At a Treasury Committee hearing on 7 February, HMRC was questioned on the post-Brexit relationship that the UK will seek with the EU. HMRC’s Jim Harra told the committee chair Andrew Tyrie that HMRC is preparing for three scenarios: ‘The first is the negotiated outcome that the UK wants from the EU. The second [involves] arrangements in place during an implementation period. But the third is, if there is no deal with the EU, what our day 1 contingency model is, which would have to be based on the UK being a “third country” in relation to the EU.’ The department is preparing for any of these outcomes, Harra said.
When asked about customs arrangements, Harra explained that the Union Customs Code, which the UK is in the process of implementing, is based on World Trade Organisation rules. ‘If we do move to a day 1 model, [businesses] would want that to be modeled as closely as possible on the UCC.’ If there was a hard exit from the EU, and the UK didn’t have any negotiated transitional arrangements in place, Harra could forsee a fivefold increase in customs declarations – but HMRC was making its preparations on that basis.
At a Treasury Committee hearing on 7 February, HMRC was questioned on the post-Brexit relationship that the UK will seek with the EU. HMRC’s Jim Harra told the committee chair Andrew Tyrie that HMRC is preparing for three scenarios: ‘The first is the negotiated outcome that the UK wants from the EU. The second [involves] arrangements in place during an implementation period. But the third is, if there is no deal with the EU, what our day 1 contingency model is, which would have to be based on the UK being a “third country” in relation to the EU.’ The department is preparing for any of these outcomes, Harra said.
When asked about customs arrangements, Harra explained that the Union Customs Code, which the UK is in the process of implementing, is based on World Trade Organisation rules. ‘If we do move to a day 1 model, [businesses] would want that to be modeled as closely as possible on the UCC.’ If there was a hard exit from the EU, and the UK didn’t have any negotiated transitional arrangements in place, Harra could forsee a fivefold increase in customs declarations – but HMRC was making its preparations on that basis.
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