May's Preferred Brexit Option Is Less Costly, U.K. Taxman Says
(Bloomberg) -- The U.K. tax authority says Prime Minister Theresa May’s favored Brexit model would be six times cheaper than the other option on the table, saving businesses billions of pounds a year.
The customs partnership that May has proposed the U.K. should adopt after it leaves the European Union would cost businesses no more than 3.4 billion pounds ($4.5 billion) a year, Jon Thompson, chief executive of HM Revenue & Customs, told lawmakers in parliament Wednesday.
In contrast, the maximum facilitation model that has been championed by Brexit supporters could cost businesses between 17 billion pounds and 20 billion pounds, he said.
That calculation is based on each customs declaration costing 32.50 pounds, multiplied by 200 million -- the number of intra-EU consignements in 2016 -- and then doubled to account for businesses on both sides of the border. Another 3 billion pounds to 7 billion pounds is added for rules of origin requirements.
Responding to the comments, May’s spokesman James Slack said work is being carried out on both options. “The prime minister has said she wishes the models to be improved, so until that work is completed it’s speculation on implementation,” he told reporters in London.
Under a customs partnership, Britain would levy tariffs at EU rates and provide refunds for goods destined for British markets if U.K. tariffs are lower. Maximum facilitation would use trusted trader programs and technology to regulate the border.
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