Brexit Causes 62% Increase in UK Firms’ Customs Duties
The United Kingdom’s exit from the European Union has caused a significant increase in customs duties for UK firms. According to a recent report, customs duties have increased by 62% since Brexit took effect on January 1, 2021.
The report, which was conducted by the UK’s Office for Budget Responsibility (OBR), found that customs duties collected by the UK government increased from Â£3.3 billion in 2019-2020 to Â£5.3 billion in 2020-2021. This increase is largely due to the fact that the UK is no longer part of the EU’s customs union, which means that UK firms must now pay customs duties on goods imported from the EU.
The OBR report also found that the increase in customs duties has had a significant impact on UK businesses, particularly small and medium-sized enterprises (SMEs). SMEs are more likely to import goods from the EU and are therefore more likely to be affected by the increase in customs duties.
The report states that “the increase in customs duties is likely to have a negative impact on UK businesses, particularly SMEs, which may struggle to absorb the additional costs. This could lead to higher prices for consumers and reduced competitiveness for UK firms.”
The UK government has acknowledged the impact of Brexit on UK businesses and has introduced a number of measures to support them. These include a Â£20 million SME Brexit Support Fund, which provides grants of up to Â£2,000 to help SMEs adapt to new customs and tax rules.
However, many UK businesses are still struggling to adapt to the new customs rules and are calling for more support from the government. The British Chambers of Commerce (BCC) recently called for a “radical simplification” of customs procedures to help UK businesses navigate the new rules.
In conclusion, Brexit has caused a significant increase in customs duties for UK firms, which is likely to have a negative impact on UK businesses, particularly SMEs. While the UK government has introduced measures to support businesses, more needs to be done to help them adapt to the new customs rules and remain competitive in the global market.