UK taxes on EU imports have increased hugely since the former’s official exit from the Union at the end of 2020.
Both British businesses and individuals spent approximately €2.6 billion (£2.2 billion) between January and July on import duties – a 42% increase on the first seven months of 2020 – accountancy group UHY Hacker Young calculated using public statistics.
Importing products from the EU has become considerably more complicated and time-consuming. “British businesses don’t have the time or support to prepare themselves for the costs of Brexit and the administration,” UHY expert Michelle Dale confirms.
In addition, regulations on product origins are particularly complex, requiring an additional charge for goods that have been made outside the EU including those which might have certain components made outside the EU. These goods are not included in the free exchange agreement – a somewhat ironic name – between the EU and Great Britain.
To further add to the burden of British businesses, from 1 October new rules on imports of animal products from the EU will come into force. These will be just another measure that impacts business in the UK, which has already seen massive declines in profit margins in the aftermath of the split with the EU.
Despite Prime Minister Boris Johnson’s assurance that Brexit would make trading with foreign partners easier and remove “red tape” imposed by the EU, the opposite has so far proved the case with UK exports to the EU falling by 13.5% in the months leading up to Brexit – a shortfall of €46 billion (£40 billion).
Alarmingly, Jim Harra – chief executive of HM Revenue & Customs (the UK’s tax agency) – told MPs that present Brexit deal “is not materially different from a no-deal situation”. The additional customs paperwork alone is predicted to cost British businesses £7.5 billion per year to complete.