Smaller businesses have until the end of next month to apply for grants to help them adapt to new customs and tax rules when trading with the EU.

The £20 million SME Brexit Support Fund offers eligible UK traders grants of up to £2,000 to access practical support, including training for new customs, rules of origin and VAT processes.

Changes to customs rules have presented small exporters with new challenges after the free movement of people, goods and services between the UK and EU ended on 1 January 2021.

The Government announced the SME Brexit Support Fund in the following month, before inviting the UK's small traders to submit applications from 15 March 2021.

Mike Cherry, chairman at the Federation of Small Businesses, said:

"Small businesses, often with few cash reserves, are for the first time facing complex new customs processes, VAT requirements and rules of origin.

"This fund will make a significant difference, so that a cash-strapped small business can afford to buy-in expertise, training and practical support."

What can you use it for?

The grants can be used for training or professional advice.

The training grant will help you complete customs declarations, manage customs processes and use customs software or systems. You can use the funding for specific import and export-related aspects, such as VAT, excise and rules of origin.

If you don't fancy undertaking this yourself you can cover some of the costs for professional advice, enabling your business to meet its customs, excise, import VAT or safety and security declaration obligations.

It is possible to apply for both grants or to submit more than one application, although the maximum amount you can claim is capped at £2,000. For example, if you have already claimed and spent £2,000 on obtaining professional advice, no further grant can be claimed.

How do you qualify?

Small and medium-sized businesses that trade solely with the EU, and are therefore new to importing and exporting processes, are encouraged to apply for the grants.

HMRC gives the examples of a designer who creates and exports bespoke handmade pieces from their kitchen table or someone who sells sweet treats outside of the UK as the types of small traders that might be eligible.

To be eligible, businesses must import or export goods between Great Britain and the EU, or move goods between Great Britain and Northern Ireland.

They also should be UK-based, have met all tax and customs obligations, have fewer than 500 employees on the books, and an annual turnover of £100m or less.

How to apply

PricewaterhouseCoopers is administering the grants on HMRC's behalf. You can register your business and apply for the funding with them.

Applications close on 30 June 2021 or sooner, in the event the £20m pot is entirely allocated to SME traders before this date.

Speak to us about post-Brexit VAT compliance.