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HMRC builds blockchain proof of concept for UK border

HMRC‘s Mike Potter says department has built blockchain proof of concept to coordinate interventions at the border, and highlights the need for an ‘API economy’ in Whitehall

HM Revenue and Customs (HMRC) is exploring new technologies such as blockchain to make it easier for users to interact with government.

Speaking at TechUK’s PS2030 conference yesterday (14 September), interim chief digital and information officer (CDIO) Mike Potter said the government needs to respond to and take advantage of emerging technologies to improve services for citizens.  

“We have now built a proof of concept based on blockchain that demonstrates that you can actually get all of the 28 organisations that act at the border to coordinate all of their risk and intervention, so we only do it once and we do it well,” he said.

He added that users always say they want government to be joined up. “Users just simply don’t understand the machinery of government and how it works, and frankly, they don’t want to know, and they shouldn’t need to know either,” he said. “So we have to change the way that government works.”

HMRC is under significant pressure to ensure its new IT system for customs at the border is ready by the time the UK leaves the EU.

TechUK has previously encouraged HMRC to investigate how “new digital technologies such as blockchain and machine learning can play a role in delivering a world-leading, data-driven and frictionless customs system”. 

However, some fear the system may not be ready on time as it currently stands. The Institute for Government (IfG) has urged the department to simply its focus on the “basics” and leave the innovation for later.

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HMRC has also been subject to scrutiny and criticism from both the National Audit Office and the Treasury Committee over its customs digital system (CDS) implementation, which replaces the existing Customs Handling of Import and Export Freight (Chief) service.

Earlier this week, HMRC chief executive Jon Thompson told MPs the department has completed 50% of the development work on the new system, but said he could not guarantee it would be ready on time.

An API economy

HMRC has gone through significant changes in the last few years, and aims to become the most digitally advanced tax administrations anywhere in the world by 2020. It has finally extricated itself from the £800m-a-year Aspire contract and brought a number of staff in-house.

Potter said the Aspire contract “officially died on 30 June”, and the department has taken back control of its IT and future.

He added that the department now has to “transform the experience” it offers to people across the board.

“To do that, we have to fundamentally change our organisation,” he said. As well as trialling technologies such as blockchain, HMRC is committed to its work on application programming interfaces (APIs).

Aiming for a flourishing API economy

Potter said he wants a “flourishing API economy” in government to get rid of siloed behavior and ensure citizens feel like they are dealing with one entity rather than multiple ones. “We have to transform the experience we offer to people,” he said.

This spring, HMRC opened up its APIs to third-party software. However, the the most significant part of that, said Potter, is that is also means “we can expose information and share it more widely across government, which I think is going to be the most powerful catalyst for change over the coming years”.

HMRC now exposes payroll data to the Home Office, for instance. As of April, “if you have a child, we will tell other people in government,” and if you register a business, HMRC will let Companies House know, said Potter.

“This will fundamentally improve the experience,” he said. “Why can we not do that across the whole of government? Where you tell us once, and we transact as many times as we need to, but you only need to interact once.”

Potter, who has held the position as interim CDIO since Mark Dearnley’s departure in September 2016, will leave the department next month for a directorship at the Brexit-focused Future Borders programme. He will be replaced by Microsoft corporate vice-president Jacky Wright.

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