Failing to secure Brexit deal will cost £20bn, HMRC boss warns

Tuesday, June 5, 2018

Quitting the European Union without a deal would cost Britain £20 billion, the head of HM Revenue and Customs has warned.

Jon Thompson has faced criticism over claims in May the customs plan favoured by Brexiteers would hit businesses by the same amount if it is implemented.

But the customs boss defended the figure when he appeared before MPs and said a "similar" amount would be lost if the government fails to secure an agreement with Brussels.

Mr Thompson said last month the so-called "max fac" plan to use modern technology to solve the Irish border question would leave firms facing huge charges for customs declarations and for EU "rules of origin".

He told the Treasury committee there had not been "much debate" within the civil service about the £20 billion figure since he had set it out to MPs.

"The estimate we have given has been in ministerial papers," he added.

"They are speculative in the sense that the government still has a number of different policy options on the table."

Asked about the potential impact of the government failing to secure a Brexit deal, he said: "If we move to WTO (World Trade Organisation) rules that would definitely require customs declarations and so it would be similar types of costs."

Mr Thompson said HMRC had chosen to assess the potential impact by looking at the how many customs declarations there will be and the cost of that rather than as a percentage of the value of trade.

But Charlie Elphicke, who represents Dover and Deal, said there was "scepticism" over HMRC's figures, telling Mr Thompson that most estimates put Brexit customs costs at 1% of trade value rather than 5%.

"You do seem quite out of line with everyone else," he said.