Brexit onslaught! Fury grows at hated deal with EU – Britain to lose billions

Liz Truss grilled over ‘timescale’ of Protocol

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The Northern Ireland Protocol currently sees requirements to control cross border trade between Britain and the north, with customs checks being placed 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 reach stagnation.

According to the latest reports, cross-border tax complexities saw Britain lose £47.6billion in revenue last year, an average revenue loss of 16 percent on total EU exports.

The losses are causing anxiety for business owners wanting to trade with Northern Ireland and the rest of the EU.

With the UK seeking to amend the Northern Ireland Protocol, prior to potentially ripping up the agreement, the EU has warned any destructive action will no doubt lead to a trade war and imposed tariffs between the UK and the EU.

Talks have yet to provide any constructive advances on the deal, with a war of words continuing between both parties.

Brussels has accused Britain of “dragging its feet” over the talks, whilst the UK has hit back saying the EU “does not care” about the people of Northern Ireland.

Experts believe UK businesses are looking to expand trade with the EU as both parties emerge from the economic fallout caused by the Covid pandemic.

One financial media outlet suggested around 72 percent of businesses want to expand trade with at least one market within the European Union.

However, red tape and bureaucracy around taxes could stand in the way.

According to the financial outlet, “Just under a third of respondents currently exporting to the EU are planning to exit at least one market, and 3 in 5) of businesses revealed the fear of being fined for tax compliance has recently caused them to reverse plans to sell goods in a European country.”

Fears are now mounting that the loss of earnings over such red tape could extend well into the future.

With little progress set to be made on taxation laws, researchers predict a further £16.1billion of value lost to the UK by the year 2026.

Alex Baulf, Senior Director of Global Indirect Tax at Avalara said: “From the toll of Brexit-based regulation changes to the uncertainty of the pandemic,
anxiety levels have been skyrocketing as tax complexity has become a major red tape headache, causing business leaders many a sleepless night.”

Speaking to City AM, he added: “The compliance burdens on businesses are becoming almost unmanageable, and the fear of falling foul of compliance standards is hampering growth opportunities for British exporters.

“This is hurting the economy.

“Businesses need greater support and clarity from regulators to help them navigate these changes and remove hurdles, and must invest in digitisation to take more of the administrative and compliance burden away.”

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Nina Skero, Chief Executive at Cebr, said: “If the EU was part of the domestic market, exporters were set to make just over £300billion in revenue, instead of the £252billion they actually earned.”

Ms Skero also suggested in addition to these missed sales to the EU, the export activity which does take place comes with a higher administrative burden which led to an additional loss of £386million in gross value added (GVA) last year.

She added: “These firm-level losses are impacting economic growth prospects, preventing an estimated £8.7billion worth of investment which could support GDP by a further £16.1billion in the longer term.

“This means that if UK businesses were unhindered by EU cross-border tax complexity UK GDP in 2026 could be 0.63 percent higher.”

Should the NI Protocol be scrapped? How will Britain fare if it enters a trade war with the EU? Can the UK recover its losses caused by Brexit? Let us know what you think by CLICKING HERE and joining the debate in our comments section below – Every Voice Matters!

For Northern Ireland, a new report by the Institute of Economic Affairs says the Protocol is “failing to deliver in its key objectives” and “there has been a significant diversion of trade, an outcome it expressly sought to avoid”.

The institute suggested: “In the absence of agreement from the EU, the UK has grounds to take unilateral action to ensure prosperity and stability in Northern Ireland”.

According to the same report, the Protocol is costing Northern Ireland around £850million per year in lost earnings.

This includes £360million in establishing and operating the Trade Support Service in its first two years, a further £150million on digital agri-food certification and tens of millions more in related funding to the NI Executive.

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