LONDON: The UK risks not having an upgraded customs system in place to collect over £34 billion in trading taxes when Brexit takes place, according to warnings from the National Audit Office (NAO). The current 20 year old customs system, known as CHIEF (Customs Handling of Import and Export Freight), is being replaced following changes to European Union legislation which would be problematic to manage using the ageing technology in place. The new Customs Declaration Service (CDS) is one of 15 major programmes in HMRC’s (Her Majesty’s Revenue and Customs) wider transformation portfolio. It will use commercially available software from IBM and European Dynamics to manage customs declarations and calculate tariffs.
HMRC started the programme before the UK voted to leave the EU in June 2016, and before the government committed to seeking a new customs arrangement from March 2019. The new system was originally intended to be in place this year, but as well as the Brexit vote, the implementation was delayed by HMRC deciding to change the system’s main database, choosing a database that was consistent with HMRC’s strategic direction to consolidate databases onto a single technology. It also dropped its first choice of software supplier amid security concerns. Having a robust working system in place is essential to the UK economy. CHIEF collects around £34 billion in tax and duty on imports from countries outside the EU each year. In 2015-16, it processed around 55 million import and export customs declarations. In 2015 nearly £700 billion of goods crossed the border.
