A British entrepreneur couple in their seventies say they have been forced to move their business out of the UK in order to keep it running after Brexit.
David and Anna Taylor (not their real names) could no longer sell their products to the EU after Brexit, so set up a company in the Netherlands and a packing service factory in the Langhe region of Piedmont, Italy, where they moved in 2015.
The pair sell biocides – non-agricultural pesticides ranging from wood preservers to insecticides and pesticides. Since Brexit, these are now regulated by two different sets of trade and registration rules in the UK and the EU.
“After Brexit we could not sell to Europe from the UK as a biocide company, even though we had registrations in the EU,” says Mrs Taylor. “Only EU-based companies can hold registrations and sell to the EU, which was our largest market.”
Moving out of the UK has allowed them to bypass post-Brexit duties; any import of goods from the UK into the EU are charged 10 per cent, which they say would have made their products non-competitive.
“We kept our UK biocide approval and got our EU one too. However, now if we want to update our products we have to make two applications, so it costs us twice as much.”
The couple had long wished to retire to a European country. They had considered France but eventually decided on Langhe, where they have taken up residency in a rural cottage.
The couple, hailing from the North, voted Remain and think Brexit was “a disaster”.
Pre-Brexit, about 75 per cent of their turnover came from EU sales. The Taylors sell to the UK and seven EU countries – Finland, Latvia, Lithuania, Estonia, Greece, Cyprus, Malta. They also export to China, Ghana and Barbados.
The EU registrations cost £200,000 to 250,000 in total, says Mrs Taylor. She says the couple had no choice but to leave the UK if they wanted their European exports to survive Brexit and not see this money wasted.
“The only thing we could do was to register a company in an EU country and transfer all the product registrations to that country,” says Mrs Taylor.
They chose the Netherlands because it has the closest commercial system to the UK. The factory in Langhe acts as an independent contract filler of their products (for packing services). But there are still challenges.
“What we had not realised was how difficult it would be to have a small factory in Italy owned and operated by an Italian resident, which was given business from a Dutch-registered company,” says Mrs Taylor.
“We also suffer huge delays getting goods from the UK to the Netherlands, as customs and travel delays cost a huge amount of time and money.”
While Mrs Taylor still officially works from the UK, which she often visits, her husband works full time from their Langhe cottage. She was registered as her husband’s dependant, so has no right to work in Italy. Mrs Taylor wanted to be registered in her own right but the local authorities “refused”.
The Taylors complain that the bureaucracy in Italy is “overwhelming”, employing staff is hard and expensive, and VAT seems impossible to recover. They had planned to sell the business last year, but have now decided to keep it for a while longer.
“Personally, I love Italy but business-wise it is an awful place to work from,” says Mrs Taylor. “I would never recommend anyone to set up a business here unless it is small and home-based.
“My husband had to complete an eight-page form to open his small factory, which included the question of how far away he was from the local cemetery.”