Exporters advised by Department for International Trade officials to form EU-based companies to circumvent border issues.
Brexit nightmare: British businesses at breaking point
Requirements for EU transport firms to provide VAT and tariff guarantees have left hauliers refusing contracts to carry loads for small- and medium-sized UK businesses. Photograph: Dan Kitwood/Getty Images
British businesses that export to the continent are being encouraged by government trade advisers to set up separate companies inside the EU in order to get around extra charges, paperwork and taxes resulting from Brexit, the Observer can reveal.
In an extraordinary twist to the Brexit saga, UK small businesses are being told by advisers working for the Department for International Trade (DIT) that the best way to circumvent border issues and VAT problems that have been piling up since 1 January is to register new firms within the EU single market, from where they can distribute their goods far more freely.
The heads of two UK businesses that have been beset by Brexit-related problems have told the Observer that, following advice from experts at the Department for International Trade, they have already decided to register new companies in the EU in the next few weeks, and they knew of many others in similar positions. Other companies have also said they too were advised by government officials to register operations in the EU but had not yet made decisions.
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