MPs criticise HMRC efforts over Brexit customs IT systems

Public Accounts Committee alarmed over lack of information on business preparations

Brexit

MPs have castigated HMRC over more delays in its attempts to replace its customs systems in readiness for Brexit. MPs were also worried over the tax collector's approach to preparing traders for a 'no deal' situation.

HMRC was already planning the replacement of its customs IT system, known as CHIEF (Customs Handling of Import and Export Freight) with a new system called CDS (Customs Declaration System). The plans were underway before the UK's decision to leave the EU.

Meg Hillier, chair of the public accounts committee, wrote to Jon Thompson, permanent secretary at Her Majesty's Revenue and Customs to say that she was disappointed over the "slip in the timing" of the programme. She was also "concerned" that over the last two months little progress has been made.

She added in the letter that HMRC has not yet identified 100,000 small traders who would be affected by a new post-Brexit customs system. The number of businesses declaring customs to HMRC at the border is expected to increase from 150,000 to 295,000. While the number of declarations could grow from 55m to 255m after Brexit.

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Hillier asked in the letter why tax official had not told businesses how they could prepare for a no-deal Brexit.

"I am both concerned and disappointed that nearly two months on you have made little progress. You gave us no assurance that HMRC has a plan to ensure that businesses are aware of what they will need to do," Hillier said.

"We are particularly concerned about the 100,000 small traders that HMRC can not engage directly with, as you do not know who they are."

She added that the committee was "disappointed that despite your previous and repeated assurances about the progress of the CDS there has yet again been a slip in the timing just weeks after we last took evidence on the subject".

There are concerns that failure to have systems in place prior to Brexit could lead to long delays at ports and airports in the days and weeks after Brexit.

In a media statement, HMRC said that it has "well-developed plans to ensure that there will be a functioning customs, VAT and excise system in the unlikely event of a no deal".

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"We have engaged with business representative bodies who will be key partners in reaching businesses to ensure that they understand any implications for them."

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