Importers ‘face £700m hit’ from Brexit border proposal
IMPORTERS can expect to be £700m worse off each year because of administrative costs at the border under the Government’s latest Brexit proposals, HMRC bosses have warned.
Extra costs will apply to those bringing in goods from outside the EU as they have to choose between paying EU tariffs – for goods going on to the other 27 nations – or UK taxes for products going to British customers.
But they will dodge the estimated £17bn to £20bn cost of declaring customs and paying taxes at the border between the EU and UK, which had been a possibility under one of the previous proposals, known as maximum facilitation, or “max fac”. That is because the new plan is for the UK to match Brussels’ rules, eliminate tariffs between the two, collect EU taxes at the UK border and monitor compliance closely.
However, there are also difficulties. The UK Government has acknowledged that if it wants to change any goods rules after Brexit in a way that diverges from EU rules, there could be “consequences” for trade.
Jim Harra, HMRC’S deputy chief executive, told a Lords committee that this could mean “one or the other [country] might decide to introduce border controls and border checks between the UK and EU to manage that divergence” as a result.
“It would certainly be possible to diverge in one type of product. The question then would be whether you can administer that divergence without imposing customs declarations on every product that crosses the border,” he said.
Another hurdle is that any future trade deals struck between the UK and other countries will bring down tariffs, meaning there is a gap between British and EU border taxes.