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

GETTYMPs are worried that not enough money is in place to upgrade customs service

GETTYMPs are worried that not enough money is in place to upgrade customs service

The cross party committee said the number of customs declarations which HM Revenue and Customs must process each year could increase nearly five-fold after Brexit - from 55 million to 255 million.

'HMRC is under considerable pressure to deliver the new Customs Declaration Service in time, but it does not yet have funding to increase the capacity of CDS to deal with the consequences of Brexit - nor to develop contingency options.

"Failure to have a viable customs system in place before the UK's planned exit from the European Union would wreak havoc for United Kingdom business, trade and our global reputation", said Meg Hillier, an MP from the main opposition Labour party who chairs the committee.

The report also said there should be a contingency plan in place in case the customs system is not ready before Britain's expected departure in March 2019.

"The Treasury needs to ensure there is funding in place to develop contingency options so that there are no barriers to continuity of service", it said.

In its report, Brexit and the future of Customs, the committee also warned that HMRC is managing an unsustainable amount of change with 15 programmes and 250 projects in its transformation portfolio.

It states: "A failed customs system could therefore 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".

Meg Hillier, the Labour chair of the committee, said HMRC should be "banging on the doors of the Treasury" in order to secure the funding it needs to get the system operational in time to deal with the change.

Despite this, top officials from the tax agency have told MPs the programme is on track and well governed, but have admitted that some risks remain that could jeopardise the already tight timetable.

HMRC started planning to replace CHIEF in 2013-14, well before the EU Referendum following changes to EU legislation which would have been costly and hard to make on CHIEF's ageing technology.

But Prime Minister Theresa May's spokesman said the customs service was "on track" to be ready in time.

It said that HMRC's latest estimate is that 132,000 traders will have to make customs declarations for the first time once the United Kingdom leaves the EU. HMRC could, for example, update regularly the information it provides to traders on its website which we have been told has not been updated significantly since 2014. "This compares to over 6,000 trusted traders in Germany".

It urged HMRC to ensure that traders are informed of the CDS timeline and progress by January 2018. However, CDS was originally created to handle 150 million declarations each year.