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The UK’s public spending watchdog says flaws in the government’s Brexit planning mean there is likely to be “significant disruption” at the border from January onwards, particularly for companies exporting to the EU.

The independent National Audit Office (NAO) says in a damning new report it is “very unlikely” that all companies involved in UK-EU trade will be ready for the end of the Brexit transition period on January 1, 2021.

“Despite the funding being committed by government, there remains significant uncertainty about whether preparations will be complete in time, and the impact if they are not,” the NAO says. With better preparations “some of this uncertainty could have been avoided”, it adds.

For goods being imported from the EU to the UK, the government has sought to ease the administrative burden, announcing it will not apply full import controls from January 1 even if a free trade agreement is reached before that date.

That would mean most traders would not need to make full import declarations until after July 1, 2021.

However, little support is being given to firms exporting goods from the UK to the EU. The NAO says that under the government’s “reasonable worst-case scenario”, between 40% and 70% of lorries travelling to the EU will not be ready for European customs requirements.

That finding echoes evidence submitted to the audit office by the British Exporters Association (BExA) and seen by GTR.

According to BExA, the government has prioritised imports from the single market into the UK, and as a result has “lacked any focus on UK business needing to prepare for importing into the EU”.

It says exporters have encountered poor communication from Westminster, with guidance from government often lacking detail and definition, with some deemed “misleading” by tax authority HMRC and removed later. It also says details issued by different departments “led to mixed messages”.

Communication with ports and airports was initiated too late, it says, leaving many uncertain as to how to manage new customs requirements once the UK is outside the single market and customs union.

Another issue raised by BExA is the government’s ambitious timeframe for introducing new technology. It says it is a “particular concern that new IT solutions were still being introduced into the summer of 2020 with little time to test”.

Examples of technology introduced at a late stage include a goods vehicle management system for trade between Great Britain and Northern Ireland, and a smart freight app that has had just four months for adaptation, integration, testing and implementation.

BExA suggests that the lack of readiness could be due to the government “misunderstanding” the extent of changes to customs procedures that would occur even if the two parties reached a free trade agreement.

Citing government policy mentioned in a NAO report from 2019, the association says there appears to have been “an assumption that an EU/UK free trade agreement would negate the requirement for customs declaration”.

BExA says that 2019 report gave the impression government policy was to agree a deal with Brussels and so its focus was on “making a deal rather than preparing the border for the inevitable consequence of leaving the union, i.e. preparation for controls, checks and the essential requirement for customs declarations for UK imports and exports”.

BExA adds: “This lack of clear focussed direction, whether due to miscomprehension of process or political policy, has left UK and Northern Ireland businesses vulnerable and unable to plan for EU exit.”

Other lingering issues for UK exporters include an ongoing disagreement between UK and EU negotiators over rules of origin, which could mean assembled goods do not qualify for tariff exemptions if components are sourced from elsewhere in the world.

The NAO report acknowledges that Covid-19 has also delayed preparations, but says that even before lockdown there were serious concerns.

A border delivery group within the cabinet office found “eight of the nine key elements of government and border industry readiness it was monitoring were at significant risk of not being delivered by January 1, 2021”.

The highest-risk areas were deemed to be IT systems, infrastructure, data, capacity among custom agents and readiness among traders and haulage companies.