Liz Truss grilled on protocol ‘calendar’
The Northern Ireland protocol currently requires cross-border trade between Britain and the north to be checked, with customs checks being carried out on goods. As part of the Withdrawal Agreement, a pseudo-border along the Irish Sea has effectively separated Northern Ireland from Britain as talks between London and Brussels stall.
According to the latest reports, cross-border tax complexities caused Britain to lose £47.6 billion in revenue last year, an average revenue loss of 16% of total EU exports.
The losses are worrying business owners who want to trade with Northern Ireland and the rest of the EU.
As the UK seeks to amend the Northern Ireland protocol, before potentially tearing up the deal, the EU has warned that any destructive action will undoubtedly lead to a trade war and imposed tariffs between the Kingdom UK and EU.
The talks have yet to deliver constructive progress on the deal, with a war of words continuing between the two sides.
Brussels has accused Britain of “dragging its feet” in the talks, while the UK hit back saying the EU “doesn’t care” about the people of Northern Ireland.
EU bureaucracy caused huge losses to Britain
Trade unionists feel abandoned by London
Experts believe British businesses are looking to expand trade with the EU as both sides emerge from the economic fallout caused by the Covid pandemic.
A financial media outlet suggested that around 72% of companies wanted to develop their trade with at least one market within the European Union.
However, the paperwork and bureaucracy surrounding taxes could get in the way.
According to the financial outlet, “Just under a third of respondents currently exporting to the EU are considering leaving at least one market, and 3 in 5 companies revealed that fear of being fined for tax compliance recently caused them to reverse their plans to sell goods in a European country.
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Bureaucracy and bureaucracy have seen Britain lose billions
Fears are now growing that the loss of revenue due to such bureaucracy could linger long into the future.
With little progress to be made on tax laws, researchers predict a further loss of £16.1 billion for the UK by 2026.
Alex Baulf, Senior Director of Global Indirect Tax at Avalara, said: “From the toll of Brexit-based regulatory changes to the uncertainty of the pandemic,
anxiety levels have skyrocketed as tax complexity has become a major bureaucratic headache, giving business leaders many sleepless nights.
Speaking to City AM, he added: “Compliance burdens on businesses are becoming almost unmanageable, and fear of failing to meet compliance standards is hampering growth opportunities for UK exporters.
“It hurts the economy.
“Companies need greater support and clarity from regulators to help them navigate these changes and break down barriers, and must invest in digitalization to further ease administrative and compliance burden. .”
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Another £16.1 billion could be lost by 2026
Nina Skero, CEO of Cebr, said: “If the EU was part of the internal market, exporters would have to make just over £300 billion in revenue, instead of the £252 billion they have actually earned.
Ms Skero also suggested that on top of these missed sales to the EU, the export activity that takes place comes with a higher administrative burden which has resulted in an additional loss of £386 million in gross value added (GVA) last year.
She added: “These company-level losses are impacting the outlook for economic growth, preventing an estimated £8.7bn of investment that could support GDP by a further £16.1bn longer. term.
“This means that if UK businesses were not hampered by cross-border EU tax complexity, UK GDP in 2026 could be 0.63% higher.”
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Northern Ireland loses £850m a year from protocol
For Northern Ireland, a new report from the Institute of Economic Affairs says the protocol “falls short of achieving its key objectives” and “there has been significant trade diversion, an outcome it expressly sought to avoid”.
The institute suggested: “In the absence of an EU deal, the UK has reason to take unilateral action to ensure prosperity and stability in Northern Ireland.”
According to the same report, the protocol costs Northern Ireland around £850million a year in lost revenue.
This includes £360m for building and operating the trade support service in its first two years, a further £150m for digital agri-food certification and tens of millions more in related funding for the executive of NI.