A British shoemaker faces Brexit's hidden costs

Tricker's has been making shoes in England for 192 years.

It’s survived world wars, financial crises, and stock market crashes, but Brexit - paired with the burden of the global health crisis - is its latest battle.

While the last-minute trade deal between London and Brussels may have helped avoid border tariffs, businesses on both sides are now dealing with extra costs from VAT rates.

Martin Mason is the Managing Director at Tricker's.

“This friction of getting the product into Europe has got to be smoothed down, I mean, it is a bit of a barrier to recovery post-COVID, but if wise heads get together and solve some of these issues then hopefully it will it will become easier. ”

British exporters must now comply with different VAT rates across the EU's 27 member states.

Tricker's has handed the task to parcel firms that are charging additional handling fees for each package sent to the EU from the company's factory in Northampton, England.

The extra costs could hit over $137,000 a year, and shipments that used to take one day to arrive are now taking three or four.

When the couriers get things wrong, the trail of paperwork also grows:

“I mean, let's be honest, Europe is having exactly the same problems getting products into the UK. Every European manufacturer or shop has to set up VAT registration with HMRC. Some have decided they just are not going to bother, so it really is both sides coming together and just making sure that all the paperwork and processes are easier."

Prime Minister Boris Johnson has said the recent disruptions to trade are largely "teething problems," - and he points to the potential for export growth if Britain strikes trade deals with the United States, India, and beyond.

A deal agreed with Japan - which accounts for a third of Tricker's business compared with about 15% which comes from the EU - would be a help and an agreement with the United States might lower its import tariffs.

Video Transcript

- --and 92 years. It survived world wars, financial crises, and stock market crashes. But Brexit, paired with the burden of the global health crisis, is its latest battle.

While the last-minute trade deal between London and Brussels may have helped avoid border tariffs, businesses on both sides are now dealing with extra costs from VAT rates. Martin Mason is the managing director at Tricker's.

MARTIN MASON: This friction of getting product into Europe has got to-- got to be smoothed down. I mean, it is a bit of a barrier to recovery post-COVID. But, you know, if wise heads get together and solve some of these issues, then hopefully, you know, it will become easier.

- British exporters must now comply with different VAT rates across the EU's 27 member states. Tricker's has handed the task to parcel firms that are charging additional handling fees for each package sent to the EU from the company's factory in North Hampton, England. The extra costs could hit over $137,000 a year. And shipments that used to take one day to arrive are now taking three or four. When the couriers get things wrong, the trail of paperwork also grows.

MARTIN MASON: Let's be honest, Europe is having exactly the same problems getting product into the UK. Every European manufacturer or shop has to set up a VAT Registration with HMRC. Some have decided they're just not going to bother. So it really is both sides coming together and just making sure that all of the paperwork and the processes are easier.

- Prime Minister Boris Johnson has said the recent disruptions to trade are largely teething problems. And he points to the potential for export growth, if Britain strikes trade deals with the United States, India, and beyond. A deal agreed with Japan, which accounts for a third of Tricker's business compared with about 15% which comes from the EU, would be a help. And an agreement with the United States might lower its import tariffs.