herald

Tuesday 12 November 2019

No-deal Brexit could see return of 'booze cruise' on Irish Sea

Paschal Donohoe
Paschal Donohoe

A hard Brexit could herald the return of the 'booze cruise' across the Irish Sea as shoppers go in search of cheap alcohol and cigarettes.

Experts in the Department of Finance have warned that if the UK crashes out of the EU in October it will result in duty-free shops in airports and ports.

The price of a packet of 20 cigarettes will be as little as €3 for people travelling from the UK into this country.

Dramatically cheaper spirits could also result in day trips across the Irish Sea similar to ones that were common before the EU banned duty-free sales within the single market 20 years ago.

The Department of Finance is warning that if a disorderly Brexit occurs, the UK will be considered "a third country for the purposes of excise duty".

Officials predict this will prompt shoppers to take advantage of duty-free allowances and will "promote further fiscally motivated travel".

Latest figures show that 7.6 million passengers arrived in Ireland from the UK in 2017.

"For illustrative purposes, if 50pc of the total passengers arriving in Ireland from the UK availed of tax-free allowances within the fixed limits for cigarettes and spirits alone, this would have involved the import of 760 million cigarettes and 3.8 million litres of spirits," the advice document says.

It adds that this would cost the Exchequer €350m in a year even before the related economic impact on the Irish retail sector is taken into account.

In an advice prepared for Finance Minister Paschal Donohoe, the experts warn that the UK has not stated its position on duty-free sales in a post-Brexit environment.

The assumption was that the issue would be dealt with during the transition period after it leaves the EU. However, the UK is currently on course to crash out on October 31.

Block

In that event, it will not be possible to apply excise duty or VAT on alcohol or cigarettes moving between the countries.

The Government has already passed legislation which will allow it to block duty-free sales on goods moving between Ireland and the UK - but the House of Commons has no similar plan in place.

"If the UK apply a duty-free scheme post Brexit, Ireland will not commence the section in the Brexit Omnibus Act and duty-free sales will be possible for travellers between Ireland and UK," the document notes.

Promoted articles

Entertainment News