ADS has written to the Treasury Select Committee and the Exiting the European Union Committee saying that the post-Brexit cost burden on the aerospace, defence, security and space sectors in the UK will be a combined £2.3 billion, up from its previous estimate of £1.5 billion last autumn.

ADS’ latest assessment suggests that the government’s maximum facilitation option would potentially impose the additional cost burden on these sectors.

The proposed maximum facilitation approach – also known as “max-fac” – would use new technologies and trusted trader schemes to remove the need for physical customs checks. Trusted trader schemes would allow businesses to pay duties every few months rather than each time they crossed the border.

Max fac

The chief executive of HM Revenue and Customs recently told MPs that companies would have to pay £32.50 for each customs declaration under the “max fac” solution, and this could cost up to £20 billion a year.

ADS Chief Executive Paul Everitt, said: “Our updated cost assessment has risen from last year’s estimate due to the increase in the value of exports to the EU in our four sectors in 2017. This reflects global growth and the critical role UK companies play in highly integrated European supply chains.”

He added: “It is ADS’s view that a customs union combined with a high level of regulatory alignment between the UK and EU is necessary to minimise new costs, maintain industrial competitiveness, and protect the high value jobs our sectors provide.”

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