With a no-deal Brexit appearing increasingly likely, HMRC is now warning that, in that event, 245,000 businesses would face a tsunami of new customs declarations, tariffs and VAT obligations after 29 March.
The most significant Brexit-related development of the week was a series of votes in the House of Commons on amendments to an anodyne government motion, which gave different groups of MPs a chance to suggest alternative ways forward on Brexit. The key results were that Parliament failed to ‘take control’ of the Brexit process from government, and MPs indicated that the withdrawal agreement could get parliamentary support if the Irish Border backstop is replaced with something more acceptable to MPs. With the EU repeating its opposition to reopening the withdrawal agreement this will not be achieved easily. There is, however, increasing speculation that compromise might be possible – with both the EU and Labour – around a UK-EU customs union.
The government continues to lay Brexit-related statutory instruments (SIs) in preparation for a possible ‘no deal’ exit from the EU, including a number in the tax area. Since the start of 2019 six VAT-related SIs have been laid, plus three relating to Excise Duty and one relating to Customs.
MPs on a delegated legislation committee have approved three statutory instruments (SIs) establishing a customs union between the UK and three Crown Dependencies (Jersey, Guernsey and the Isle of Man), following less than 20 minutes of debate.
The draft Withdrawal Agreement published on Wednesday sets out the terms of the UK’s exit from the EU, including a Protocol on Northern Ireland. It reflects agreement in principle between the UK and EU negotiating teams on the full legal text. The government intends to lay a final version of the agreement before Parliament once it is finalised. The outline of the Political Declaration on the future relationship sets out progress on the scope of the framework for the future relationship. Negotiations are ongoing to finalise the Political Declaration.