Brexit customs plan won’t be ready until after Britain has already left EU

A plan for what Britain’s customs deal will look like after we leave the EU will not be ready until after the agreed deadline of Brexit.

The post-Brexit arrangement to replace the current customs union could take five years to fully implement, tax chief Jon Thompson has warned lawmakers.

And even that counts on the government agreeing on a model to take forward to the EU in the first place – which has so far proved unsuccessful as Tory infighting over Brexit continues.

Theresa May’s Brexit war cabinet are currently deciding over two options for the customs union replacement.

The ‘maximum facilitation’ model – which is favoured by Brexit supporters Boris Johnson and Michael Gove – would use trusted-trader arrangements and technology to avoid border checks.

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But the Prime Minister’s preferred option – a ‘customs partnership’ model – would see the UK collect tariffs for the EU on goods heading to Europe.

Eitherway, it could take three years to fully implement the new model, HMRC chief Mr Thompson said.

Despite this, Britain has vowed to leave the EU’s single market and customs union after Brexit, which legally takes place on March 29, 2019.

The real exit date will likely be delayed by a transition period lasting until December 31, 2021.

And there was more bad news – with Mr Thompson warning the ‘max fac’ model could cost businesses up to £20 billion a year.

The figure is higher than the £13 billion UK contribution to the EU in 2016.

But it will likely cost the UK billions more before the deal is even agreed, it has emerged.

Foreign Secretary Johnson today urged May ‘to get on with’ plans to leave the customs union, so that Britain can be free to strike trade deals with the rest of the world.

The government later acknowledged it must pay its Brexit divorce bill before securing a new trade deal with the EU, despite previously insisting the cash could be a bargaining chip.

The PM agreed in December to a financial settlement totalling £35 to £39 billion ($46.6 to $52.0 billion, 39.8 to 44.4 billion euros) that her ministers said depended on agreeing future trade ties.

But under repeated questioning by a committee of MPs, Brexit minister Suella Braverman – a leading eurosceptic in May’s Conservative party – was forced to concede this may not be the case.

MPs will vote later this year on the final withdrawal deal struck with Brussels before Brexit in 2019.

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The deal will include the financial settlement as part of a legally-binding withdrawal agreement, plans for a post-Brexit transition period and a political agreement on the framework of the future economic and security partnership.

In Brussels, meanwhile, the European Commission today put forward its draft budget for 2019, which included Britain’s contribution, as anticipated.

While Britain will leave in 2019, it had agreed to pay into the EU budget until the end of the transition phase.

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