POLITICS

HMRC Warns It Needs An Extra £450million To Prepare For 'No Deal' Brexit

The tax office will also needed 5,000 more staff

25/10/2017 16:54 BST | Updated 25/10/2017 17:47 BST
Parliament
HMRC chief executive Jon Thompson

A £450million warchest public cash is needed to prepare the taxman for a ‘no deal’ Brexit, HMRC’s chief warned today.

Jon Thompson, the department’s chief executive, told MPs there would also need to be a mass recruitment of up to 5,000 new members of staff to help run the UK’s new customs and tax arrangement with the EU.

Giving evidence in Parliament this afternoon, Thompson repeatedly refused to guarantee that a new customs system would be ready for when the UK leaves the EU in March 2019, warning that all new computer systems run the risk of failure.

Officials from HRMC also told the Public Accounts Committee they did not know how much extra money they needed to upgrade the current customs system to act as a back-up should the new infrastructure fail.

Asked how much additional funding his department would need to prepare for a ‘no deal’ outcome of the Brexit talks, Thompson said: “It will be several hundred million pounds if we are implementing the option of the United Kingdom leaving the European Union with no ongoing special relationship in April 2019.

“That’s the most extreme version of leaving the European Union. In that scenario you are looking at an estimate of between £300-450million.”

When asked how many extra staff, he replied: “Our estimate is between 3,000 and 5,000 additional staff would need to be recruited.”

Liberal Democrat MP Layla Moran, who sits on the Public Accounts Committee, commented: “This blows a hole in claims that we can crash out of Europe with no deal without disastrous consequences for the economy.

“HMRC is being asked to do the impossible, without sufficient time, resources or clarity over what a final outcome will look like.

“Despite the glib assurances given by Tory Brexiteers, it’s clearer than ever that the government is failing to prepare properly for the extreme Brexit they have chosen.

“It is people across the country who will pay the price for customs chaos after Brexit, with gridlock at our ports and roads and prices in the shops going up.”

The UK currently processes around 55million customs transactions each year. 

Yet once Britain leaves the EU’s customs union this figure is expected to rise to 255million.

Labour MP Stephen Doughty MP, supporter of the anti-Brexit group Open Britain, said: “A no deal Brexit risks plunging our customs system into chaos, with queues of lorries backing up at our ports, bureaucratic chaos for British businesses and a hard border in Northern Ireland. It is painfully clear that HMRC lacks the time and resources to ready itself for this awful scenario.

“By threatening no deal, we are aiming a loaded gun at our own foot. The Government is already spending millions on preparations which not only will fail to get the job done, but which could be far better spent on our hard-pressed National Health Service.

“It’s high time the Government accepted that leaving the EU without an agreement would be an expensive disaster, and dropped their no deal threat.”