Indie publishers fearful of no deal as HMRC issues Brexit advice

Indie publishers say they are fearful of a no deal Brexit, with one warning it could relocate to Canada, as HMRC sent out letters this week giving advice on what to do if Britain crashes out of the EU.

The letter, entitled “Leaving the EU: actions for your business to take now to be ready for no deal”, includes tips on making customs declarations and changes to paying import VAT. HMRC said it had sent out the letters this month to 145,000 businesses in the UK that are VAT registered and importing or exporting with the EU. Despite that, most of the presses contacted by The Bookseller had not received the document.

One of those who did get the letter, Alessandro Gallenzi, who runs Alma Books in Richmond, London, said it was “depressing” reading. He told The Bookseller: “We have been kept totally in the dark about Brexit and its implications for businesses. These letters, which tell us that there are challenging changes ahead, received on 13th February and giving absolutely no details about what is happening, what will happen or what we should do, are not very reassuring for businesses and their directors. 

“In previous months, I repeatedly asked our partners, our peers, our distributors, our suppliers, what contingency plans they were putting in place ahead of 29th March 2019, and no one knew anything or had done anything in preparation for Brexit. So I can only suppose that they had already received these HMRC letters – and that we were only the last in the queue.”

He added: “I suppose I would be more worried if we were trading in bananas or motor spare parts. However, the situation, whichever way you look at it, although it may seem farcical, is not to be laughed at.”

An HMRC spokesman said the letter was one of a trio sent out since September to help businesses prepare for no deal. He urged businesses to apply for an Economic Operator Registration and Identification (EORI) number to continue trading with the EU. The number allows businesses to trade goods in or out of the UK, submit declarations and apply for transitional simplified customs procedures. 

The spokesman said the introduction of those procedures, carrying over the same processes used to trade with the rest of the world in the event of no deal, “should put minds at rest”. The processes aim to reduce the amount of information required for import declaration by deferring giving a full declaration and paying duties.

He said: “The message is businesses do need to take action to prepare for a no deal scenario while the government is working to secure a deal.”

Sam Jordison, co-founder of Galley Beggar Press in Norwich, did not get the letter but said the prospect of a no deal was so alarming he was seriously considering relocating his business.

He told The Bookseller: “I agree that it does feel very late in the day to be delivering such advice. But then again, the reality is that there's no way we could prepare for no deal, anyway. Even if we had two years we could never get ready. The lateness of this suggestion that we should start learning how to produce customs declarations is only really relevant as an indicator of the general incompetence with which all these arrangements have been made. It's just incompetence on top of calamity on top of malicious idiocy.”

Jordison added: “The hard truth is that no deal would make so many aspects of our business impossible that trying to get on top of the relevant customs declaration material, VAT regulations or anything else feels like trying to mend holes in a parachute when we're already falling.

“Having said all that, we have started to make other contingencies in case we are thrown into a no deal situation. I've been buying lots of cans of pilchards. We've also just arranged an exploratory trip to Canada over the summer with a view to working out how we might be able to transfer our business over there, should we be lucky enough to keep it operational until then.”

The warnings come after indie publishers and printers said shipping and customs delays from a no deal Brexit could bring the book trade “to a halt”. Many in the industry fear the UK’s trading relationship with the EU will be seriously undermined and supply chains thrown into chaos. Publishers Association c.e.o. Stephen Lotinga told The Bookseller last month: “Publishing companies have been actively planning for various Brexit scenarios and we have been supporting them in this – including with their preparations for a potential no-deal scenario.

“The UK’s publishing industry relies heavily on export markets, including Europe which saw a rise of 13% in physical book exports in 2017. Any customs delays to shipping physical products to Europe would be detrimental, as would any disruption to publishing supply chains. We are also concerned about the possible broader economic effects negatively impacting consumer spending and continuing to access global talent.”

As things stand, the UK still intends to exit the EU on 29th March but Prime Minister Theresa May has been unable to convince MPs to back her deal with Brussels.