HMRC puts numerous IT projects on hold to focus on Brexit

HM Revenue and Customs (HMRC) has confirmed to MPs that it will put several IT transformation programmes on hold in order to focus on Brexit preparations, such as rolling out the new customs IT system. 

According to The Times newspaper, which has seen a list of affected projects sent to MPs by HMRC, a total of 39 technology projects and changes will be paused until after the UK leaves the European Union.  

As previously reported by Computer Weekly, these projects include HMRC’s flagship Making Tax Digital project. 

In January 2018, the Public Accounts Committee (PAC) expressed concern that HMRC was dangerously overstretched by 15 major transformation programmes. The department’s chief executive, Jon Thompson, subsequently confirmed to PAC chair Meg Hillier that there would be changes to “a number of projects”, which would be either delayed or halted. 

On 30 April, Thompson told the PAC that HMRC had decided to “not make tax credits an online service if you are not a new tax credit claimant, and online personal tax accounts won’t have any new services added”, as the department had to focus on Brexit preparations.  

The list sent to MPs shows that several other elements of Making Tax Digital will also be stopped or paused, including building an automated service to replace the manual emergency tax code process, creating an online inheritance tax service, and building a new digital front-end for Tax-Free Childcare.

The website allowing parents to apply for tax-free childcare was launched in April 2017, but was then criticised when parents reported repeated technical problems on the site, including failed logins and misplaced applications. 

Other projects put on hold include plans to improve HMRC’s data-sharing capabilities, and building “a bespoke tool for research and development”. HMRC will also halt the migration of the “smaller parts” of its IT estate to a virtualised cloud service.

Much of the department’s work will now be focused on ensuring the UK is ready for new customs protocols after Brexit, including the roll-out of the Customs Declaration Service (CDS).

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 about 60 million customs declarations a year, but with Brexit looming, CDS could be required to handle up to 255 million declarations annually. 

Earlier this week, Thompson told the Treasury Committee that HMRC remains on track with CDS, and plans to complete rolling out the new system by January 2019.