Recent revelations by HM Revenue & Customs (HMRC) about the possible cost of customs checks after Brexit (see It will cost you) have done little to settle business nerves about what lies ahead.
Nor will any export directors be feeling any more relaxed after leading accountancy firm RSM calculated that the additional costs arising from post-Brexit customs changes could be even higher than the £20 billion mentioned by the chief executive of HMRC to the Treasury Select Committee.
Brad Ashton, indirect tax partner at RSM, said: “Whilst HMRC has taken a rough median cost of £32.50 for a customs declaration, the actual cost is more likely closer to £40 – costs for similar customs declarations in the EU tend to be higher.”
He also highlighted that the lead time required for both solutions currently under consideration by the Cabinet would probably require an extension to the transition period, as they tend to rely on technology which is not yet in place or on co-operation with the EU that has not yet been agreed.
One of those alternatives – the so-called Max Fac option – has been totally dismissed by the manufacturers’ organisation, EEF, with the idea that it could be implemented by 2020 described as “naïve” and “wholly unrealistic”.
EEF Chief Executive Stephen Phipson has written to Business Secretary Greg Clark describing a recent visit during which he was able to see at first-hand how technology operates across the USA/Canada border.
Mr Phipson revealed that, despite a decade of substantial investment on both sides of the border by two willing partners, only 100 of the most trusted Canadian companies are able to use a “fast track” system across the border.
The vast majority of goods are, he warned, still subject to normal customs checks.
His comments were reinforced by Eurotunnel which has warned that UK businesses and consumers will face serious economic costs if the Government adopts either of the post-Brexit customs models being considered by the Cabinet.
Nothing can be done until the Government and the EU decide which system they want to use, Eurotunnel’s Director of Public Affairs John Keefe said, and it could then take several years to build the system, develop the necessary infrastructure, recruit and train new staff and educate transporters from across Europe in its use.
