Customs Bill: legislating for the UK’s future customs, VAT and excise regimes
HM Treasury White Paper
As the UK leaves the EU we are seeking a new, deep, and special partnership with the European Union.
Investment and trade are crucial to that future relationship, and in pursuing options for a new customs arrangement with the EU, the Government will be guided by what delivers the greatest economic advantage to the UK and by three strategic objectives: ensuring UK-EU trade is as frictionless as possible; avoiding a ‘hard border’ between Ireland and Northern Ireland; and establishing an independent international trade policy.
A key part of this new partnership will be a new agreement on customs. The UK wants a customs arrangement with the EU that facilitates the freest and most frictionless trade in goods possible, and which, crucially, avoids a hard border and any physical border infrastructure on the island of Ireland.
This White Paper sets out the government’s approach to legislating for a future customs regime, and to creating a framework that supports intra-European trade. As well as providing for implementation of a negotiated settlement with the EU – our preferred outcome – the Bill will provide for a range of other possible outcomes. This White Paper therefore also sets out how the government would manage leaving the EU without an agreement on customs, in the event of no deal being reached.
It takes time to negotiate trade deals, and even more time to build new trading relationships; and adjusting to different customs, VAT and excise systems cannot happen overnight. So it makes sense to agree an interim implementation period, which will allow businesses both in the UK and the EU time to adjust to exit in a smooth and orderly way. Such an agreement should be reached as soon as possible in the negotiations to give businesses certainty and clarity about the future. How long the period is should be determined simply by how long it will take to prepare and implement the new processes and the new systems that will underpin our future partnership, but we are clear that ‘cliff-edge’ changes are in the interests of no-one, either here, or in the EU. That is why the UK will push hard to avoid them, and to ensure that businesses and citizens only have to adjust once to a new customs relationship.
The government will continue to engage closely with the devolved administrations, businesses and individuals, and the Crown Dependencies, ahead of the introduction of the Bill later this year, and I look forward to hearing your views.
Rt Hon Philip Hammond MP
Chancellor of the Exchequer
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