Source · Select Committees · Public Accounts Committee
Recommendation 9
9
There is clearer evidence available of the impact of the UK’s new trading arrangements on...
Conclusion
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
Government Response
Not Addressed
HM Government
Not Addressed
2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 The government adopts an evidence-based approach to policy making and will continue to do so. With 2021 being a non-typical year of trading because of the pandemic and customs controls introduced in stages to support business recovery, the government does not have the data at this stage to update the October 2019 Impact Assessment, which set out the anticipated administrative burden for additional customs declarations which resulted from EU Exit. The government intends, in due course, to produce an updated estimate when it is able to collect more stable trade data that has less interference with the COVID-19 pandemic and global supply chain issues, which will set out our revised assessment of business impact. 2.3 The government set out in its 2025 UK Border Strategy six key transformations - all designed to contribute to a reduction in costs and administrative burdens for all border users. The greatest impact on administrative burden will come from enhancing the government's collection, assurance and use of border data, enabling upstream compliance to move processes away from the frontier, and making border documentation digital by default. 2.4 Work to develop the UK Single Trade Window, which will create a single digital gateway for traders into UK border systems, is underway. The first functionality has been