The cost to businesses of the government’s ‘highly streamlined’ customs arrangement after Brexit could be as high as £20bn, HMRC’s chief executive told the Treasury Committee on 23 May. The ‘new customs partnership’ option would have initial costs of around £700m.
In an oral evidence session on the ‘UK’s economic relationship with the European Union’ on 23 May, HMRC’s chief executive, Jon Thompson, and his deputy, Jim Harra, updated the Commons Treasury Committee on progress towards new customs arrangements after Brexit.
The government set out two approaches in its August 2017 document, ‘Future customs arrangements: a future partnership paper’:
a ‘highly streamlined’ customs arrangement, involving technology-based solutions for dealing with customs declarations at the border; and
a ‘new customs partnership’ with the EU, without the need for a customs border, but involving new mechanisms for collecting and reclaiming customs duty.
Citing studies by Nottingham Business School and KPMG, Jon Thompson told the committee that under the ‘highly streamlined’ option, the cost to businesses of processing customs declarations for an estimated 200m consignments a year, at an average cost of £32.50 per declaration, would amount to £17–20bn.
In contrast, the ‘new customs partnership’ option would cost businesses in the region of £700m to set up the reclaim mechanism. Thereafter, Thompson thought businesses would make commercial decisions about whether or not to reclaim customs duties, leaving them in a broadly neutral position.
Jon Thompson estimated the additional costs to HMRC of administering the new arrangements would be around £200m (£180m for ‘new customs partnership’ and £250m for ‘highly streamlined’ option).
The cost to businesses of the government’s ‘highly streamlined’ customs arrangement after Brexit could be as high as £20bn, HMRC’s chief executive told the Treasury Committee on 23 May. The ‘new customs partnership’ option would have initial costs of around £700m.
In an oral evidence session on the ‘UK’s economic relationship with the European Union’ on 23 May, HMRC’s chief executive, Jon Thompson, and his deputy, Jim Harra, updated the Commons Treasury Committee on progress towards new customs arrangements after Brexit.
The government set out two approaches in its August 2017 document, ‘Future customs arrangements: a future partnership paper’:
a ‘highly streamlined’ customs arrangement, involving technology-based solutions for dealing with customs declarations at the border; and
a ‘new customs partnership’ with the EU, without the need for a customs border, but involving new mechanisms for collecting and reclaiming customs duty.
Citing studies by Nottingham Business School and KPMG, Jon Thompson told the committee that under the ‘highly streamlined’ option, the cost to businesses of processing customs declarations for an estimated 200m consignments a year, at an average cost of £32.50 per declaration, would amount to £17–20bn.
In contrast, the ‘new customs partnership’ option would cost businesses in the region of £700m to set up the reclaim mechanism. Thereafter, Thompson thought businesses would make commercial decisions about whether or not to reclaim customs duties, leaving them in a broadly neutral position.
Jon Thompson estimated the additional costs to HMRC of administering the new arrangements would be around £200m (£180m for ‘new customs partnership’ and £250m for ‘highly streamlined’ option).
