Economy

Government must fund expansion of Customs system, say MPs

Government must fund expansion of Customs system, say MPs”

If Britain doesn't introduce a new customs system by the date of Brexit in 2019, there could be mass disruption for businesses and food being left to rot in trucks at the border, a report has warned.

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.

That figure could increase five-fold to 255 million following the UK's exit from the European Union, requiring the new system - the Customs Declaration Service (CDS) - to be in operation and Treasury funding secured for contingency options, according to MPs. "Confidence would collapse amid the potentially catastrophic effects".

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.

"Much remains to be done to have an effective Customs Declaration Service (CDS) in place, on time, and that traders know how to use", MPs from the House of Commons public accounts committee said in a report.

She said HMRC needed a relatively small sum to upgrade the current system but had been told by HMRC it was merely "in conversation" over upgrade costs.

It is calling on the government to increase funding to ensure that HMRC's new Customs Declaration Service (CDS) is scaled up to handling the necessary 255 million declarations before the United Kingdom leaves the European Union in 2019.

The report described the introduction of CDS as "a programme of national importance that could have a huge reputational impact for the United Kingdom if it is not delivered successfully".

It was "deeply troubling" that HMRC did not have the funding to develop customs systems for Brexit or plan contingencies.

It warned that using uncertainty over the outcome of Brexit negotiations as an excuse to hold back from action would not work.

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.

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.

In 2015, around 55 million customs declarations were made by 141,000 traders. With the hard deadline of Brexit, delay is not an option.



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