205.The Government has issued extensive guidance seeking to help businesses navigate the complex new requirements introduced by the TCA and the end of the transition period. This includes, for example, a sprawling web of pages on GOV.UK covering a range of narrow and broad topics, as well as a 315-page Border Operating Model setting out the requirements for moving goods between the UK and the EU.
206.Witnesses welcomed the guidance, but suggested the Government could make it simpler for businesses to understand. Alex Veitch from Logistics UK was impressed with the guidance provided in various formats, but said that turning “dense, complex legal texts” into business-friendly guidance is “a tricky job and one that will take months and months to get right”. Liam Smyth from the British Chambers of Commerce told us that the Government expects “traders to interpret that guidance and, frankly, to make fiscal declarations on that basis and suffer the consequences should they get them wrong”. He added that while some guidance was initially unclear, some of the problems were being addressed.
207.In areas where business preparations were contingent on the provisions of the TCA, part of the problem, as the Institute for Government told us, is that the short time between the agreement of the TCA and its entry into force “left little time for businesses to make sense of the provisions” and “made it much harder for firms to adapt to new trading rules”. Necessarily, there was even less time for them to read and digest the Government’s guidance before the end of the transition period. For example, the guidance on rules of origin was published only on 29 December 2020, and the Border Operating Model updated only “five hours before many of the changes came into effect”. As Allie Renison from the Institute of Directors put it: “On the guidance, it was simply that there were reams of it coming quite late in the day, so now there is a plethora of it for businesses to wade through.”
208.Fergus McReynolds from Make UK said guidance could be made more impactful and useful by “making sure that there are worked examples”, and “case studies on things that have come up in questions that we have had from companies”. Even very narrow issues and processes may require guidance. As Paymaster General Penny Mordaunt told us, some of the problems for businesses are “narrow but deep”. The Cabinet Office’s Emma Churchill told us the Government has “learned some lessons” and is “now responding” to requests from business “to make sure that our guidance was actionable and that we included alongside it the kind of operational case studies that really helped not just with what people had to do, but how they had to do it”.
209.Some witnesses suggested the Government had contributed to confusion by seeking to pass off new requirements as simpler than they in fact are. Liam Smyth told us: “Some might say that the focus in the specific guidance on the TCA was in order to make the agreement sound more attractive than perhaps it was. It is only through going into the detail that one realises what the guidance did not say, rather than what it said.” Des Hiscock of ACITA and Customs Support said: “We need to stop trying to soften the message. We must realise that crossing an international border is not as easy as filling in a couple of forms. The potential sanctions for misinterpreting those rules of origin and getting things wrong are significant. We need to tell it like it is.” Many businesses, he added, “based on the original messaging from government”, erroneously think “they can buy a piece of software that will solve all their cross-border requirements or fill in a form and their problems will be solved”.
210.While general guidance is plentiful, there is clearly a shortage of specific advice and support tailored to businesses’ needs. The LEP Network called for “some direct and continued hand holding support to businesses to help them to navigate the changes and be better prepared to ensure that fully compliant paperwork is in place”. Alessandro Marongiu from the SMMT told us “businesses face issues on so many different fronts that navigating” the Government’s “comprehensive” guidance and “translating it into actions that make the whole thing work” can be “overwhelming”. He told us that “many businesses need bespoke services”. These are “often costly and are an additional strain in an already critical situation where businesses are dealing with depressed demand and a very serious change in trading terms with their biggest trading partner”.
211.Liam Smyth called for advice that was “indemnified against someone’s profession so that they can make the statement to HMRC: ‘I believe this to be the case, because I have taken that advice’. If there is an argument about it later, they have some recourse to the advice.” He urged the Government to help businesses overcome their “frustrations” with the new requirements by ensuring that they “have the advice and guidance they need and that they keep on their trading journey”.
212.As there is “so much for the food and drinks industry to do and understand, be it customs, sanitary and phytosanitary requirements or VAT”, Luke Hindlaugh said that the Government should be “bringing all of that together and providing some hands-on support for businesses”. This would involve “walking people through it so that they can identify the common mistakes they are making and address them, or find ways to redirect the logistics routes they use”.
213.The level of support currently being provided appears to vary significantly between public bodies. Witnesses praised the work of the Cabinet Office’s Border and Protocol Delivery Group (BPDG) and of specific teams within HMRC. The Institute for Government said it has “heard positive feedback” for the BPDG’s regular calls with stakeholders, “which have provided a way to ensure stakeholders are kept abreast of emerging issues (and solutions) and have allowed firms to quickly raise questions and receive answers”. Des Hiscock praised the “great” support from the BPDG and HMRC’s external stakeholder engagement teams and said “things around CHIEF could have been a lot worse” without it.
