The UK failure to obtain an essential EU exemption will create a new paperwork challenge for British manufacturers which will start in January and bring back the difficulties of Brexit times. The European Union will impose new green tax rules which will impact £7bn worth of British exports to the EU market because the UK did not receive any special exemption.
The UK failure to meet this requirement forces exporters to create extensive documentation which must follow the EU carbon border adjustment mechanism rules. The new regulations will force businesses to disclose their complete carbon emission data which includes all products made from steel and aluminium and cement and fertiliser and energy-related goods.
The industry experts predict that the new tax requirements will create significant financial challenges for all businesses but small and medium-sized enterprises will face the most substantial impact. The administrative work will be heavy because it will create additional expenses and operational difficulties during a period when businesses operate with limited profit margins. The UK firm would lose or win contracts in international markets because of small carbon tax rates which they must pay.
The current tax situation requires businesses to take immediate action because the actual tax payments will not become due until 2027 although negotiations might produce modifications to the current system. The current situation creates additional challenges for British manufacturing because political agreement delays create immediate operational and financial problems for industrial operations.
