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

Most businesses are in the dark about the looming avalanche of changes to EU/UK regulations, according to a new report from the British Chambers of Commerce.

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% of exporters are either unaware or unprepared for new EU VAT requirements due in January 2025.

Plus 43% 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%) 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 higher-carbon 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 overburdensome 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.”