Companies face an extra £20 billion a year in costs to comply with the customs arrangement if there is a no-deal Brexit, Britain’s most senior tax official said yesterday.

Jon Thompson, permanent secretary at Her Majesty’s Revenue and Customs, told lawmakers that leaving the EU with no deal would cost business a similar amount to a customs arrangement known as “max fac” – or maximum facilitation – because companies would have to fill in customs declarations. 

“If we move to WTO (World Trade Organisation) rules, that would definitely require customs declarations so it would be similar in terms of costs,” Thompson said when asked about the cost of a no-deal Brexit.

Prime Minister Theresa May has pledged to take Britain out of the customs union with the EU, a step she argues is necessary so that London can strike its own trade deals around the world. But May’s government has yet to set out to the EU’s satisfaction how it would achieve that without erecting a land border to control goods between the British province of Northern Ireland and EU member, the Republic of Ireland, which Britain has promised it will not do.