costs and time.”

The Electronic Trade Documents Act gives legal status to electronic Bills of Exchange and Bills of Lading and other commercial documents.

The new legislation gained Royal Assent on July 20th this year and came into force on September 20th.

It provides opportunities to digitalise international trade documents and reap efficiency benefits.

It also covers trade documents such as promissory notes, warehouse receipts, marine insurance policies and cargo insurance certificates.

The number of registered Lasting Power of Attorneys has increased dramatically in recent years to more than six million, but for the appointed attorney, acting in another person’s best interests at all times can pose challenges.

Lasting Powers of Attorney (LPAs) are legal arrangements that enable a person to grant decision making powers about their health or financial affairs to another person if they lose mental or physical capacity.

Last month, the Powers of Attorney Act received Royal Assent and will soon usher in new reforms to simplify and streamline LPAs and bring the existing paper-based process online to make the system quicker, easier to access and more secure.

Lucie Glover, a Chartered Legal Executive, specialises in supporting elderly and vulnerable clients at law firm Furley Page.

She said: “The use of LPAs has risen dramatically in recent years, in part as a response to the Covid-19 pandemic, and the Government’s forthcoming reforms will make the process easier to navigate, helping even more people to take advantage of these valuable protections.

“In practice, making best interests decisions can be easier said than done, and appointed attorneys or court appointed deputies are faced with difficult decisions, such as whether the person should be cared for at home or in a nursing home setting, whether they should receive specific medication, or whether their house should be sold to pay for their care.

“Fortunately, the Mental Capacity Act provides guidance and sets out various factors that an attorney must consider when deciding what is in another person’s best interest. It is important to follow what the Act says, and a solicitor can help attorneys to understand their obligations under the law.”

Lucie continued: “Ideally, if you are appointed as someone’s attorney, you should discuss with them in advance what they would like to happen in various situations. However, if this is not possible, there is useful guidance from previous cases in this area of law which can help the attorney to make decisions, such as what the person was like before they lost capacity, what was important to them, what did they like/dislike, and what are their religious, spiritual or ethical beliefs.

“If you are appointed under a Health and Welfare Lasting Power of Attorney, the final decision about care or financial matters lies with the attorney(s). This does not, however, prevent any person from contesting your decision if they believe it is not in the best interests of the person you are acting for. In the case of continuing disagreement, an application can be made to the Court of Protection to intervene and make a ruling.”

For more information, visit www.furleypage.co.uk.