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HM Revenue and Customs (HMRC) will begin the first of three roll-out stages of its new customs IT system in August 2018, CEO Jon Thompson has confirmed.
The department’s CEO and permanent secretary told MPs on the Treasury Committee that implementation plan for the Customs Declaration Service (CDS) “has been reviewed 15 times and remains on track”.
There has been scepticism around the department’s ability to ensure the system will be ready in time for the UK leaving the EU in March 2019, but despite this, Thompson assured the committee it would be ready well before the deadline.
“We begin the roll out in August,” he said. “We consulted heavily with industry about how to roll that out for traders, and it will be done in three tranches to de-risk it. Some is in August, some is in November and the final element is in December.”
“We believe we’re on track to have a fully functioning customs declaration service by January 2019.”
The 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 EU.
Chief, which has been in place for 25 years, can only handle around 60 million customs declarations per year, but with Brexit looming, CDS could be required to handle volumes of up to 255 million declarations annually.
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Thompson said that while CDS is being rolled out, HMRC is “scaling up the Chief system” to have a “full contingency” in place should something happen.
The HMRC boss was also questioned on the government’s plans for leaving the customs union, particularly on the “maximum facilitation” – or “max fac” – customs union proposal preferred by the government’s Brexiteers.
The “max fac” proposal is for a technology-based system, where so-called “trusted traders” can cross both the Northern Ireland border – as well as other EU borders – freely, minimising exit checks.
However, Thompson said it could cost British businesses an average of £32.50 per customs declaration under the “max-fac” arrangement. “You need to think about the highly streamlined customs arrangement costing businesses somewhere in the late teens of billions of pounds – somewhere between £17bn and £20bn,” he said.
The other option being proposed is a “customs partnership” between the EU and UK, which would remove the need for customs checks at the border.
Border technology is one of the main stumbling blocks when it comes to Brexit IT. In March, the Northern Ireland Affairs Committee’s report on Brexit concluded there is no current border technology that could avoid physical infrastructure at the UK-Ireland border.
It said that although the government claims technology can solve the border problem, it has found no evidence that this is the case.
In December 2018, a different report, this time by the Public Accounts Committee (PAC), found that out of the 85 IT systems at the UK border, 30 would need to be replaced or changed due to Brexit, but some of them would simply not be ready on time.