The chair of the public accounts committee (PAC), Meg Hillier, has expressed doubts in a letter to HMRC chief executive, Jon Thompson, about his assurances that a ‘no deal’ Brexit poses no significant risk to tax revenues or compliance, despite delays with the customs declaration service (CDS).
The letter sets out the PAC’s findings on the CDS, following the evidence session before the committee in September on HMRC’s 2017/18 performance. The committee was ‘disappointed’ to learn that the CDS will not be ready for exports by January 2019, requiring an extended period of dual running with the CHIEF system. HMRC has now begun testing its contingency arrangements.
The committee is particularly concerned about HMRC’s lack of progress in providing small traders with information and advice on making customs declarations in the event of leaving the EU with no deal. HMRC estimates there are around 100,000 such small businesses with whom it has no direct contact.
The government’s announcement of postponed accounting for import VAT in the event of no deal will require further changes to HMRC’s systems by March 2019. This will mean diverting much-needed resources from the CDS. The PAC regarded the move to postponed accounting as foreseeable and something for which HMRC should have been better prepared.
The PAC will publish a formal report in due course, giving its overall conclusions and recommendations on HMRC’s performance.
In a separate letter, the PAC chair reminded HMRC not to lose sight of the importance of continuing to tackle online VAT fraud, ‘which remains a real threat to British business’. HMRC is due to provide the committee with a full progress report in March 2019.
The chair of the public accounts committee (PAC), Meg Hillier, has expressed doubts in a letter to HMRC chief executive, Jon Thompson, about his assurances that a ‘no deal’ Brexit poses no significant risk to tax revenues or compliance, despite delays with the customs declaration service (CDS).
The letter sets out the PAC’s findings on the CDS, following the evidence session before the committee in September on HMRC’s 2017/18 performance. The committee was ‘disappointed’ to learn that the CDS will not be ready for exports by January 2019, requiring an extended period of dual running with the CHIEF system. HMRC has now begun testing its contingency arrangements.
The committee is particularly concerned about HMRC’s lack of progress in providing small traders with information and advice on making customs declarations in the event of leaving the EU with no deal. HMRC estimates there are around 100,000 such small businesses with whom it has no direct contact.
The government’s announcement of postponed accounting for import VAT in the event of no deal will require further changes to HMRC’s systems by March 2019. This will mean diverting much-needed resources from the CDS. The PAC regarded the move to postponed accounting as foreseeable and something for which HMRC should have been better prepared.
The PAC will publish a formal report in due course, giving its overall conclusions and recommendations on HMRC’s performance.
In a separate letter, the PAC chair reminded HMRC not to lose sight of the importance of continuing to tackle online VAT fraud, ‘which remains a real threat to British business’. HMRC is due to provide the committee with a full progress report in March 2019.
.tmb-editorspic.jpg?sfvrsn=df04ab27_1)
