Brexit has ruined so many things. Too many to spew here. But the (probably) Russian state sponsored disruption has had a negative impact almost everywhere, but in a big way with small businesses.
Being a small independent business, one where approximately 40% of our turnover was from our lovely European neighbours and about 60% of our products imported from them too, we’ve really been hit by it.
It started as an almost idyllic January. No tariffs, no barriers, the dream. Stuff was still being sent from here to there, nobody had figured out how to stop it. Like the good days of the internet, a free for all. The new rules hadn’t existed long enough for there to be systems to enforce them.
February rolled around, it was pretty bleak. The rules had crept in. Things that were once easy became harder, but not that much harder. Just like the difference between eating pasta al dente where once it had been slightly overcooked. Manageable, still enjoyable, but if it got any harder it would be difficult to stomach.
March was March. Covid meant delays with our partner factories, what can you do? This was the territory. To be expected. Like the ending of a James Bond movie once the bad guy had declared he wanted to use the devastating weapon he stole for evil. You’re not really worried though, we know 007 will come through.
Then April rolls round. The real devastation starts. We had a conversation with our very own M, a government advisor from the department for international trade. Not quite MI5 but pretty close, we’re sure. We mentioned an issue we had with invoicing a client of ours in the EU and some other issues with supplying customers in the EU.
M’s advice? Move to another country and/or pay a multinational accounting firm thousands of pounds in the hope they have an answer, because frankly she didn't and neither did any of her colleagues.
We didn’t really want to move, well we did. But we didn’t. So a consultation was set up with the mult-evil accountancy firm. This felt very much like our first meeting with a Bond villain. Maybe not Blofeld, or Goldfinger, but certainly somewhere between those two and Oddjob. Or Jaws. Was Jaws a villain? Or just a shark? They all meld into one eventually.
Anyway, our newly located Bond villain was debonair, charming, intelligent, articulate and spoke with an un-placeable foreign accent. He was forthright, pushy, provided us with multiple options all complicated and expensive. We left the conversation with a distinct satisfaction that we didn’t do as he had suggested ‘I think, Mr. Bond, you should have really gone with option B. - Fiscal representation in Latvia. Riga really is lovely this time of year and perhaps a trip there for you would have ended well, for the both of us’.
Bamboozled by the complicated nature of it all, we did what comes naturally in this situation; becomes overwhelmed by the various options that they don’t understand and so therefore does nothing. Like deciding what to watch on Netflix, sometimes you can be there for hours and then just end up listening to some music or watching Francis Bourgeois.
We did make about 30 calls over the next 2 weeks, each one spent trying to get a straight answer from someone. PLEASE WHAT DO WE DO HERE. During that period, there was no consistency amongst their suggestions. Different accountancy firms advised different things. One person even laughed when another company's suggestion was explained to them.
If these people don’t know what to do, how can we possibly have a chance?
We walked to the water with about 5 different companies, in different countries, but not one of them could make this stupid horse drink their poisoned water.
Anyway, as that was going on, we had bigger fish (caught probably in international waters just off Jersey) to fry. We had a big delivery arriving from Portugal, our spring/summer delivery. Already a good 2 or maybe 3 months late, but, at this point, who’s counting?
When it arrived in the UK (we’d had several deliveries arrive without any issues at this point) some rules had probably changed. Or thresholds. Or something. Who really knows? Anyway, without getting into too many details or acronyms, it took 4 weeks once it was in the UK to be released to us.
The ultimate reason? A software issue, related to a system called CHIEF or something which either had only just been developed, or one that had only just been used for orders from the EU. It’s not an exaggeration to say that every single day we called these guys up. To be passed completely around the ringer, until the fateful day our stock was released.
So May rolled round. May’s a good month isn’t it? It’s like June but a bit worse and like April but a bit better. Now in May, we had no deliveries anywhere that stick in the mind. We did however neglect to mention that in April and March we had a whole host of issues with regards to actually moving stock around Europe. Oh actually we had that in January and February too. Including paying DHL thousands of pounds for them to deliver something next day, only for it to be delivered 2 weeks later and essentially tell us ‘tough luck’.
Anyway, May. What happened in May? Oh yea, we started focussing on our website sales, which had taken a back seat during the previous few months. Want to ship to the EU? Good luck. £4.50 admin fee on each order (on top of the usual fees, plus any ‘emergency fees’ the couriers decided to add on). Want to pay the duties in advance? Well that’s another fee. Varies by courier. Want to leave it to your lovely customer on the other end to pay? Yea, they won’t be a lovely customer again.
We got automated software. We made sure all of our HS codes were correct. All of our ‘Country of origins’ were either Portugal or the UK. So no additional tariffs there. We could carry on, but it had become unprofitable to ship about 60% of orders to the EU.
Profit is a dirty word. We don’t like it. But basically what it means is that you’ve covered your cost and got a little bit extra to do something else, like pay rent or pay staff. A lack of profit suggests a loss. A loss suggests that eventually you won’t be able to carry on functioning. If a loss is a cut, then a load of tiny cuts on your body will eventually result in you bleeding out if you don’t get more blood in, or stop the cuts.
Well after losing money for the previous 6 months, (we still haven’t managed to resolve our issue with the Bond villain who wanted to sell us various tax services, tax services one of our friends had taken only for it to cost more than quoted and take 3x longer than initially planned for) July was supposed to herald a simpler way to ship orders to the EU.
What does it stands for? It's hard to remember. International orders something something? Intermediary of stupid sycophants? Idiots only suck sausages? Oh yes, that's it: Import One Stop Shop.
Except it’s only a one stop shop up to the maximum amount of 150 EUR, any more than that and well it’s no longer a one stop shop. So really it's a stop, with caveats.
And now at this point, god bless a new company that arrived on the scene, who can only be described as the antithesis of the aforementioned villain. They weren’t pushy. They were open and transparent, had clear documents so we could read about what they were selling us in advance. We finally got a Polish VAT number so we could invoice the previously mentioned customer.
Anyway, 11 and a half months on and an unfathomably large loss for a small business to take, thanks largely to Brexit (safe to sprinkle a bit of Covid related supply chain disruption in there too). We’ve pivoted and things are back on the correct path, but this year has been a difficult one to take.
Who’s the real bad guy in all of this?
Boris, his corrupt government, everyone who lied to the electorate and then everyone aggressively pursued a liars dream.