Timber Industry could face “£1 billion Brexit bill” if UK leaves Customs Union
The UK timber industry is said to face a potential “billion pound Brexit bill” if Britain leaves the EU Customs Union, the Timber Trade Federation (TTF) has said in a statement.
“Some 90% of timber used in construction is imported from Europe, which British timber supplies are insufficient to replace,” says TTF managing director, David Hopkins. “Under the proposed Taxation Bill, once the UK leaves the EU and its VAT area, VAT on EU imports will have to be paid up-front. This will cause considerable problems for the SMEs who make up the majority of our sector.”
The Federation has launched an infographic for legislators, Parliamentarians and the public, explaining what it calls ‘The Timber Tax Bombshell’.
Additional problems highlighted, not just for the timber sector but for construction supply chains in general, include potential delays, and greater costs for storing timber at ports and in administering customs checks and documentation.
“Builders’ merchants, and their customers, responsible for fulfilling government housing targets, rely on just-in-time deliveries of timber to premises and sites. Currently timber entering the UK from the EU clears ports immediately with no need for customs checks,” continued David. “Over 60% of the timber used in the UK comes from Europe.”
The Timber Trade Federation is asking government to ensure timber imports are able to clear customers in the same manner as present, with no delays or up-front costs likely to penalise SMEs, or to impact Britain’s housing supply chains. “The government must also preserve the existing VAT payments system for imports from the EU, or put in place a new system which maintains the same benefits,” he added.
The timber sector reportedly currently employs around 200,000 people across the UK in manufacturing, distribution and construction. Every Parliamentary constituency benefits from jobs stemming from or connected to the timber industry. Timber prices in the construction supply chain to small builders have already risen by 8% in the last 12 months, according to the Federation of Master Builders. The TTF reports this is mainly due to the currency depreciation since the Brexit vote, and competitive global markets for construction timber pressurising supplies into the UK.