UK retailers are being encouraged to check exporting rules under the new free trade deal with the EU, following a big increase in online shopping over the last year.
Demand for online shopping has grown since the start of the coronavirus pandemic, with 36% of UK retail sales made online in January this year. This is up from 20% in the same month last year, according to figures released by the ONS (Office for National Statistics).
The stats also showed textiles, clothing and footwear stores saw 56% of their sales happen online in January, again an increase from 20% a year ago.
With more UK retailers engaging in online sales over the last year, it is possible that some are choosing to or will be selling to a wider customer base through exporting.
Andrew Goodacre, CEO of the British Independent Retailers Association said: “It is absolutely vital for independent retailers to understand the implications of the Free Trade Agreement.
“We urge these businesses to visit the relevant government ‘transition’ websites, read the documents, watch the videos etc. Whether importing or exporting, trade with Europe is important, and it is crucial for the retailer to understand how to do it properly and minimise disruption.”
Data released by the Department for International Trade in July 2019, revealed two thirds (66%) of current or past exporters said they were essentially passive in their exporting behaviours – they responded to orders from abroad when they were received, but did not specifically target customers in other countries.
This compares to around a quarter of exporters (28%) reporting that they intentionally targeted customers in specific countries and would therefore be classified as ‘active’ exporters. The remainder reported that they were unsure about their exporting approach (which may well be a proxy for passive behaviours).
Jacob Thundil, founder and director of Cocofina, which produces organic coconut-based products, saw his business turn from a bricks and mortar retail and wholesale business, to a buzzing ecommerce business almost overnight, after shops were forced to close during the first pandemic lockdown.
Cocofina sells to 28 countries making exporting and importing critical to the business.
Jacob understands many businesses are still coming to terms with the new rules and acknowledges that each company will be different.
He explains how he has handled changes under the UK’s new free trade deal with the EU: “Using online research I wrote a long ‘to do’ list and we used GOV.UK to understand the process for imports and exports to the EU. Many of our products are manufactured in the UK and are therefore classified as having preferential origin. Under the terms of the deal this means they will not be taxed.
“We also got the right information about labelling changes for exporting organic food, and to understand the impact this process will have on our trademarks and patents.”
Advice on GOV.UK says steps businesses should take, include:
- Using GOV.UK to find out more about how you can continue to trade with the EU
To continue trading with the EU, you need to follow new rules for importing and exporting, including changes to customs processes and licensing. Visit GOV.UK/transition to find out what you need to do.
- Identifying how your business can be ready to sell certain goods in GB and EU
Use GOV.UK to check rules on manufactured goods, such as marking requirements and approvals needed, to ensure your business can sell them on the GB and EU markets.
- Checking your goods comply with rules of origin and that you have the required evidence to trade tariff-free with the EU
Businesses need to take action to access zero tariffs in the Trade and Cooperation Agreement. They must check that their goods comply with rules of origin requirements, make a declaration, and ensure they have the correct evidence if they wish to claim preferential tariff rates when trading with the EU. Please consult further guidance here.
To help smaller businesses new to exporting and importing, the government has created the £20m SME Brexit Support Fund. The scheme allows businesses up to £2,000 in grants to help them adapt to new customs and tax rules, when trading with the EU through training and professional advice.
Businesses are also encouraged to get support at GOV.UK/transition, where they can get answers to their questions using the checker tool, generate information tailored to their business, and to sign up for email updates.
They can also check the new on-demand videos to help their businesses adapt to the new rules. Searchable by sector, businesses can find out more about 18 topics that may affect them.
For any further queries please contact the business support helpline, 0800 998 1098. Monday to Friday, 9am to 6pm. Find Business Support Scotland: 0300 303 0660 Business Wales Helpline: 0300 060 3000 Invest Northern Ireland helpline: 0800 181 4422
