A crucial part of HM Revenue & Customs (HMRC)’s IT system that will monitor import and export goods after Brexit, will not be ready to operate independently of the system it is been designed to replace, MPs warned this week.
These are the findings expressed by Public Accounts Committee Chairman, MP Meg Hillier, who in an open letter to Jon Thompson, the permanent secretary at HMRC, was highly critical of their readiness for the UK’s departure from the EU.
In her letter to Mr Thompson she stated that: “We are disappointed that despite your previous and repeated assurances about the progress of the CDS there has yet again been a slip in the timing just weeks after we last took evidence on the subject.”
What is the CDS?
The Customs Declaration Service (CDS) is due to replace the current Customs Handling of Import and Export Freight (CHIEF) systems by March 2019. Users will need to authorise their software providers to make declarations on their behalf – working with HMRC to understand the technical requirements for the new system.
While giving evidence to the PAC in September Mr Thompson told the committee that a fully functioning CDS would not be delivered by January 2019 and as a consequence it would have to run in tandem with the CHIEF system for longer than expected.
Brexit IT System
A second key issue raised in the letter is the PAC’s findings that the HMRC did not appear to be in clear communication with business that may need to start making customs declarations in the event of a no-deal Brexit.
In her letter MP Hillier also expressed that she was: “Concerned and disappointed that nearly two months on you have made little progress. You gave us no assurance that HMRC has a plan to ensure that businesses are aware of what they will need to do. We are particularly concerned about the 100,000 small traders that HMRC can not engage directly with, as you do not know who they are.”
In an emailed statement to Computer Business Review on Brexit IT system readiness, an HMRC spokesperson said: “HMRC has well-developed plans to ensure that there will be a functioning customs, VAT and excise system in the unlikely event of a no deal.”
“We have always said the timeline for implementing the Customs Declaration Service is tight, but that we would operate the current system (CHIEF) in tandem throughout the transition. We have made good progress to ensure that the UK has a customs system capable of handling any potential volume of customs declarations after March 2019.”
With regards to the lines of communications between the HMRC and business that may need to declare post-Brexit they commented that: “We have engaged with business representative bodies who will be key partners in reaching businesses to ensure that they understand any implications for them.”