HMRC’s head warns ‘no-deal’ Brexit could cost UK businesses £20bn

The head of HM Revenue & Customs (HMRC) has warned that a no-deal Brexit could cost UK and EU businesses up to £20 billion.
Jon Thompson, the Chief Executive of HMRC, recently told MPs that leaving the EU without a deal would be similar in costs to the £17 billion – £20 billion price tag of the max-fac border arrangements preferred by some Brexit supporters, which would require customs declarations for all imports and exports.
The increased burden and cost on British businesses would, he told the Treasury select committee, be the result of a fourfold increase in customs declarations.
The committee was informed that an estimated £6.5 billion would be borne by EU businesses, but he added that this could be passed on to UK businesses because it was a cost directly linked to Brexit.
The Government has already been warned by senior management at the Eurotunnel and Calais Ports that delays to supply chains and additional costs would likely be passed on to UK consumers in the long run.
John Keefe, the Director of Public Affairs for Getlink, the owner of Eurotunnel, told MPs on the committee: “Warehousing has disappeared in manufacturing chains,” not just because of just-in-time delivery of spare parts but also because of ‘just-in-sequence’ requirements on production lines.
“For example, in the car manufacturing industry, the red car is followed by the blue car is followed by the green car – and when the truck arrives the wing mirrors come off in that order – red, blue and green – and they go on to the cars in that order, and if that truck is delayed then the production line is thrown into disruption.”
Reflecting on the costs, John Neill, the Chief Executive of Unipart has said the process risked “destroying the British car industry”.
“One of the biggest reasons the automotive industry failed in the 1970s is that supply chains were seriously disrupted and completely unpredictable, so costs soared and quality deteriorated,” Neill said.
The automotive industry is just one of a large number of industries that could potentially be affected by the cost of new border restrictions and there is a general fear that the failure in various manufacturing sectors could have a knock-on effect on other domestic industries that supply goods and services to the sector. 
If you are concerned about the effect that Brexit is having on international trade speak to Grunberg & Co’s Brexit Professionals, for up to the minute advice on the latest issues.

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