Brexit Could Leave 'Food Rotting At The Border', Warn MPs

Brexit: failure to update customs system could be 'catastrophic'

And, in a report published today, it urged HMRC to step up the urgency of its conversation with the Treasury to get the £7.3m of funding needed to upgrade CHIEF to be able to deal with the potential 255m declarations that could be made each year.

Meg Hillier, the chairwoman of the committee, 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 global reputation.

In 2015, around 55 million custom declarations were made by 141,000 traders.

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.

As a member of the EU's customs union, the United Kingdom does not impose taxes or require customs declarations on goods from other member states - but as part of Brexit, ministers plan to leave the customs union and negotiate a new arrangement in its place.

The MPs said after Brexit the number of checks HM Revenue & Customs (HMRC) will have to carry out each year could increase fivefold to 255 million.

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. "With the hard deadline of Brexit, delay is not an option".

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

HMRC boss John Thompson warned MPs last month that he would need significantly more staff if Britain was to cope properly with a collapse in negotiations with Brussels over trade deals.

'Much remains to be done to have an effective Customs Declaration Service in place, on time, and that traders know how to use'. Although HMRC has engaged with some larger traders and representative groups, it only plans to start wider engagement with all traders after March 2018. There are 141,000 traders that now use the Customs Handling of Import and Export Freight system (CHIEF) but only 604 of these are "trusted traders".

It also said the government should aim to increase the number of "trusted traders" who are allowed to use simplified arrangements, which is now just 604 - a 10th of the number with such status in Germany.

'HMRC must press the case to secure this funding now and ensure that, if other plans fail, customs will be fit for objective'.

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