Businesses would have to spend £15bn a year on filling out customs forms if there is no-deal Brexit, HMRC document says

Businesses would be hit with a £15bn a year bill for filling out customs forms if there is a no-deal Brexit, according to a new government assessment.

The HM Revenue and Customs (HMRC) analysis said companies would face a "significant new and ongoing administrative burden" when transporting goods between the UK and EU in the event of no-deal.

The finding means companies are likely to have to fork out more in administration costs if there is no Brexit deal than the entire £12bn per year that Boris Johnson claims the UK will save when it leaves the EU.

HMRC said UK importers and exporters would likely have to fill out 215 million customs forms a year if Britain crashes out of the bloc.

With administrative costs of between £15 and £56 per form, the total burden on UK businesses would be £7.5bn per year, it said.

HMRC said similar expenses would be expected to hit EU businesses shipping goods to and from the UK, giving a total cost of £15bn, assuming trade remains at 2017 levels.

The hefty burden means that "costs imposed on UK or EU businesses will have wider implications for supply chains therefore for consumers and businesses in either market", the assessment found.

HMRC estimated that companies would have to pay around £28 in administration costs per customs form, given it would take an employee an hour and a quarter to fill out each one.

If this was outsourced to a specialist company then the time would be cut to one hour per declaration, it said, but the cost would rise to £56 per form once charges were included.

The estimates do not include the cost of companies having to amend their systems and train staff in how to use the new customs regime.

The analysis was published as the Institute for Fiscal Studies (IFS) said even a "relatively benign" no-deal Brexit would result in UK debt rising to its highest level since the 1960s.

Borrowing would rise to £100bn and overall debt would increase to 90 per cent of national income, the think-tank said.

Labour MP Margaret Beckett, a leading supporter of the campaign for a fresh Brexit referendum, said: “The IFS and HMRC today confirmed no-deal would be a disaster for the economy, for jobs and for living standards and we know it will risk supplies of food and medicine and the security of our country.

"It would mean the Brexit crisis dragging on for years to come, with the UK left in a much weaker negotiating position, desperately trying to put our shattered relationships with our friends and allies in Europe back together from scratch. But the wreckers in Downing Street don’t care about any of that. They will not be the ones left to pick up the pieces."

But Boris Johnson's spokesman said: “These figures are estimates. The final costs of completing customs declarations will vary significantly from business to business, depending on how often they trade. We expect them to reduce over time as businesses become more proficient in filling in customs declarations.”