Editorial

HMRC chief tells MPs tech-based max fac Brexit ‘solution’ will cost more than EU membership

HM Revenue and Customs’s Jon Thompson has done his research, and says firms would have to pay £32.50 for each customs declaration under max fac – and any such system would take up to five years to work properly, too

Posted 24 May 2018 by

HMRC’s Chief Executive says he’s investigated ‘max fac’ – and even the best technology-based post-Brexit customs arrangement based on that idea would still cost British exporters at least £20bn.

The country’s senior taxman, Jon Thompson, said his number derives from an estimated £32.50 for each individual customs declaration, and also told a meeting of the Treasury Select Committee that any planned IT post-Brexit customs tracking system, of whatever shape, will take between three and five years to fully come on-stream.

For comparison, the UK is said to have paid Brussels something like £13bn in 2016.

Max fax – ‘maximum facilitation’ – is an idea coming from one half of the Cabinet that posits an alternative to continued membership of the Customs Union and Single Market, whereby technology and advance verification could be slotted in to minimise customs checks and allow exporters to pay duties in bulk every few months rather than every time their goods crossed a border.

To check, Thompson said he’s been on the road checking with the private sector companies who’d have to do this – and he’s found that given there were about circa 200 million exports to the EU each year that could require customs declarations, and a similar number of imports, such a high bill would still have to be paid.

“You need to think about the highly streamlined customs arrangement costing businesses somewhere in the late teens of billions of pounds, somewhere between £17bn and £20bn,” he told the Committee yesterday.