The Government has announced that full border controls on goods entering the UK will not apply until July 2021, as it formally notified the EU it does not want an extension to the transition period.
It comes as the chancellor for the Duchy of Lancaster, Michael Gove, told the vice-president of the European Commission, Maroš Šefčovič, of the UK’s plans to press ahead with exiting the customs union and the single market on 31 December.
The UK had committed to introduce full import controls on EU goods in January. However, coronavirus has forced a rethink, with firms able to defer customs forms and tariff payments for six months and some physical checks delayed to July.
The three-phased plan for Brexit border checks was welcomed by industry leaders but represents the most dramatic change to international trading since 1993 when the single market was introduced.
Mr Gove said: “We have informed the EU today that we will not extend the transition period. The moment for extension has now passed. At the end of this year we will control our own laws and borders which is why we are able to take the sovereign decision to introduce arrangements in a way that gives businesses impacted by coronavirus time to adjust.
Customs controls, were expected in both directions of trade across the Channel, as well as regulatory and health checks. But ministers are now expected to adopt a more flexible approach on goods entering the UK to prevent the departure from the EU compounding the chaos from Covid-19.
The UK left the European Union at the end of January, but the transition period - during which existing trading rules and membership of the single market and customs union apply - lasts until the end of the year.
Opposition MPs have been pushing for it to be extended, with the Scottish and Welsh first ministers warning that exiting the current trading arrangements in just over six months time would be "extraordinarily reckless" given the economic damage and uncertainty caused by the coronavirus epidemic.
The Freight Transport Association, which had lobbied for the delays, said it was “extremely grateful” the government had listened to its concerns. The Road Haulage Association, a vocal critic of the government’s hardline approach to Brexit in the past, also welcomed the announcement.
In the first stage, full customs checks and tariffs will be imposed on “controlled” goods such as alcohol and tobacco. But importers of “standard” goods ranging from clothes to electronics will have up to six months to complete customs declarations and to pay tariffs, if any apply.
EU chief negotiator Michel Barnier lamented there having been “no significant areas of progress” as he accused the UK of having “backtracking” on the agreed political declaration.
His counterpart in Downing Street, David Frost, said they would have to "intensify and accelerate" the process if there was to be any chance of an agreement.
From July all goods will be subjected to customs declarations at the point of importation and relevant tariffs, which will be determined by the outcome of the current Brexit talks on the free-trade agreement.
Business leaders have long warned that new checks will mean major disruption to the supply chain and those who trade in fresh and chilled food still face checks on the EU side in key ports including Calais, Rotterdam, Zeebrugge and Dublin.
New border facilities will be built in order to process the required checks either at ports, or where there is not enough space, at "inland sites".
Ministers said they would consult with ports about what new infrastructure was needed and where it should be located.
The proposals only apply to rules on imports, with checks on exports to the EU being determined by Brussels.
Mr Gove said the arrangements would be introduced in a way that gives businesses affected by coronavirus "time to adjust" but conceded "more work" was needed to ensure the UK was ready.
Meanwhile, firms are expected to have to fill in 200 million extra customs declarations every year and industry experts have said an extra 50,000 customs officials will need to be hired to deal with the extra paperwork.
Ministers have announced £50m in extra funding to support the new customs infrastructure, for IT systems and for recruiting and training new customs brokers and freight forwarders.
Five further rounds of accelerated face to face meetings have now been scheduled for July and August with the hope of securing a plan deal by September in further talks.