Home Brexit UK customs duties jump 63% in a year to record £4.7bn adding to cost of living crisis

UK customs duties jump 63% in a year to record £4.7bn adding to cost of living crisis

by LLB Finance Reporter
22nd Mar 22 12:40 pm

Customs duties paid by UK businesses have jumped 63% to a record £4.7bn in the year to 31 January 2022, up from £2.9bn in the previous 12 months, shows research from UHY Hacker Young, the national accountancy group.

The figures show that the last six months to 28 February 2022 are the six highest months on record for customs duties paid, with £2.6bn paid in that period alone. Over the past five years, the total amount of customs duties paid has averaged just £3.3bn per year.

UHY Hacker Young says the rise comes as post-Brexit increases in customs duties begin to bite for UK businesses and consumers.

Post-Brexit ‘Rule of Origin’ requirements have dragged far more imports into the customs duty net. These rules mean anything sold in the UK by EU businesses must wholly or largely originate in the EU to be exempt from customs duties when it enters the UK.

UHY Hacker Young adds that the tightening of the ‘Rules of Origin’ requirements looks to be already having an impact on UK businesses and consumers. From January 1, the Government introduced a requirement that importers must show a declaration about the origin of the goods at the point of entry. If a business cannot prove the origin, they face paying the full rate of customs duty and additional penalties.

Sean Glancy, Partner at UHY Hacker Young, says: “These figures show that post-Brexit increases in customs costs are hitting businesses and consumers hard.”

“With UK consumers already being hit by a cost-of-living crisis driven by increased energy costs and rising taxes, the jump in customs tariffs is the last thing they need.”

“Businesses are struggling under the weight of tariff costs and additional paperwork. These additional costs are biting just as they try to recover from pandemic-related costs and interruptions.”

“Since Brexit, customs duties have substantially increased costs for many businesses, in some cases making a dramatic impact on the bottom line. Businesses which are heavily dependent on trade with the EU may well be looking to reassess their models.”

“UK consumers are likely to face price increases at a time when the cost of living is already rising. They may also find familiar products no longer in stock should UK businesses cut imports of EU products.”

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