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The government “has made progress in developing the new customs system, which was part of its existing program,” Amyas Morse, head of the National Audit Office, said in a report released on Thursday. “But it may need to be ready much earlier than originally planned if there is no agreement extending timescales on the transition to any new customs arrangements.”
The report highlighted the pressure Prime Minister Theresa May’s government is under both to strike a new trade deal with the EU and to ready the borders for life outside of the bloc. No agreement by March 2019 would leave the U.K. an outsider, its exporters facing increased bureaucracy and tariffs and the government needing to police imports from the EU.
The customs office calculates that in two years’ time there will be 255 million declarations per year based on current levels of trade with the EU, up from 55 million now. Almost 700 billion pounds ($902 billion) of goods crossed U.K. borders in 2015 and the customs system collects around 35 billion pounds in tax and duties on imports from countries outside the EU.
“Customs problems have obvious implications for the flow of goods in and out of the U.K., so government as a whole needs to decide whether the extra cost and effort of getting a working system in place for day one is an insurance premium worth paying,” Morse said. [...]