The head of the UK’s tax authority has urged government to consider combining 26 bodies responsible for UK customs checks to minimise disruption for businesses after Britain leaves the EU in March 2019.
Speaking before MPs at the influential Treasury select committee, HMRC boss John Thompson revealed plans within tax agency to propose a “Singapore-style” system, which would bring together the different bodies responsible for customs checks at UK borders.
A centralised arrangement, Thompson said, would allow business owners to get tax and border checks completed at a single point and enable “much smoother” trade.
However, Thompson warned that such an overhaul of EU customs arrangements could require an extra 5,000 staff at borders, take up to seven years to implement and cost the government “between £500m and £800m”.
Also addressing the committee, Jim Harra, HMRC director general of customer strategy, said the tax body was anticipating an additional 130,000 companies currently exporting and importing with EU states that currently do not come into contact with UK customs.
“There is a big challenge in reaching them, supporting them and getting them to be able to comply with their obligations on a transitional basis as well as on an ongoing basis,” Harra said.
The government recently published its first series of papers outlining its priorities for Britain’s future trading partnership with Europe, committing itself to ensuring customs arrangements between the UK and EU remained “as frictionless as possible”.
It pledged to create technology-based solutions to help businesses comply with new customs procedures, and detailed plans to mirror existing EU import requirements for the rest of the world.
The papers were welcomed by key industry bodies representing Britain’s business owners.
Ian Wright, director general of the Food and Drink Federation (FDF), welcomed a “drive for greater clarity” on the Brexit process.
Wright explained that the challenge would be negotiating a customs arrangement that maintained the benefits beyond the transition period, giving UK food and drink businesses the same ease of trade they currently enjoy with the EU.
Meanwhile, Helen Dickinson, chief executive of the British Retail Consortium (BRC), welcomed the start of discussions on future trade.
“Getting this right is essential to ensuring UK consumers are able to buy the products they want after Brexit,” she said.
However, Dickinson emphasised the complexity of trading arrangements, and urged ministers to target a system that prioritised minimal disruption at UK ports.
She added: “We import more food than non-food from the EU and much of that is fresh, so delays would have a significant impact on supply chains.”
Revealed: The post-Brexit trade deals small business owners most want to see
Sign up to our newsletter to get the latest from Business Advice.