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British business faces paying £20BILLION a year under the Tory Brexiteers' customs plan, the head of the customs office declared today.

Jon Thompson, chief executive of HM Revenue and Customs, said the “max fac” system could cost business between £17bn and £20bn - or £385million a week.

And he revealed it won't be ready in time before Britain's Brexit transition period ends in December 2020.

The Tories are struggling to decide between two options for customs arrangements after we leave the bloc.

So-called "max fac", which would use technology to prevent a hard border on the island of Ireland, is preferred by leading Brexiteers including Boris Johnson.

But grilled by the Commons Treasury committee, Mr Thompson said under this form of arrangement each post Brexit customs declaration is likely to cost business £32.50.

By comparison the alternative 'partnership' model, which would involve the UK collecting tariffs on behalf of the EU, would cost a maximum of £3.4bn, he said.

(Image: PA) (Image: REUTERS/Darren Staples)

Mr Thompson told the committee there was an argument that the partnership would cost business zero because firms would get a refund.

He said the set-up cost for the partnership would be about £700m.

But the HMRC boss also revealed that either arrangement is likely to take up to five years to implement from the moment one is decided upon.

Mr Thompson told MPs: "We believe both of the government's options which were set out last September are deliverable."

It came hours after he said elements of the 'max fac' option would take up to three years - meaning they weren't in time for the end of 2020.

Hilary Benn, chairman of the Commons Brexit Committee, said: "Presumably either the transition is extended or we remain in a customs union beyond 2020? Because I can't think of any other option."

Mr Thompson said the HMRC did not have an opinion on a preferred model.

He told MPs there were 1,100 staff working on Brexit and that HMRC has been given £260m by the government this year to spend on preparing for Brexit.

Quizzed by MPs, Mr Thompson revealed that 39 other HMRC projects had been postponed or delayed because of their work on the proposed customs arrangements with the EU after Brexit.

Labour MP Jo Stevens, of anti-Brexit group Best for Britain, said: "This is Boris' 20 billion Brexit bombshell and it threatens to blow up our economy.

"This shocking evidence from the chief taxman today shows that Brexiteers don’t care about the carnage it will cause to the economy.

"This will hurt businesses up and down the country and threaten jobs."

Labour MP Stephen Doughty, of the campaign for a People's Vote to halt the Brexit deal, said: "Perhaps the worst part of the whole Brexit shambles is that the Government is pursuing a path they know will make the whole country poorer.

“It will be a bombshell of bureaucracy for British businesses and will cost jobs."

But Number 10 played down the estimated £20 bn cost as "speculation".

Downing Street: “The Prime Minister has asked for work to be done on both customs models. That work is ongoing and therefore any speculation about implementation is just that.”