As it stands, the UK government is considering 3 options for facilitating trade with the EU post-Brexit – a Customs Union, a Customs Partnership or Maximum Facilitation. Although all have their own merit, none will appease everybody, but what’s the difference between them?
A Customs Union with the EU would be a system that sees the UK mirror the European Union and tie us into the EU with no say over any rules or laws the EU wish to implement. Obviously, this isn’t a palatable option for ardent Brexiteers.
This is Theresa May’s preference. This would see the UK collecting taxes for the EU. Traders would need to pay the highest tariff, either the UK’s or the EU’s and then be able to reclaim the difference back from HMRC. This could be complex and affect traders’ cash flow. We also believe it could be open to fraudulent activity by less scrupulous businesses.
Finally, there is Maximum Facilitation, or “Max-Fac”. This essentially relies on technology to make customs as frictionless as possible. Although this would be the preferred choice of hard line Brexiteers, it’s not seen to be workable by the rest of the EU, especially around the border between the North and South of Ireland.
So, it comes down to this: with less than a year until Brexit, and with the final deal supposed to be agreed by October, the UK still does not know which customs arrangement it wants with the EU once it leaves the bloc. The options are there but decisions need to be made and time is not on Theresa May’s side….
Langdon Systems has over 30 years experience in the creation, development and implementation of Duty Management Systems throughout Europe. If you have any questions about how your company can prepare for Brexit from a customs perspective, or if you want to discuss any other customs related issues, our experts are here to help. Please email us on firstname.lastname@example.org or call us on 01942 202202.