MPs slam HMRC's 'deeply worrying' lack of post-Brexit customs system

Food could be left rotting in trucks at the border

MPs have today warned of the "catastrophic" scenario of UK taxmen at HMRC failing to have a back-up system in place if its Customs Declaration Service (CDS) programme is not ready in time for Brexit.

A failed customs system could lead to huge disruption for businesses, with delays potentially causing massive queues at Dover and resulting in food being left to rot in trucks at the border, warned Parliament's Public Accounts Committee.

In 2015, there were around 55 million customs declarations, a figure which is set to increase to 255 million after Brexit. However, CDS was originally designed to handle 150 million declarations each year.

Committee chair Meg Hillier said the body does not yet have funding to increase the capacity of CDS to deal with the consequences of Brexit – nor to develop contingency options.

She said: "This is deeply worrying. HMRC requires a relatively small sum to upgrade the current CHIEF system – a move which would provide some peace of mind to traders, many of whom are still operating with limited information and in great uncertainty."

HMRC started planning to replace its customs system, known as Customs Handling of Import and Export Freight, prior to Brexit following changes to EU legislation which would have been costly and difficult to make using CHIEF's ageing technology.

The department has said using its existing CHIEF system is the main contingency option if CDS isn't ready, something it is developing as a contingency option in parallel with its implementation of CDS.

Hillier said: "HMRC tells us it is merely 'in conversation' over CHIEF upgrade costs when, on behalf of business and the British public, it should be banging on the doors of the Treasury.

"HMRC must press the case to secure this funding now and ensure that, if other plans fail, customs will be fit for purpose."

PAC noted that HMRC "is currently managing an unsustainable amount of change" which could put the delivery of CDS at risk.

The department is in the middle of a major transformation programme, with 15 programmes and more than 250 projects in its change portfolio.

This includes the "Making Tax Digital" programmes through which HMRC is modernising tax administration for individuals and businesses using digital solutions.

"HMRC told us that CDS is one of its seven most important programmes but we are concerned about the Department's ability to balance its overall risks and ensure it puts emphasis on the right areas," said the body.

The department has said that CDS is on track and is well governed. However, it has admitted that major risks remain, meaning CDS might not be fully operating by the planned date of January 2019. ®