The fund is intended to help smaller businesses adapt to new trade rules with the EU; however, the latest data shows that UK trade with the EU has already fallen dramatically since the UK left the EU at the end of January this year.
Smaller businesses can now apply for grants of up to £2,000 to help them adapt to new customs and tax rules when trading with the EU. The £20 million SME Brexit Support Fund enables traders to access practical support, including training for new customs, rules of origin and VAT processes.
Small and medium-sized businesses that trade solely with the EU - and are therefore new to importing and exporting processes - are being encouraged to apply for the grants. To be eligible, businesses must import or export goods between Great Britain and the EU, or move goods between Great Britain and Northern Ireland.
"We recognise that changes to customs rules have been challenging for small and micro-businesses, and this is why we are encouraging business owners to apply for support through the SME Brexit Support Fund," said Katherine Green and Sophie Dean, directors general, borders and trade at HMRC.
The government has set out a new timetable for introducing import border control processes to give UK businesses more time to adapt and to recover from the pandemic. Full import border control processes will now be introduced on 1 January 2022, six months later than originally planned.
Mike Cherry, national chairman of the Federation of Small Businesses (FSB), said: "The vast majority of UK small firms that do business overseas trade with the EU. Not only are they trying to stay afloat as lockdowns gradually ease, they now have new, unfamiliar paperwork and costs to navigate when they buy from, or sell to, Europe … We encourage all eligible small businesses to take a look and apply for this new source of help."
However, there are questions over whether this help is too little, too late. New research by the Institute of Directors (IoD) has found that almost 20% of business leaders who normally trade with the EU stopped doing so in January.
The IoD survey of over 900 directors saw just under one in five of those trading with the EU report that their organisations had stopped during this period. This cohort was narrowly split between those who stopped trading with the EU temporarily and those who say it is a permanent change.
IoD head of policy Roger Barker said: "The hit to trade with our largest and nearest market needs to be addressed to ensure it does not become a permanent dent in our global ambitions … To help industry recover and build back better, going global must look both near and far when it comes to the needs of our economy."
Written by Rachel Miller