Post-Brexit customs system runs into trouble

05 April 2017

With a possible five-fold increase in the number of transactions requiring customs clearance following Brexit, confidence in the successful implementation of the Customs Declaration Service (CDS) has collapsed.

Scheduled to replace the existing system for handling import and export freight (CHIEF) in January 2019, the new system has gone from having a ‘green’ project status in November 2016, to ‘amber /red’ in January 2017.

Such is the concern that the new CDS system will not be successfully delivered, and on time, that the Chairman of the Treasury Select Committee has written to officials requesting an assessment of contingency plans and their adequacy.

HMRC currently handles in the region of 60 million customs declarations per year but, with almost 53 per cent of UK imports coming from within the EU, this is set to explode to almost 300 million declarations.

With businesses, consumers, and government placing a great deal of reliance on a future ‘frictionless’ movement of goods, any failings in HMRC system requirements to facilitate quick and easy customs clearance would make it extremely difficult for anyone buying or selling goods overseas, would hold up the physical movement of goods at border posts, and would result in increased lead times before delivery, including for perishable goods.

Customs, or more appropriately tariffs, have been at the centre of the Brexit debate. Notably these discussions have focused on when trade negotiations would start, or whether WTO tariffs would apply.

However, given the concerns raised about the ability of the underlying infrastructure, the alarms raised by the Treasury Select Committee must be afforded more prominence.

If, as pointed out, the system status has moved from ‘challenging but achievable’ to ‘business critical’ within weeks, it does not bode well for the future, particularly if, like many other IT projects, there’s slippage down the line.

For more information please get in touch with David Wilson, or your usual RSM contact.

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