Theresa May’s Chequers plan will saddle small firms with £700million bill

THERESA May’s soft Brexit Chequers plan will saddle firms with an extra £700million a year bill, Customs chiefs admitted last night.

The Prime Minister has put the complex Facilitated Customs Arrangement (FCA) option at the centre of her plans that have sparked Tory civil war.


Theresa May has been criticised for her so-called Soft Brexit plans[/caption]

But HM Revenue and Customs said the costs involved in the FCA would be much lower than the estimated £17 billion to £20 billion annual toll to business of introducing customs controls with the EU.

Jim Harra, second permanent secretary at HMRC told the Lords EU External Affairs Sub-Committee: “If we were to introduce customs controls between the UK and the EU, clearly there would be a very substantial new admin burden because all those UK-EU traders would have to comply with customs obligations that they don’t comply with today.

“The FCA avoids that, but at the cost of adding a small additional admin burden to UK-rest of the world importers because they will now have to, instead of just pay a tariff, decide which of two tariffs is the correct tariff to pay.

“Based on a static view of trade in 2017 we believe that the additional burden would be around £700 million a year for UK traders.”

Jim Harra, second permanent secretary at HMRC, said No Deal planning was also underway
Jim Harra, second permanent secretary at HMRC, said No Deal planning was also under way

Mr Harra said HMRC had a plan ready in case of a no-deal scenario.

He said: “We do have a plan in place to enable us to introduce customs controls between the UK and the EU from March 2019, if there was no deal, so there would be a functioning, operating customs system for the UK and EU and we could put that in place.

“It would not be optimal from day one. There would be a number of improvements that we would need to make on that from March 2019 in order to try and reduce the friction and reduce the costs.”

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HMRC chief executive Jon Thompson said extra staff were being taken on in case customs controls returned.

Mr Thompson said in that scenario, customs declarations would increase five-fold to about 250 million a year.

He said that HMRC was in the process of recruiting between 4,000 to 5,000 staff to deal with the situation.

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