'It's a mess': Small businesses hit out at EU red tape set to cost thousands, and say 'government has been no help'

23 November 2024, 14:02 | Updated: 23 November 2024, 19:46

British small business owners face overwhelming costs to comply with new EU export rules that come into force in just a few weeks - and say they’ve been given little help by the government.

From December 13, any business that exports to the European Union, excluding some products like food or medicine - or sells goods to Northern Ireland - will have to comply with tough new safety regulations.

That includes having a ‘responsible person’ - a compliance operator responsible for their EU sales - safety testing (to get products CE marked), translation of safety guidelines into any EU languages where products are sold, as well as other new requirements - and potentially hiring lawyers if products do come into conflict with European regulation.

The combined cost of this is likely to be too expensive for some small businesses to bear and may depress exports to the EU even further.

One study found that up to 20,000 British businesses have stopped exporting goods to the EU since Brexit - a drop of nearly 17%. Parliamentary research found that EU goods exports fell 11% between 2019 and 2023.

Katie Stockton, who runs a sign design business, said she had been quoted €160 (about £133) per product per month by one business offering their services as the EU responsible person.

She normally sells three different products to EU buyers - meaning she would be paying around £400 per month, or nearly £4,800 per year - just for the EU responsible person, not including the extra administrative tasks and repackaging.

She’s decided the European sales are not worth the money, and is likely to stop exporting to the EU. “There’s no way I can afford it,” she said.

The advice given to different businesses has been confusing. Ms Stockton sells from her own site and via Etsy - but says she hasn’t been given any advice from the online marketplace. People selling via Amazon have been given advice.

“We’ve had such little information,” Ms Stockton said. “We’ve had zero support from the government, we’ve had zero support from Etsy - it’s a mess.”

She pointed out that on Etsy she cannot even separate out sales to Northern Ireland and to the mainland of the UK, although she can on her own site - so is unclear if it's even possible to keep to this rule.

Small business owners have made similar comments on online forums about the changes, with some admitting they hadn’t even heard about the drastic changes until recently.

Chloe Barlow, who runs a stationery and wedding card business with her husband, sells a quarter of her products to the EU - exporting to all 27 countries.

But until recently she felt that she was going to have to stop selling to the EU because she couldn’t afford to stick to the new rules.

Even now, having taken professional advice and decided she can keep up with the new regulation, she will probably have to pay thousands of pounds per year - eating significantly into her margins.

And she said it’s frustrating that all the administrative tasks will take time away from her real passion of designing her products - which is what drives her business in the first place.

“It’s really tough - we’ve been tearing our hair out over this,” she said.

A spokesperson for the department of business and trade said:"Small businesses are the backbone of our economy, and are therefore front and centre of this government’s growth mission. We have also been clear that we want to reset our relationship with the EU to make it easier for businesses to trade with Europe.

“We are supporting SMEs to get ready for GPSR and will be publishing more guidance shortly. We will keep this under review and continue to engage businesses to ensure they are supported to trade freely."

LBC has contacted Etsy for comment.