Two-thirds of UK exporters, responsible for around 25% of trade with the European Union, have still not taken the most basic steps to prepare for a no-deal Brexit, new figures seen by Sky News reveal.
According to the latest records from HM Revenue & Customs (HMRC), 70,000 out of a possible 240,000 companies have registered for crucial documentation required to continue trading with the EU.
HMRC stresses that the firms which have registered account for 75% of UK-EU trade by volume, but Sky News is aware of large companies, including a major high street food company, that only began preparing recently.
To trade with the EU after no-deal, UK companies need to register for an economic operator registration and identification (EORI) number.
The number, based on their VAT number, is required to allow them to make customs declarations and comply with other regulations. HMRC has estimated that up to 240,000 companies may need an EORI number in the event of no-deal.
The number of EORI-registered companies has risen by just 1,000 in two months, despite rising expectations of a no-deal Brexit.
Steve Cock, director of customs consultancy at KGH Customs Services, told Sky News time was running short for companies to prepare.
“I think companies are aware of what they have to do but I think there’s still a limit on the number of companies that are actually doing anything about it unfortunately,” he said.
“Bigger companies we work with, a lot of big companies, they are well prepared. But equally you’d be surprised by some of the companies that approach you late in the day and say ‘well now we need to do something’ and it surprises us sometimes who they are really.
“There is still time for companies to get their house in order but they can’t leave it more than another month or so.”
Currently EORI numbers are only required by companies that trade with countries outside the EU, because imports and exports between member states is tariff-free.
In the event of no-deal, UK 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.
Currently there are around 50 million declarations each year, expected to rise to 200 million if all European trade is included.
The government has promised a major public information campaign, urging people and businesses to prepare for no-deal, understood to be called “Are you ready?”.
Next week, it is expected to launch a programme to boost training and recruitment of customs agents, who will be required to handle a huge increase in work.
The Irish government has said it will offer companies €6,000 for every member of staff it trains to file customs returns as part of its preparations for no deal.
It believes the country will not have enough agents to help firms file returns if Britain leaves without a deal.
With the UK government predicting no-deal could lead to six months of disruption at Dover, HMRC has also agreed companies can use transitional arrangements.
Those who apply for transitional simplified procedures (TSPs) will be given six months grace to make customs declarations and declare the VAT owed on shipments. The delay will also give HMRC time to develop systems required to handle the huge increase in shipments.
HMRC says 17,000 companies have successfully applied for TSPs.
The Federation of Small Businesses called on HMRC to take the pressure off firms by automatically issuing EORI numbers.
“The UK government has been very clear: in order to make import and export declarations with UK customs authorities post-Brexit you need an EORI number.
“The solution is obvious – EORI numbers should be automatically issued to VAT-registered firms that trade exclusively in Europe, as they have been in other European countries,” said head of policy and advocacy Martin McTague.
“Urgent action should be taken to reach out to non-VAT registered firms that trade exclusively within the EU. Unless the government takes the initiative, we could be heading for chaos at our ports in the autumn.”
A spokesperson for HRMC said: “We are doing everything we can to help businesses get ready for the UK leaving the EU on 31 October.
“Businesses who import or export goods need to take action, the first step of which is obtaining an EORI number [if they don’t already have one].
“It’s simple and free and can be done online at www.gov.uk/hmrc/get-eori.”