The Government’s border plans, which see a flexible introduction of a customs border in three phases from 1 January 2021, come with critical flaws.
The plans also leave three out of four companies unprepared.
The phased border introduction gives importers more flexibility but comes with significant flaws, leaving the door open for smuggling and not allowing the Government to collect the right amount of Import VAT and Customs Duties. Secondly, there is hardly anyone in the Government who can today explain how the land border in Ireland will operate from 1 January, which is meant to honour the Northern Ireland protocol as negotiated with the EU. This is not good enough for businesses who are depended on trade with Northern Ireland.
Thirdly, UK exporters must be aware that there won’t be a flexible EU border from 1 January 2020. UK trader’s dependent on selling into the EU market need to realise now that the EU border will work very differently. Thousands of UK businesses will find themselves locked out from importing into the EU if they can’t comply with the EU customs code going forward, which requires them to have an EU presence in order to be the ‘importer of record’. This is an issue no one has talked about yet.
Out of 1,000 company directors asked by the Institute of Directors, almost 75% responded they are not prepared for the changes ahead. This is very worrying and proves that the Government left it too late to announce its border plans. The Government had the option to extend the Brexit transition period to give businesses more time to prepare, and it should have done so after losing valuable time between April and June.