How have craft businesses been hit by Brexit?

Since the start of the year, makers, artists, galleries and craft businesses have experienced uncertainty and upheaval due to the new rules governing Britain’s relationship with the European Union. It’s still early in the process and the full impact won’t be felt until the effects of the pandemic lift, but creative practitioners and small enterprises in the craft world – like so many sectors – are already encountering problems. They are struggling to get to grips at short notice with the new requirements for doing business with customers, collaborators and suppliers on the Continent or experiencing a sharp increase in costs and paperwork that is making large parts of their activities untenable.

Several large British companies are opting to set up operations inside the EU, but this is unrealistic for many smaller operations or individuals. Meanwhile, the British creative sector as a whole is being eroded by the loss of those who are considering returning to their countries of origin in other European countries as lives lived across a hard border get more complicated. The status of Northern Ireland, meanwhile, is unlike any other – with an internal border between the island of Ireland and mainland Great Britain subjecting makers on both sides to new demands, felt even more acutely because of the sheer volume and frequency of trade that happens between these two regions.

To scope out the extent of the challenges facing makers post-Brexit, the Crafts Council is conducting research. ‘We have been speaking to people across the sector whose businesses have been affected by these changes, and we are taking these case studies to the Department for International Trade and the Department for Culture Media and Sport, to push for answers and solutions,' says our executive director, Rosy Greenlees. The Brexit advice section of our website will be updated as we gather more information, and you can also sign up to our Maker newsletter for more guidance. Here are some of the experiences you told us about.

Travelling for work

The withdrawal of freedom of movement between Britain and the EU is one of the most emotive topics in discussion about Brexit but the impact of this change has been watered down by the curbs on movement already in place because of the pandemic. The implications for working abroad and cross-border collaboration will become clearer when we’re free to travel again. What’s apparent is that it’s no longer straightforward: just as artists and cultural workers from most EU countries will now be subject to new visa rules when coming to work in Britain, British citizens will now need to assess the rules and classifications set by each EU country when it comes to the types of work and activity they can carry out, with knock-on effects for those used to working across a borderless continent.

One area this could affect is ad hoc teaching, lectures and workshops. Textile artist Caroline Bartlett, for example, is concerned about the impact on talks and demonstrations she often does out in the Netherlands. ‘The law doesn’t specify the types of work that a visual artist can do, so the question is can your workshop be legally classified as work? It is up to individual countries to decide, and I can imagine it could be a bit of a grey area for them.’ Meanwhile, it’s unclear whether certification and paperwork might be needed for the samples an artist wishes to take with them for demonstrations.

Importing

When it comes to importing materials and other goods from the EU, many UK-based makers have been hit by a combination of increased shipping charges, duties and VAT. Since the start of the year, potter Linda Bloomfield has had difficulty sourcing one of her glaze ingredients – calcium borate frit, made using an imported raw material, colemanite, and used by many potteers. ‘My supplier CTM Potters Supplies has stopped buying it as they say it is now too expensive, and they may have to buy a very large quantity,’ she says. ‘I may have to change the glaze recipes I have been using for twenty years.’

Glass artist Colin Reid has witnessed international glass suppliers he previously dealt with in Britain shifting their European operations elsewhere – he says getting materials from EU suppliers instead will be more costly and time consuming. For several makers, this increased cost of sourcing materials will make strands of their business unviable. Commenting on an Instagram post, designer-maker Dan Lovett, who set up his business in north-east England last year, says the price of a particular part he imports from the EU has gone up by 30%. ‘This means the design is no longer viable financially, despite my efforts to produce items affordable to everybody.’

Like many other jewellers, Tanja Ufer usually travels to Munich twice a year to buy gems from international sellers at a major trade fair, and her suppliers also frequently send her gems to select from and she returns the rest. She has been told that some loose precious gems are now subject to VAT charges, and until she has more information, is uncertain about how she is going to be buying them in the future.

Meanwhile, upholsterer Delyth Fetherston-Dilke was hit by a £150 delivery charge for a vintage chair she sourced to restore from an auction house in Sweden – almost half the cost of the item itself. ‘I’m sure I should have known, but only now am I seeing articles in newspapers trickling out about these customs duties,’ she says. ‘I feel I wasn’t the only one surprised.’

