Recommendation 9

There is clearer evidence available of the impact of the UK’s new trading arrangements on UK businesses, which now face additional administration and costs when trading with the EU. For example, Dr Jerzewska told us that even though full import controls have not yet been introduced into the UK, the new formalities and costs that have been introduced make it more expensive and complicated to trade between the UK and EU.19 HMRC agreed that many businesses were incurring additional costs and that the introduction of customs paperwork for goods moving between the UK and EU is particularly a challenge for small businesses. HMRC told us that usually only large traders try to make declarations themselves and most traders will instead employ an intermediary to manage their paperwork, which will obviously come at a cost.20 In 2019, HMRC estimated that in total complying just with new customs rules could cost UK and EU businesses £15 billion per year.21 HMRC told us that it has not yet updated that impact assessment because full customs controls have not been implemented and investments planned over the next three years should streamline border processes and make them simpler for businesses. Nevertheless, HMRC indicated it believed that overall costs to businesses would be less than it estimated in 2019.22