British MPs warn of 'catastrophic' customs failure after Brexit

Meg Hillier, the chairwoman of the Public Accounts Committee said HMRC was under'considerable pressure and did not have the funding to develop customs systems for Brexit or plan contingencies

Meg Hillier, the chairwoman of the Public Accounts Committee said HMRC was under'considerable pressure and did not have the funding to develop customs systems for Brexit or plan contingencies

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.

A Government spokesperson said: "The Customs Declaration Service (CDS) is on track for delivery by January 2019 and has the capacity to deal with a significant increase in customs declarations at the border".

If the CDS is "not ready in time and if there is no viable fall-back option", it would be "catastrophic", the cross-party committee concluded.

Committee chair Meg Hillier MP said: "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 worldwide reputation".

The MPs say the uncertainty surrounding the outcome of UK-EU negotiations is a complicating factor but it should not be used by HMRC to avoid taking action now.

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.

A failure to finish new customs systems by the time of Brexit in March 2019 would be "catastrophic" and leave food rotting in trucks at the border, MPs claim today.

"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 also needs to do a lot more to work with the many businesses affected.

'Much remains to be done to have an effective Customs Declaration Service in place, on time, and that traders know how to use'.

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.

HMRC maintains that the CDS programme is on track and is well governed, but it admits that major risks remain, which means that CDS might not be fully operating by the planned date of January 2019.

HMRC has highlighted four major risk areas: integrating the eight CDS system components; testing CDS to ensure it can correctly handle the potential increase to 255m declarations every year; migrating traders from the existing CHIEF service to CDS; and ensuring that users are ready to make customs declarations in the new system.

A failed customs system could lead to "massive queues at Dover", according to PAC report.

"HMRC will continue to operate the current service (CHIEF) in tandem with CDS during the transition from one system to the other".

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