In other cases, importing from the EU is no longer an option even if you are willing to foot the bill: Fetherston-Dilke’s French supplier of coir to stuff antique furniture had ceased trading with the UK, and printmaker Kiran Ravilious has been told by a wallpaper manufacturer in the Netherlands that they won’t be delivering to the UK for the foreseeable future ‘because of Brexit’. ‘I have customers wanting wallpaper and willing to wait but I’m not sure how long for,’ she says. This isn’t restricted to goods actually produced in Europe – many makers source materials from further afield that come through EU countries on their way to the UK.

As well as makers, gallerists have also felt the impact of the new border friction. Marco Venturi, whose London-based gallery MADEINBRITALY deals predominantly with Italian makers, describes it as ‘a shambles’ and sees the new taxes as a considerable threat to his business: ‘We had to ship a considerable amount of ceramic works from Italy for an exhibition in London in January, Crafting a Difference at Soshiro gallery, and planned to do so just after Christmas. But the shipper said we’d need to do it as early as 14 December for it to arrive by mid January. As a result, we had to rush makers and renounce some work that wasn’t ready. It took almost four weeks to get the shipping from Italy to London, compared to the usual one week, and cost about 33% more.’

Meanwhile, the Guardian reported towards the end of January that EU hauliers who previously transported goods for smaller businesses are increasingly reluctant, as they are being asked to provide financial guarantees to cover VAT or potential tariffs on the goods they bring to Britain, which can amount to tens of thousands of pounds. Colin Jeffries, who runs Key Cargo International in Manchester, said: ‘We’ve got people that are trying to bring textiles in from Italy but we are being told there is no haulage availability on that. Nobody’s willing to touch anything because of these guarantees.’

Exporting

The friction applies both ways: makers are also experiencing problems exporting to the EU – the increased costs, customs declarations forms, paperwork and prohibitions relating to the provenance and composition of goods and delays are both financially onerous for makers and off-putting for their customers. New rules that treat products differently depending on whether they were fully manufactured in the EU, are also resulting in additional paperwork, checks and confusion.

Microbusinesses have found the information on exporting particularly impenetrable. ‘I found it extremely difficult and confusing to find the correct information on VAT, duty and shipping costs to give the customer a final quote,’ says one jewellery maker who is fairly new to selling abroad. ‘I fear the additional costs will make UK makers too expensive for European customers in the long run.’

Sian Zeng, managing director of her eponymous wallpaper brand, says Brexit has seriously affected her cost of selling to Europe. ‘To keep our customers happy we have taken on all border costs ourselves and for our European trade partners we have given them discounts to offset the charges,’ she says. ‘Not only has Brexit cost my business, it has also taken up a lot of my time to find out how to deal with the new set of rules and regulations coming in July.’

Jewellery artist Rachel Entwistle describes the new context as ‘an absolute nightmare for our business’. ‘Ongoing trade with Europe is virtually impossible or riddled with difficulties,’ she says. ‘Parcels are taking between 7-28 days to arrive with customers to countries in the EU, and are being held for long periods of time at customs even though all forms are filled out correctly. We are constantly having to follow up orders with European customers, costing time and money, and many parcels are being returned to us without even reaching the customers.’ When her courier suspended services to the EU, she says, she bore a huge cost in chasing, following up and then either refunding customers or sending out new items. She says many customers are refusing to pay the inflated fees – one in the Netherlands was charged 40% of the cost of her parcel and another more than the value of the parcel – and those who did are unlikely to buy again from a UK business in future.

A major prohibitive factor is the introduction of VAT collection at the point of sale, which is adding significantly to the cost of items. Ceramicist Silvia Kamodyova says her e-commerce business is under threat by ‘overwhelming’ new VAT rules. ‘Two-thirds of my online direct consumer market is in the EU and it’s shrinking fast,’ she says. ‘The new rules and processes resulted in VAT and duty being collected in my customer's country on all consignments. This means that my customers need to make extra arrangements to pay the import VAT before they can take the delivery. It discourages the customer from ordering as I am being priced out of the market. This has damaged my opportunities in my nearest and biggest market, especially to my direct customers – end sales, and a significant loss of earnings.’

