The UK government's spending watchdog has warned HMRC is biting off more than it can chew by undergoing major transformational projects while simultaneously coping with the fallout of Brexit.
HMRC's transformation programme is not as "deliverable" as planned due to unrealistic assumptions and increased pressure from the additional workload caused by Brexit, the Public Accounts Committee warned today.
The department is undertaking 15 major transformation programmes, including making tax digital for individuals and businesses, developing the Customs Declaration Service (CDS) system, and supporting the introduction of Universal Credit.
Many of those have already been flagged as high-risk projects by the committee – such as the potentially "catastrophic" scenario of not having a backup in place of CDS after Brexit.
In its annual report, the body noted a major challenge is the significant volume of technological change that underpins its big projects.
Committee chairman Meg Hillier said: "HMRC's transformation programme would have been less risky had it not attempted to do everything at the same time.
"What was already a precarious high-wire act is now being battered by the winds of Brexit, with potentially catastrophic consequences.
"Action arising from allegations in the so-called Paradise Papers could also significantly increase the authority's workload."
The taxman told MPs that it does "not believe it is credible... to continue with the transformation programme as it is in light of the extra workload from Brexit, implementation of policies announced in fiscal events and the extent of technological change built into the transformation programme."
Other big projects to have come under scrutiny include the department's overhaul of its £10bn Aspire IT deal, the largest project in Europe, and the Making Tax Digital programme, which has now been delayed util 2020. ®