Fiona Hyslop

Urgent financial assistance is needed to help small businesses hire customs agents to deal with the additional bureaucracy involved with importing from and exporting to the EU, with Ms Hyslop suggesting this could be provided in the form of tax credits, vouchers or grants.

The proposal is among several made in a letter to the Chancellor of the Duchy of Lancaster Michael Gove in response to the growing impact of Brexit and his public commitment to help businesses adjust to the new trade rules.

Ms Hyslop also urges the UK Government to engage with the European Commission to simplify VAT regulations on cross border trade, and to streamline arrangements for businesses moving goods to and from the EU.

Ms Hyslop said: “Scottish companies are facing additional costs, delays and barriers as they try to navigate the post-Brexit trading arrangements. Small businesses are particularly vulnerable and many may simply have to abandon dealing with customers and suppliers in the EU.

“The £20 million SME Brexit Support Fund announced by the UK Government last week is welcome, but not enough. Additional direct help is required, while more must be done to overcome the three key blockages to trade that I identify in my letter.”

She added: “These issues should not come as a surprise to the UK Government. They are an inevitable consequence of its decision to leave not just the EU but the Single Market and Customs Union.

“The problems have been exacerbated by its insistence on imposing this hard Brexit in the middle of a global pandemic, despite an extension to the transition period being offered and the Scottish Government presenting evidence of the damage that would be caused.

“The UK Government must act urgently before business confidence and customer relationships are irretrievably lost.”