Trade bodies have threatened legal action against the Government’s new Brexit customs system, claiming it will unfairly distort competition.
In a heated meeting of HM Revenue and Customs’s expert customs panel, industry groups said the new Trader Support Service, which will enable the Government effectively to act as a customs agent on behalf of traders, would destroy businesses that provided customs brokerage services themselves.
Last week, Michael Gove, the Cabinet Office minister, announced that the TSS would be free at the point of use and operational from September, with the goal of protecting trade flows across the Irish Sea when the UK leaves the EU single market and customs union.
However, HMRC clarified on the call that the system would not only help companies complete paperwork for transporting goods to Northern Ireland from the rest of Britain but also from the rest of the world, at an estimated cost of £355m to the Treasury.
One trade group suggested the Attorney General should be consulted on the TSS’s legality, according to three sources on the panel.
Peter MacSwiney, chairman of the joint customs consultative committee, said: “The Northern Irish brokerage community are not happy that they’re likely to lose all their customers to a free government service.”
The British International Freight Association told HMRC its members were “fuming” they would not be eligible to be compensated for providing customs services, while another group flagged worries about the security of submitting commercially sensitive customs data to private contractors.
HMRC said: “The TSS will provide unprecedented support to all businesses engaging in new processes under the Northern Ireland Protocol and its announcement has been warmly received by them. We are running a transparent and open procurement process to identify a bidder capable of delivering this and will ensure a service that is fully compliant with the law. We are engaging actively with stakeholders as part of this process.”