UK businesses have paid out a record £4.5bn in customs duties over the past year, as the extra bureaucracy imposed by Brexit “begins to bite”.
The costly new duties slapped on British firms increased 64 per cent in the year leading up to January 2022, new research has found.
The huge hike follows new customs controls on exports, which came into force at the start of last year following the UK’s exit from the EU single market and customs union.
Figures compiled by accountancy firm UHY Hacker Young show that the five months leading up to 31 January 2022 were the highest individual months for customs duties ever seen in the UK.
The analysts also warned that the sums could soar further this year, after new custom controls on imports were imposed at the start of last month and “rules of origin” requirements became even stricter.
From 1 January, Boris Johnson’s government introduced a requirement that importers show a declaration in respect of the origin of goods at the point of entry.
If a firm cannot provide all the paperwork showing the origin of their product, they may be liable to pay the full rate of customs duty, and could even face penalties.
“Over the past year, customs duties have been a hugely significant additional cost for many businesses,” said Michelle Dale, senior manager at UHY Hacker Young – who said the post-Brexit increase was “really biting”.
She added: “The cost of tariffs and extra paperwork is causing serious difficulties for many businesses, who are already struggling to stay profitable in the face of mounting pandemic-induced costs.”
Business groups have warned that many firms importing and exporting goods between the UK and the EU will be questioning whether their business models are still viable.
MPs and peers on the cross-party UK Trade and Business Commission have called on the government to relaunch the financial support fund for small and medium-sized enterprises (SMEs) hit by post-Brexit red tape – a scheme that closed in June.
It comes as logistics chiefs urged the government to start building more lorry parks near Dover or face “complete gridlock” around the port, as post-Brexit checks continue to cause delays.
Desperate drivers caught in four-hour queues near Dover have been forced to “s*** in the bushes” and throw bottles of urine out of the window, The Independent has been told.
The government has asked National Highways to identify new sites for lorries. But ministers have not yet committed to building an extra park – despite a promise by chancellor Rishi Sunak in the autumn Budget to spend £32.5m on driver facilities.