214.Anna Jerzewska of Trade and Borders also praised HMRC’s experts, but was concerned that the staff with whom most businesses will interact may not possess the same expertise. She said that “HMRC has always been incredibly supportive”, but warned that with increased demand and a “lack of sufficiently trained staff in the call centre”, initial support on HMRC helplines is “quite basic”. She said that “proper interpretation, proper guidance and proper advice” are available only when calls are escalated.
215.The experience of sustainable clothing trader Mantis World illustrates this point. Amid the company’s uncertainty over whether tariffs apply on goods traded between the UK and EU but originating from developing countries with Generalised Scheme of Preferences access to both the UK and the EU, it had received incorrect advice from HMRC. Mantis World complained that while some of the “chaos” involved in trying to move goods between the UK and the EU since 1 January “can be attributed to the ‘teething difficulties’ cited by the Government … the confusion cannot”.
216.Witnesses sought improved support from the Government on rules of origin above all else. Anna Jerzewska said that she had encountered “an incredible number of questions from companies struggling with rules of origin”. While advice was needed on “customs declarations, border processes and so on”, rules of origin “have taken over as the main area of difficulty for companies”. The Government’s guidance on rules of origin “is not necessarily fit for purpose from a business perspective, especially in a situation where we do not have capacity in the industry, enough customs advisers or enough brokers”.
217.Jo Lappin of the LEP Network reported that 60% of businesses at a recent Institute of Export and International Trade event had not understood rules of origin or how they needed to manage them: “The only way we will get a solution is by very direct, bespoke hand-holding for the businesses concerned.” Des Hiscock called for “better guidance and understanding on the requirements for proving origin”, as well as “process alignment” from EU Member States.
218.Liam Smyth said that the Government has improved its initial advice on rules of origin, but that “guidance is not the same as advice. It does not point a business to the options or to an answer for their specific product, their specific customer type or their market, and that is what they are looking for right now.”
219.The Government’s detailed guidance on changes for traders is welcome, but it needs to be easy for businesses to understand—including those with lower English-language skills—and honest about the complexity of some of the new requirements. The Government should supply more specific scenarios to help businesses make sense of the mass of information available to them.
220.We welcome indications that the Government is starting to take this message on board. But the Government should take further steps to improve the advice and support it provides to businesses. This includes providing additional training to ensure that all officials interacting with businesses give accurate and informed advice.
221.Jo Lappin praised the Government’s provision of “additional resource to businesses through EU transition advisers” but noted that “the funding and those posts run out at the end of March”, when “most businesses will still be getting to grips with what they need to do to manage the end of the transition period”. She therefore argued that “careful thought needs to be given to how we continue to hand-hold businesses through some fairly complex issues”.
222.As mentioned above (see paragraph 210), several witnesses called for financial support to enable traders to access private-sector advice. The Government responded to such calls on 11 February with the announcement of a £20 million SME Brexit Support Fund, to help SMEs “adjust to new customs, rules of origin, and VAT rules when trading with the EU”. SMEs whose only foreign trade is with the EU can apply for grants of up to £2,000 “to pay for practical support including training and professional advice to ensure they can continue trading effectively with the EU”. The announcement cited Rt Hon Michael Gove MP, Chancellor of the Duchy of Lancaster, saying that the funding would help SMEs “prepare for further changes as we implement our own import controls”.
223.The introduction of the SME Brexit Support Fund is a welcome step, but the level of funding provided may be insufficient. We urge the Government to monitor the fund’s performance closely to ensure it is helping SMEs access the support they need and, if necessary, take swift action to adjust its parameters accordingly.
224.The end of March is too soon for funding for EU transition advisors to end. New requirements are to be introduced later in 2021 and many companies are still struggling with those introduced in January. We recommend that the Government extend this funding until the end of 2021.
292 Cabinet Office, The border with the European Union (December 2020) [accessed 4 March 2021]
293 (Alex Veitch)
294 (Liam Smyth)
295 Written evidence from the Institute for Government ()
296 (Allie Renison)
297 (Fergus McReynolds)
298 (Penny Mordaunt MP)
299 (Emma Churchill)
300 (Liam Smyth)
301 (Des Hiscock)
302 Supplementary written evidence from the Local Enterprise Partnership Network ()
303 (Alessandro Marongiu)
304 (Liam Smyth)
305 (Luke Hindlaugh)
306 (Luke Hindlaugh)
307 Written evidence from the Institute for Government ()
308 (Des Hiscock)
309 (Dr Anna Jerzewska)
310 Written evidence from Mantis World ()
311 (Dr Anna Jerzewska)
312 (Jo Lappin)
313 (Des Hiscock)
314 (Liam Smyth)
315 (Jo Lappin)
316 Cabinet Office, ‘Government announces £20 million SME Brexit Support Fund’ (February 2021): [accessed 4 March 2021]