Small border farms may get tax-free status - UK Brexit Secretary

Britain's Brexit Secretary David Davis leaving 10 Downing Street, London, after a Cabinet meeting. Picture: Victoria Jones/PA Wire
Britain's Brexit Secretary David Davis leaving 10 Downing Street, London, after a Cabinet meeting. Picture: Victoria Jones/PA Wire
Brexit Secretary David Davis (Leon Neal/PA)

James Rothwell

Farms and small businesses that straddle the Irish border could be given tax-free status, the Brexit Secretary has said.

David Davis said "quite large exemptions" may be granted to businesses that are not given authorised economic operator status - "trusted traders" - to enable trade to continue between here and the Republic.

In an interview with Gerard Baker, editor in chief of the Wall Street Journal, Mr Davis said one "area of difficulty" was "very small businesses" straddling the border, such as farms and "tiny" companies.

"That is going to have to be addressed.

"We think, in the first case by quite large exemptions, so in effect we will give them tax-free status," the Brexit chief added.

Irish business leaders and politicians have reacted with skepticism to the idea.

Stephen Kelly, the chief executive of Manufacturing NI, said Mr Davis' appeared to be unaware that several of the small businesses operating on the border were "actually quite large."

"For instance, the Dale Farm cheese processing plant at Dunman Bridge employs around 80 people but is one of the largest and most advanced in Europe."

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This could open the door to any business with premises straddling the border benefiting from tax-free status regardless of their size, he added.

Neale Richmond, an Irish senator from the ruling Fine Gael party said: "It's an interesting kite to fly, but I don't think it's realistic."

"It veers near Bernard Jenkin's suggestion that a blind eye can be turned to smuggling," he added, referring to concerns that the border could become a smugglers' paradise if customs and excise checks are not carried out after Brexit.

Mr Richmond added that tax breaks would not help farmers cope with swathes of red tape which could be created by Brexit, as those with a farm that straddles the border could be caught between two separate regulatory regimes.

"Animal health standards are a massive issue. An overall customs or trading deal between the EU and the UK must be the aim."

Mr Davis also warned that parliament was "unlikely" to sign off the withdrawal deal unless it was a "substantive" agreement.

"The withdrawal agreement involves payments of up to £39 billion. It's a lot of money and Parliament is unlikely to sign off such a deal unless we can be pretty substantive what's going to be there in the long run," he said.

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