Analysis of official EU statistics shows that since Brexit was imposed, tariffs on trade with the European Union have has been faced by British exports worth billions of pounds.
Taxes were applied on up to £3.5bn of British exports even though there is an agreement with the EU on a tariff-free deal, claimed a study by the University of Sussex. This is equivalent to about 10 per cent of all British goods that was exported to the EU.
T complexity of claiming zero tariffs was the reasons that some firms paid such taxes while others said that they have plans to reclaim the fees later.
British exporters to EU do not automatically get the benefit of zero tariffs under the post-Brexit deal. Such taxes and fees need to be claimed on customs declarations which now have to be a part of every export to the European Union since January this year.
European customs data from these declarations was used for the analysis by the University of Sussex’s Trade Policy Observatory.
In the first three months of 2021, a tariff was faced by between £2.5bn and £3.5bn of British exports to the EU, showed the figures.
The zero-tariff agreement was not used by €2.5bn of eligible UK exports, confirmed the European Commission based of the data collected by the bloc’s customs authorities.
“Tariff-free trade is only tariff-free if firms not only meet the rules of origin criteria, but also can deal with the necessary bureaucracy and paperwork,” said Prof Michael Gasiorek, trade expert at the University of Sussex.
“What this analysis shows is that in the first quarter, around 27% of trade that could have entered tariff-free did not do so.
“In some sectors and for some firms, this will no doubt improve, but it reflects the reality that leaving the EU has imposed real costs on firms, with long-term implications for trade and production.”
The data covers all British exports to the EU in January and February, and some reporting nations in March.
Incidents of exporters paying millions of pounds in tariffs have been mentioned in reports quoting individual businesses and groups.
Much of this was because of the complex arrangements for claiming zero tariffs as well as the difficulties over the re-export to the EU of goods processed in Britain. Another factor was the expectations among exports that they would be able to recover some of these fees at a later stage. Seven-figure tariff bills have been paid on export to the EU by some of the biggest multinationals of the world, said reports.
“The vast majority of traders have adjusted well to our new trading relationship with the EU. HMRC continues to work closely with exporters to ensure they correctly apply rules of origin requirements and are aware of their right to refunds. The unprecedented zero-tariff zero-quota deal we secured with the EU allows businesses to trade smoothly, while we can now regulate in a way that suits the UK economy and our businesses – doing things in a more innovative and effective way, without being bound by EU rules,” a government spokesperson told the media.
(Adapted from BBC.com)