Reported on Fri, 04 Aug 2006

New EU regulations concerning the import and export of goods could hit non-compliant manufacturers' bottom line hard, it has been claimed.

Businesses who fail to comply with the EU's customs security scheme, due to begin in January, could face millions of pounds in costs.

The scheme requires businesses to obtain a certificate stating that they are authorised to safely move goods in and out of the EU.

The application process for this scheme has been forecast to be costly for many firms, potentially prompting some to take out business loans or commercial mortgages to cover the associated charges.

"Adding up all labour and administration costs, it is estimated that the application and implementation of the certificate will cost UK businesses in excess of £20 million," said Charles Meechan, tax director at Ernst & Young.

He added that up to 130,000 businesses could be affected by the scheme, including self-employed tradesmen, who traditionally operate within a more vulnerable cost structure than other types of businesses and may be more likely to take out a self employed loan to avoid straying into the red.

Variations on the EU's scheme are already in force in the US, Canada, Australia and New Zealand, with other countries also trialling the programme.
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