Boris Johnson’s Brexit plan to slap British businesses with £11.2 billion admin costs - People's Vote

Boris Johnson’s Brexit plan to slap British businesses with £11.2 billion admin costs

Boris Johnson’s Brexit plan would hit British businesses with up to £11.2 billion in administrative costs for new customs declarations. 

Official figures from HMRC estimate that up to 255 million customs declarations will need to be made after Brexit, up from 55 million at present.

The government’s own impact assessment for Johnson’s Brexit plans estimates that each of those additional declarations will costs businesses up to £56 in extra administrative costs, adding up to a potential bill of £11.2 billion a year.

Civil servants have estimated that Boris Johnson’s plan to leave the EU and introduce extra barriers to trade would cost the country up to 6.7 percent of GDP over 15 years, a cost of around £2,000 per person each year.

 

Commenting, Stephen Doughty MP, leading supporter of the People’s Vote campaign:

“Boris Johnson’s disastrous Brexit proposals are beginning to fall apart as more and more unpleasant details emerge. Now we learn they will lead to potentially crippling administrative costs for businesses due to the mountains of new paperwork they will be burdened with.

“Brexiters promised a vote to leave the EU would mean less red-tape, but the reality is a bombshell of new bureaucracy for UK businesses. This is yet another broken Brexit promise to add to the list.

“Boris Johnson’s Brexit would be a disaster for the UK. It needs to be rejected and the people need to be given the final say. That’s why up to a million people marched through London last weekend calling for a People’s Vote.”

 

Notes to editors

  • HMRC has estimated that 255 million customs declarations will need to be made every year after Brexit, up from 55 million at present.

 

255m: customs declarations that HM Revenue & Customs (HMRC) estimates might be made after the United Kingdom (UK) leaves the European customs union, around a 200 million increase on the 55 million existing declarations each year.

The Customs Declaration Service: a progress update, National Audit Office, 28 June 2018, page 6, https://www.nao.org.uk/wp-content/uploads/2018/06/The-Customs-Declaration-Service-a-progress-update.pdf#page=8

  • The government’s official impact assessment of Boris Johnson’s Withdrawal Agreement Bill estimates that the administrative burden to traders per customs declaration ranges from £15 to £56.

 

Due to data limitations around the number and nature of consignments of goods being moved from Great Britain to Northern Ireland, it is not possible to estimate the associated administrative burden on businesses. HMRC has produced estimates of the administrative burden to traders on a per declaration basis, based upon historical UK-RoW trade. This ranges from £15 to £56 per declaration, depending on factors such as whether a business outsources the process to a customs agent, but it may not be possible to translate the same 87 estimates to Great Britain to Northern Ireland movements. Small and micro businesses (SMBs) may be more likely to use a customs agent and as such are more likely to face higher costs, though the use of agents could reduce both familiarisation costs and any other burdens associated with the process.

 

EU (Withdrawal Agreement) Bill Impact Assessment, GOV.UK, 22 October 2019, page 55,https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/841245/EU_Withdrawal_Agreement_Bill_Impact_Assessment.pdf#page=55

  • It means that additional customs declarations would cost businesses up to £11.2 billion every year under Boris Johnson’s Brexit plans.
  • This is in line with previous estimates from former HMRC chief executive Sir Jonathan Thompson.

BBC News, 24 May 2018, https://www.bbc.co.uk/news/business-44238226

 

  • Civil servants have estimated that Boris Johnson’s plan to leave the EU and introduce extra barriers to trade would cost the country up to 6.7 percent of GDP over 15 years, a cost of around £2,000 per person each year.

Full Fact, 18 October 2019, https://fullfact.org/europe/boris-johnsons-new-brexit-deal-four-key-questions-answered/