WellTax Blog

UK post-Brexit customs plan

May 7, 2018

Theresa May is struggling to implement a plan for a complex customs system between the UK and the EU after Brexit.

The prime minister has tried to convince “Eurosceptic ministers” to support his proposal for a “facilitated customs arrangement” ahead of a crucial cabinet meeting on Friday.

The proposal says that the goods would arrive in Britain post-Brexit were hit by a UK tariff, established independently of EU rates. However, British customs officials have suggested a potentially higher EU tariff for goods that would transit via the UK to the bloc’s single market.

Another problem may be the reaction of Brussels to the last raised customs plan: a contorted compromise designed to unite the war sides of Mrs May’s cabinet.

With Theresa May’s cabinet meeting on Friday to finalize a key strategic document on UK’s future relations with the EU, financiers and ministers seem equally divided on the type of agreements they want after Brexit.

Concerns in London where several weeks ago the city was united to push for a post-Brexit financial services regulation plan based on a concept defined as “mutual recognition”, in which the United Kingdom and the EU recognized the respective rules on banks, fund management groups and insurance companies.

The prime minister spoke of mutual recognition in his speech on Brexit in March, and Chancellor Philip Hammond approved it soon after.

But financiers and ministers were frightened by the refusal of the plan by Michel Barnier, Brexit’s main negotiator with the EU last month.

It was then clarified that Barnier’s hostile response was not a negotiating position, simply the “concept” of mutual recognition would have been unacceptable to the other single market countries.

Article from the ‘Financial Times’

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