INSUBCONTINENT EXCLUSIVE:
Image copyrightGetty ImagesThe post-Brexit customs system favoured by Boris Johnson and other leading Brexiteers could cost businesses up to
customs declaration under the so-called "max fac" solution.Jon Thompson said any system may take between three and five years to bed in.No
contribution to the EU in 2016.Leading Tory Brexiteer John Redwood said he did not accept what he described as the HMRC's "general figures"
but told the TheIndianSubcontinent that "if it is going to cost this much it is the wrong system"
The UK is leaving the EU in March 2019, which is currently expected to be followed by a 21 month transition phase before the longer term
post-Brexit system kicks in
Ministers are currently considering two options to replace the existing customs union with the EU, which involves minimal checks, and which
the government is committed to leaving
Brexiteers are sceptical about what is believed to be Theresa May's preferred option of a "customs partnership", under which the UK would
collect tariffs set by the EU customs union on goods coming into the country
Their proposed alternative "maximum facilitation" proposal would rely on technology and advance verification to minimise, rather than
Rules of originThe EU has expressed doubts about whether either option would work.During questioning by the Treasury Select Committee, Mr
year, reflecting the cost of customs declarations and complying with rules of origin requirements.At the moment, UK firms exporting to other
EU countries or importing goods from the continent are not routinely required to complete goods declaration forms.Those doing business
outside the EU must provide information about the type and value of goods, their destination and their tariff classification so that the
right amount of VAT, duty or excise is paid
Mr Thompson said there were about 200 million exports to the EU each year that could require customs declarations - and a similar number of
imports.Citing research by the University of Nottingham business school and by KPMG, he said the likely cost of individual declarations was
requirements demanded by the EU could add "several billion pounds"
"You need to think about the highly streamlined customs arrangement costing businesses somewhere in the late teens of billions of pounds,
"And the primary driver here is the fact that there are customs declarations."In contrast, he said the customs partnership option - which
how much firms chose to claim back in differential tariffs
It would, he said, take between three to five years to fully implement any new system after Brexit
What are the UK's customs optionsA "maximum facilitation" arrangement - This would minimise customs checks rather than getting rid of them
altogether, using new technologies and things like trusted trader schemes, which could allow companies to pay duties in bulk every few
months rather than every time their goods crossed a borderA customs partnership - This would remove the need for new customs checks at the
The UK would collect tariffs set by the EU customs union on goods coming into the UK
If those goods didn't leave the UK and UK tariffs on them were lower, companies could then claim back the difference
While a "functioning border" was possible by the end of the transition period it would not be, in his opinion, be "fully optimal"
But he said no new customs infrastructure would be needed in Northern Ireland
Mr Thompson declined to answer when it was suggested it would be easier if the UK just remained in the customs union - a solution favoured
by business but rejected by ministers.Former Conservative cabinet minister John Redwood said the starting point for any new customs system
should be existing arrangements for importing goods from outside the EU."We have a perfectly good functioning trade system with the rest of
the world at the moment," he said
"It does not cost anything like these figures."The UK, he said, already had a VAT, excise and currency border with the EU based on
pre-registration and electronic declarations which, if necessary, could be extended."None of these happen physically at the border any more
with a man or a woman in a kiosk having to work it out with the lorry waiting
"It is all done electronically away from the border with electronic manifests and computer registration If we have to do customs dues as
well it is not a greater increase in the complexity."
