Checks on EU goods coming into the UK will be phased in next year to give firms “time to adjust”, as ministers formally ruled out extending the Brexit transition period beyond 31 December.
The UK had committed to introduce full import controls on EU goods in January.
But coronavirus has forced a rethink, with firms able to defer customs forms and tariff payments for six months and some physical checks delayed to July.
Business welcomed what ministers said was a “pragmatic and flexible” step.
But, in response, the EU said it would implement full checks on UK exports at the start of 2021.
The BBC’s Europe editor Katya Adler said the EU would not see the UK’s move as a “concession but rather a pragmatic move by a country that’s not ready to implement full checks by then”.
The UK left the European Union at the end of January, but the transition period – during which existing trading rules and membership of the single market and customs union apply – lasts until the end of the year.
Opposition MPs have been pushing for it to be extended, with the Scottish and Welsh first ministers warning that exiting the current trading arrangements in just over six months time would be “extraordinarily reckless” given the economic damage and uncertainty caused by the coronavirus epidemic.
Ministers from the two devolved administrations withdrew from a scheduled conference call with UK ministers on Friday evening in protest at their decision to rule out a delay, saying their views had been “dismissed”.
Earlier, Cabinet Office minister Michael Gove said he had “formally confirmed” to the EU that the transition period will not be extended, adding that the “moment” for such a move had “now passed”.
However, there will be an about turn, in the short term at least, on the checks carried out on imports.
In February, Mr Gove said full import controls were “necessary” from 1 January to keep UK borders “safe and secure” and to collect the appropriate taxes.
Under the revised plan, checks on goods entering Britain will be phased-in in three stages up to the summer of 2021, regardless of whether a deal is done with the EU or not.
- From 1 January, there will be checks on controlled substances, such as alcohol and tobacco, while standard goods, such as clothes and electronics, will be subject to basic customs procedures. But firms will have up to six months to complete customs declarations and pay relevant tariffs
- From 1 April, those importing products of animal origin, including meat, milk or egg products, will have to pre-notify officials and provide the relevant health paperwork
- By 1 July, all goods will be liable for relevant tariffs and customs declarations as well as full “safety and security” declarations. From this moment, there will be an increase in physical checks on livestock, plants and other sanitary and phytosanitary products at ports and other entry points
New border facilities will be built in order to process the required checks either at ports, or where there is not enough space, at “inland sites”.
Ministers said they would consult with ports about what new infrastructure was needed and where it should be located.
The proposals only apply to rules on imports, with checks on exports to the EU being determined by Brussels.
Mr Gove said the arrangements would be introduced in a way that gives businesses affected by coronavirus “time to adjust” but conceded “more work” was needed to ensure the UK was ready.
“From 1 January we will be outside the customs union and outside the single market so it’s appropriate we have checks on goods coming in to the UK,” he said.
“But it also appropriate that we take account of what’s happening with the coronavirus. And we want to make sure business has an opportunity to adjust in a pragmatic and flexible way.”
Firms are expected to have to fill in 200 million extra customs declarations every year and industry experts have said an extra 50,000 customs officials will need to be hired to deal with the extra paperwork.
Ministers have announced £50m in extra funding to support the new customs infrastructure, for IT systems and for recruiting and training new customs brokers and freight forwarders.
Commenting on the ongoing negotiations between the UK and the EU, BCC Director General Dr Adam Marshall said:
“Businesses need the two sides to knuckle down and agree a deal. Otherwise companies will have to spend cash they don’t have preparing for a ‘no deal’ scenario yet again, just as they try to cope with the impact of the worst economic crisis in living memory.
“Both the UK and EU need to signal a willingness to compromise when they meet next week. Allowing the present standoff to continue would be like kicking the economy when it’s already down. Livelihoods in both the UK and the EU depend on rapid moves to break the logjam.
“As we have been warning for years now, businesses still need detailed answers on a wide range of questions if they are to plan for change. That need is only intensifying as the end of the transition period comes into sight.”
On the UK government’s plans for easements at the Border: “Companies will be pleased to see the government adopting a pragmatic approach to customs procedures at the border. Many trading businesses were shocked when the government insisted that it would be imposing full checks and bureaucracy from day one – deal or no deal – and they will welcome this more practical and sensible approach.
“We have long campaigned for the UK government to prioritise flow across the border, not revenue or bureaucracy, when the transition period comes to an end. The very last thing ministers should seek to do is to pile new compliance costs on trading firms, who are already dealing with higher costs and lower revenues due to the coronavirus crisis.”
Commenting on additional grant funding to support customs agents, BCC Director of Trade Facilitation Liam Smyth said:
“We are pleased to see the government respond to our call to provide additional funding for customs agents. More than 150,000 traders will need support to make customs declarations for the first time, and this £50m will help to make that happen.”
Source: BBC News & The British Chambers of Commerce