UK Firms Told To Set Up In The EU To Avoid Trade Disruptions

UK firms that export to the EU say they are being encouraged by the government to set up subsidiaries in the bloc to avoid disruption under new trade rules.

Firms have been hit by extra charges, taxes and paperwork, leading some to stop exporting to the EU altogether.

But several say they have been told that setting up hubs in Europe would minimise the disruption, even if it means moving investment out of the UK.

The Department for International Trade said it was “not government policy”.

“The Cabinet Office have issued clear guidance, available at www.gov.uk/transition, and we encourage all businesses to follow that guidance.”

The Cheshire Cheese Company said it had been advised by an official to set up in the EU after it was forced to stop its exports to the bloc due to trade rules that came in on 1 January.

The firm, which sold £180,000 of cheese to the EU last year, found that every £25-30 gift box of cheese it sends to consumers on the Continent now needs a veterinary-approved health certificate costing £180.

“I spoke to someone at the Department for Environment, Food and Rural Affairs for advice. They told me setting up a fulfilment centre in the EU where we could pack the boxes was my only solution,” co-founder Simon Spurrell told the BBC.

The firm, which had been optimistic about Brexit, is now looking at setting up a hub in France where it would “test the water”.