Photo: PA

Britain will waive all checks at the Irish border and use an online system to collect VAT payments for goods crossing the Irish border under plans revealed by government today.

The "temporary" plans, which were unveiled just hours after Theresa May's Brexit deal was again defeated in the House of Commons, set out plans to cut tariffs for a host of imports, so that 87% of all imports to Britain by value will be eligible for zero-tariff access - up from 80% at present.

Under the plan to keep the Irish border free of physical checks, ministers also confirmed that import tariffs will not apply to EU goods crossing into Northern Ireland from the Republic, while no new checks or controls on goods moving across the border will be introduced.

Under a no-deal outcome, the government said it will instead ask businesses to self-report the movement of goods, while an online system will be set up to collect VAT payments.

Goods arriving into Northern Ireland from Ireland would still be subject to the same VAT and Excise duty as today and the UK government would continue to collect these taxes on Irish goods in future. VAT registered businesses would continue to account for VAT on their normal VAT returns, but small businesses trading across the border and not currently VAT registered would be able to report VAT online periodically, without any new processes at the border.

Trade minister George Hollingbery said: “Our priority is securing a deal with the EU as this will avoid disruption to our global trading relationships.

“However, we must prepare for all eventualities. If we leave without a deal, we will set the majority of our import tariffs to zero, whilst maintaining tariffs for the most sensitive industries.”