Blog: Brexit £20m support fund is ‘not enough’ – Drapers

On 12 February the government launched a £20m fund to help small and medium sized businesses adjust to changes to trade rules prompted by the Brexit trade deal that was approved in December.

Applications to the fund will open next month. It will provide businesses with under 500 employees access to grants of up to £2,000. The funding can be used to access training relating to the customs process, the completion of customs declarations, how to manage customs processes and use customs software and systems, specific import and training on VAT and rules of origin.

Debra McCann, owner of lifestyle boutique The Mercantile London, said she would look into taking advantage of the grant but has called for more clarity on the new regulations.

“We need some clearer guidance because at the moment it feels like the blind leading the blind, there is information there but it is not very clear and nobody seems to know what they are doing. It has created massive delays so it is just a watch-and-wait scenario.

“At the moment we are buying for next season blind because we don’t know what cost implication will be applied to each brand.”

Similarly, Rink Bindra, head of omnichannel at footwear retailer Tower London, said the grant has come too late and will not go far enough to remedy the nearly two-months of delays the business has already faced: “We’re lucky that we are slightly larger [compared to other independent businesses], and we’ve looked at this for 18 months but even with all the experts we have consulted with, the deal wasn’t what we thought it was initially. It has taken a lot of paperwork to resolve the issues, that £2,000 is nothing.”

Bindra explained that although the training will be useful when managing the import of large orders, it will not prevent Tower London accruing fees associated with the import process.

“If I’m importing 200 pairs [of shoes] from a brand I’ve got a forward booking for, the training would be helpful. [However], that one day [of training] will not be enough because the process is  complex. We will need to involve accountants and a customs clearing agent so any grant is going to be wiped out very quickly.”

Peter Varnavas, owner of Precious Soles, a Hertfordshire-based footwear retailer, said the £20m funding would be better spent simplifying the courier services that operate between the EU and the UK.

“[The government] would be better off [investing in] streamlining the courier services so they can get through customs quicker, that’s where the money needs to be spent, rather than giving it to me as an independent who is going to rely on the carriers to bring in or deliver the stock anyway.”

One menswear retailer described the funding as a “gimmick” that has come too late for struggling businesses.

“If they had announced that in September, we could have taken it up, announcing it now is a bit too late because those businesses may have already gone, there are businesses that will never recover from this [pandemic].”

Instead, he has urged the government to implement larger grants to help small businesses.

The cabinet office has been contacted for comment.

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