Business News

Brexit cross-border tax complexities cost UK economy £47bn

May 20, 2022

Cross-border tax complexities with the EU cost the UK economy £47.6 billion in lost revenue last year, according to fresh data from the Centre for Economics and Business Research (CEBR).

The stresses of navigating complex regulations post-Brexit continues to hold back growth for UK exporters, with an average revenue loss of 16% on total EU exports in 2021.

With little set to change, the research predicts that the investment loss due to complex tax compliance will cost the UK a further £16.1bn by 2026.

Nina Skero, chief executive at CEBR, said:

"If the EU was part of the domestic market, exporters were set to make just over £300bn in revenue, instead of the £252bn they actually earned."

According to Skero, export activity that did take place came with a higher administrative cost, causing an additional loss of £386 million in gross value added.

She added:

"These firm-level losses are impacting economic growth prospects, preventing an estimated £8.7bn worth of investment which could support GDP by a further £16.1bn in the longer-term.

"This means that if UK businesses were unhindered by EU cross-border tax complexity UK GDP in 2026 could be 0.63 per cent higher."

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