Government Brexit funding help to SMEs has astonishingly low take-up

retailer brexit

Government funding to help UK companies cope with a possible no-deal Brexit customs system has had a “concerningly low” take-up.

In December, the Treasury and Revenue & Customs unveiled an £8m training fund companies and trade intermediaries such as freight forwarders could apply to.

BBC Newsnight has learned that just 741 companies have applied for the grants.

HMRC says it is doing “everything we can to help businesses get ready for leaving the EU”.

An estimated 240,000 UK businesses currently trade with the EU. Many of these would be expected to need training if the customs system changed.

The government funding aims to support employee training and IT improvements to complete customs declarations, in a no-deal scenario.

As the UK is in the EU single market and customs union – which help trade between EU members by eliminating checks and tariffs (taxes on imports) – these businesses currently face no customs barriers at all.

But in a no-deal scenario, the UK would immediately leave the EU with no withdrawal agreement.

And that would include leaving the single market and customs union, so the way in which companies trade with the EU would change.

‘Buried information’

“Such a low number of firms applying for grant-funding is concerning and signals the need for much greater levels of awareness among affected firms to ensure they are prepared,” said Mike Spicer, director of policy at the British Chambers of Commerce.

“Ultimately this is another example of why avoiding a messy and disorderly exit in October is so important.”

Nicole Sykes, head of EU Negotiations at the Confederation of British Industry (CBI), said the government had failed to adequately publicise the scheme.

“Many small firms would bite the government’s hand off to access funds to support no-deal preparation,” she said.

“But if information about those funds is buried in a corner of a website, then take-up is going to be low.”

In June, Newsnight revealed less than a third of relevant companies had so far applied for an economic operator and registration identification (EORI) number from HMRC.

This is the most basic official authorisation that companies would need to continue trading with the EU in the event of a no-deal Brexit.

Boris Johnson’s new government is reported to be planning a £100m public information campaign to prepare the country for a no-deal outcome.

During the Conservative leadership campaign, Mr Johnson said a no-deal Brexit would be “vanishingly inexpensive, if we prepare”.

When the grant scheme was unveiled, the then Financial Secretary to the Treasury, Mel Stride, said: “I’m really pleased we are investing £8m to support the sector and help them expand their capacity as we prepare to leave the EU.”

An HMRC official told Newsnight: “HMRC has been preparing energetically for Brexit every day since the referendum.

“We will continue to remind and support businesses to prepare to leave the EU on 31 October 2019.”