As the rules governing customs are mostly in EU law that is directly applicable in the UK, and existing UK legislation is insufficient to establish a standalone customs regime, leaving the EU will mean that the UK will require new domestic legislation.

The Treasury says the Bill does not presuppose any particular outcome from the negotiations. In assessing the options for the UK’s future customs relationship with the EU (and therefore, how the government uses the powers in the Bill), three strategic objectives will come into play.

These are ensuring UK-EU trade is as frictionless as possible; avoiding a hard border between Ireland and Northern Ireland; and establishing an independent international trade policy.

Philip Hammond, Chancellor of the Exchequer, said: ‘Britain is a great trading nation and innovative UK businesses are central to the success of our economy. This Bill represents the first step in setting up an independent UK customs regime and reaffirms our commitment to deliver a smooth transition for businesses as we leave the EU.’

The bill is designed to allow the government to charge and vary customs duty on goods; specify which goods are subject to what duty; and set preferential or additional duties in certain circumstances – for example to while protecting domestic industries or to support developing countries by offering preferential treatment.

Guidance: Taxation (Cross-border Trade) Bill is here.

Report by Pat Sweet