The cost of additional red tape and paperwork at the border in the event of a no-deal Brexit could reach as much as £15bn according to a new Government paper.
Filling in customs forms for trade between the UK and European Union would be just the tip of an iceberg of a ‘significant new and ongoing administrative burden’, HMRC warned.
The estimated bill was calculated based on the cost to businesses to complete all necessary paperwork to cover the 215 million export consignments crossing the channel in 2017. Some experts warn that the figure may not be high enough as the additional costs of new VAT procedures for service companies and parcels following a no-deal Brexit weren’t included in the calculations.
One-off costs to business such as preparing customs declarations were also not included.
HMRC commented that “The final costs of completing customs declarations will vary significantly from business to business depending on how often they trade.”
For individual businesses, it estimated that each consignment would cost £28 to complete the required forms and take an employee just under two hours to complete.
Experts have warned that the new red tape and unfamiliarity with the paperwork will cause a major drag on trade affecting nearly a quarter of a million businesses.
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