Jon Thomson, Chief Exec of HMRC and Paul Lincoln , Director of UK Border Force recently appeared at the House of Commons Public Accounts Committee to give evidence on preparations for Brexit specific to UK borders.
The Public Accounts Committee is now routinely a place to hear first hand, unfiltered, more detail on what HMRC and others are doing to prepare for Brexit. Here is the summary on the Customs side (we have omitted the immigration aspect).
We listened and read through it so you don’t have to !
- Complexity at the border. Witnesses made clear that the border is a complex system managed by a multitude of agencies. Border Force are one of the primary providers of services to a range of “clients” including HMRC, security services, DEFRA. Border Force has 5 mandates: control of prioritisation at the border, operations (primarily immigration), Cyclamen (chemical,bio,radiation protection), revenue, and SLAs with port operators.
- The Border Planning Group is co-chaired by the Home Office and HMRC embracing 21 government departments. It manages strategic oversight of the impact of Brexit on UK Borders. Jon Thomson said that he believes the group has a “decent assessment…of how the border may work in 2019”
- CDS – the CHIEF replacement – HMRC have still not been given the green light from the Treasury for funding to keep CHIEF running, however Jon Thomson said that he will spend the money anyway and argue about an overspend later if necessary.
- Systems at the border – there are 85 systems (34 owned by Customs) at the border ,of which 30 need changes to respond to Brexit. Changes will be made incrementally.
- More data – The Home Office see a need for more trader data on freight and Border Force need systems (such as Advanced Freight Targeting system) to use what they already have. HMRC are concerned about the amount of detailed data they receive for shipments example showing agents as the shippers and/or recipients.
- Communication with importers and exporters – the committee previously took evidence from the North East Chamber of Commerce suggesting traders do not take Customs compliance seriously. HMRC said there is definitely a need to communicate with traders about changes however the decision about which part of government should do that, how and when is still being considered by ministers.
- HMRC staffing for Brexit – 3000-5000 additional HMRC staff are required to cope with Brexit based on risks HMRC have mapped. A decision on recruitment needs to be made in Spring 2018 in order to have those staff functional by April 2019. Ministers need to decide the extent of risks they wish to take to refine that staff requirement. Border Force need 300 extra and recruitment is underway already. These are on top of routine staff turnover.
- No additional border checks – The Home Office do not see the need for additional numbers of checks post-Brexit at channel ports as the assumption is on day 1 there is no additional risk. Checks will remain intelligence-led. For container ports then the checks will be done as today however there is space to scale them up accordingly in these locations. Depending on the Brexit deal the focus towards revenue collection could shift and that scenario is included in the 3-5000 additional HMRC staff requried. The assumption is (by Home Office) no increase in 3rd country freight on day 1 of Brexit, or composition of the split between former Eu/3rd country.
- Calais – Jon Thomson underlined the point that despite UK Government best contingency plans there is a risk related to preparedness on the EU mainland.
- Other supply chain stakeholders – HMRC have conducted work on “Mode-Place-Flow” to consider what happens at the border port by port and by mode, recognising differing sectors and ports have different operations profiles. He said parcel flow has been considered at length as have a range of different scenarios and there will be engagement with logistics companies,forwarders and traders. An all-ports group has been set up to coordinate work on port specific assessments and contingencies and will report by March 2018.
- Inland controls – government departments will not know their physical infrastructure requirements until Spring 2018. Where possible additional facilities will be built inland particularly where space at the port is constrained. None of that infrastructure will be ready for Brexit day 1
- HMRC project priorities – HMRC have 267 projects ongoing at present. To cope with Brexit they will have to be prioritised, the methodology for this prioritisation has not yet been determined. Decisions on what stops or is slowed down will be made in Q1 2018.
It seems that despite the media portrayal and David Davis’s recent revelations about the lack of impact assessments, preparation and analysis of trade and government needs at the border is well under way. It is clear that plans are evolving for April 2019 however infrastructure and systems will not be in it’s end state for a considerable time after the UK leaves the EU.
The Public Accounts Committee will publish their findings in January 2018. The full evidence heard at this session can be read at: https://goo.gl/SzLMNv
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