Furniture designer and maker Nell Beale of CoucouManou, who was selling 20-25% of her products to EU customers, says import VAT can add £400 to the price of one piece of furniture for EU customers, on top of more costly delivery, administration and materials – she, like many other makers, was not previously VAT registered, so this had been a major change. ‘This will undoubtedly lose me orders,’ she wrote on Instagram. ‘This is terrible for micro businesses. I've actually suspended EU orders until further notice and I'm considering registering my business in France as well the UK in the near future.’

Many other makers have stopped selling to the EU because they are finding the costs prohibitive or the red tape unmanageable. Online platform Folksy said sales on its site to the EU fell from 4.12% to 1.89% in the period 1 January to 15 February 2021, compared to the same period last year. Even more dramatically, the number of transactions to Ireland decreased 30.56%. While Folksy says its focus is mostly on the UK and that its advertising targeted at customers in Britain this year may also have contributed, but nonetheless describes it as ‘worrying’.

Makers on other platforms have also made changes. ‘I’ve closed my orders outside the UK on my Etsy shop,’ says designer Alison Bick. ‘I sell large lampshades and the postage, customs, VAT and duties were just too problematic. It’s very disappointing.’

Designer and maker Peter Marigold has been having problems with Formcard, a bioplastic product he produces in the UK and sells on Amazon via retailers across Europe, particularly in Germany. ‘It’s complete chaos,’ he says. ‘Mystery charges have popped up when they arrive with the retailers, and they seem to be different each time. My German retailers won't place any more orders until they know what the charges are going to be, so I have absolutely nothing going to the EU now.’

Marigold has been trying to work out the full cost implications since 31 December with no luck. ‘Some shipping brokers and freight forwarders are openly admitting they haven't got a clue, which is shocking. The phrase that’s most used is “it's a shit show”.’ As a result, he has started the process of moving production of the product out of the UK into the EU. 'It's a disaster and is going to really hurt the factory I work with here, which is a small family business that can't just move out of the UK,' he says. ‘It’s tragic because UK businesses will lose out if it’s easier and cheaper to do what they do somewhere else.’

Selling and exhibiting in the EU

Ceramicist Anna Thomson has spent hours piecing together the requirements for export, and is now turning her attention to how she might exhibit at a gallery or event in an EU country, which she believes is unclear. ‘What paperwork would need to be done to allow work to be taken into an EU country without paying the import taxes as the work is not sold?’ she asks. ‘Then, what if a piece gets sold? Do I have to take it back to the UK and then send it back again? I don't think the system is very well suited to the way artists and craftspeople operate, but I hope all will become clearer as these initial months pass.’

Glass artist Colin Reid shows work with several galleries in the EU, with whom he has built up relationships over decades. After scouring the ‘bewildering mass of generic information’ on the government website, attending a DIT webinar and emailing his MP, he has concluded that there are ‘no gains at all’ amid the major new barriers and costs that Brexit has brought about. The rules, he says, are difficult to interpret but if EU galleries now have to pay VAT on the import of sale or return work, not only at the point of sale as before, it will cause problems. ‘It would be a big disincentive to show UK artists,’ he says.

The situation is also unclear when it comes to work once it’s in the EU. Reid asks: ‘Can it be sent from one gallery to another, possibly in another country and then returned from a different one than the country shown on the original export document? What about large survey exhibitions? And will museums then be able to buy work from this type of show if the paperwork only covers temporary movement of the artwork.’

Textile artist Caroline Bartlett says that, as a maker, she ‘now feels constrained by the borders of Great Britain,’ while also pointing to problems exhibiting in the EU – the requirement for a carnet or duplicate list to transport works temporarily. ‘Experience to date is that the work can end up wrapped in customs or with VAT to pay if the work is not returned within a specific time limit, resulting in weeks spent challenging the decisions,’ she say. ‘The added complications mean I will be wary of applying for biennales or other events as it is expensive and bureaucratic to send goods.’

As the Crafts Council continues to gather case studies, read our Brexit advice for makers and craft businesses for the latest information.