Between January and March, according to a BBC survey, £ 3.5 billion (€4 billion) of goods entering the EU were taxed by the UK. That accounts for 10 percent of UK exports to the EU. This is striking because the EU-UK trade deal agreed on tariff-free trade.
The trade agreement concluded by the European Union and the United Kingdom on Christmas Eve last year included an agreement that both European countries and the UK do not have to pay import/export taxes if they export goods to each other.
However, in the first three months after Brexit, 10 percent of exported British goods were taxed. This happened because companies have to declare that they do not have to pay import taxes and therefore this is not automatic. According to the BBC, the administration is so complicated for many entrepreneurs that they did not fill out the papers or decided to ask for their money back later.
The BBC estimated that around EUR 4 billion of goods were taxed, but the European Commission puts it at EUR 2.5 billion.
“According to data from our customs services, some EUR 2.5 billion of goods did not enter the country tax-free,” the Commission tells the BBC.
Moreover, exports from the UK to Europe are not yet entirely satisfactory. According to the British trade watchdog, exports in the textile sector fell 63% in January compared to a year ago. Also, 36 percent less power and 20 percent less cars or parts were exported in January. The research focuses specifically on Brexit and does not take into account the impact of COVID-19.