The UK’s fashion SMEs are being put off exporting to Europe due to an increase of refusals, returns of exports and mounting costs, national and trade media reports claim.
Some fashion companies told Loadstar they are now considering selling to the US instead. “It’s easier to sell to the US, because they have a threshold of $850 before duties and sale tax are required and their customers know they will be charged this,” one fashion label owner said.
Returns of items, an established feature of online fashion purchasing, are more complex to handle for UK businesses selling to EU-based customers, who find they now have duty to pay.
The SME boss said that HMRC advice webinars in the run-up to post-transition from 1 January had been better tailored to larger businesses and had left them unprepared.
Advice doesn’t fit
“We’re an SME and we were being directed to watch a webinar discussing weapons exports to the EU, [aimed at companies with] much bigger operations than ours,” they said.
More than 400 figures from the £35bn UK fashion industry signed an open letter to the prime minister in February warning that post-transition red tape and travel restrictions threaten their survival, reported the BBC.
Signatories including Twiggy and Katharine Hamnett say some firms are already relocating to the EU. The UK fashion sector employs one million people, the petitioners claimed.
Tamara Cincik, chief executive of Fashion Roundtable, which organised the open letter told the Guardian that pre-pandemic the UK fashion industry was growing 11% year-on-year. “But there is a real risk of it being utterly decimated from the gaps in the Brexit trade deal and UK government policy,” she added.
Samantha Cameron has said that her fashion brand is also finding post-transition trading with the EU “challenging and difficult”.
Speaking to BBC Radio 4's Woman's Hour, the wife of former PM David Cameron who initiated the referendum on EU membership, said she said there were “teething issues” in trading with the bloc and appealed to government to talk to small firms.