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HM Revenue & Customs (HMRC) will begin phasing in a replacement customs IT system in August, while running the old system alongside it.
The Customs Declaration Service (CDS) is intended to replace the current Customs Handling of Import and Export Freight (Chief) system for handling import and export freight from outside the European Union (EU).
The roll-out of the system will begin in August, and will be fully rolled out by early 2019, according to HMRC. The Chief system will continue to run alongside CDS “to aid the transition”, but by early 2019, “all declarations” will take place on CDS, it said.
HMRC already had plans to replace the 25-year-old Chief system when the country voted to leave the EU. However, with Brexit approaching, CDS has become an increasingly important part of the UK’s ability to handle the huge increase in customs transactions expected once the UK leaves the EU Customs Union.
Concerns have been mounting that the system won’t be ready for, or able to cope with, the volume of transactions needed when the UK leaves the EU.
In March 2017, the Treasury Committee said it had lost confidence in the successful implementation of CDS, and in July 2017, the National Audit Office warned there was “still a significant amount of work to complete”, which meant CDS might not be ready in time.
In September 2017, however, the project reached the halfway point after having made significant progress.
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Despite this, HMRC CEO Jon Thompson said there were “no guarantees” the system would be ready in time for Brexit.
There are big differences between the old and the new systems. Chief has never handled more than around 60 million transactions a year, while the maximum number of customs declarations CDS would have to handle after Brexit is estimated to be 255 million a year, based on current volumes of trade.
The new system will also offer traders the ability to view previous import and export data, check tariffs and apply for new authorisations.
HMRC is still planning for contingencies, including upgrading the current Chief system, should something go wrong.
The department has estimated the CDS program will cost £157m. However, this figure does not include costs to upgrade the Chief system, and Thompson told the Public Accounts Committee last year that an extra £7.3m would be needed for this.