HMRC hires 3,000 extra staff to handle Brexit customs

HMRC is hiring significant numbers of staff and is one of 25 government departments to share in an additional £2bn of funding allocated for Brexit preparation for all scenarios, while the UK’s five main business group have released a letter expressing ‘horror’ at the lack of practical action

The five biggest Brexit preparation allocations are for the Home Office (£480m), the Department for Environment, Food and Rural Affairs (Defra) (£410m), HMRC (£375m), the Department for Business, Energy and Industrial Strategy (BEIS) (£190m) and the Department for International Trade (£128m).

HMRC will use its share to employ over 3,000 additional customer service and compliance staff in operational roles to handle increases in customs activity, ensuring trade continues to flow and revenue is protected. HMRC will also use its funding to deliver new technology and IT requirements at the border to ensure trade is as frictionless as possible.

All the funding covers 2019-20, and is for core Brexit activity including deal and no deal preparations. It follows an earlier £1.5bn allocated at Spring statement for the 2018-19 year.

Meanwhile five business groups - the CBI, Institute of Directors, British Chambers of Commerce, Federation of Small Businesses and manufacturers’ organisation EEF - have released a joint letter urging MPs to act to avoid a no deal Brexit in the interests of the economy.

The department is in the throes of updating its customs handling of import and export freight (CHIEF) system with a new customs declaration service (CDS). HMRC CEO Jon Thompson created a stir last year when he told a public accounts committee session that HMRC estimates suggested the department would need up to £450m in additional funding and between 3000 and 5000 staff to deal with Brexit if there was a no deal scenario.

The letter states: ‘Businesses have been watching in horror as politicians have focused on factional disputes rather than practical steps that business needs to move forward. The lack of progress in Westminster means that the risk of a no deal Brexit is rising.

‘Businesses of all sizes are reaching the point of no return, with many now putting in place contingency plans that are a significant drain of time and money. Firms are pausing or diverting investment that should be boosting productivity, innovation, jobs and pay, into stockpiling goods or materials, diverting cross border trade and moving offices, factories and therefore jobs and tax revenues out of the UK.

‘While many companies are actively preparing for a no deal scenario, there are also hundreds of thousands who have yet to start - and cannot be expected to be ready in such a short space of time.’

The business groups say that with just 100 days to go, ‘the suggestion that no-deal can be “managed” is not a credible proposition’, pointing out that businesses would face ‘massive’ new customs costs and tariffs.

The letter states: ‘As a result of the lack of progress, the government is understandably now in a place where it must step up no deal planning, but it is clear there is simply not enough time to prevent severe dislocation and disruption in just 100 days.

‘This is not where we should be.’

Business group letter is here

Report by Pat Sweet

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