Danny McCance 13 Jul 2017 12:28pm

Brexit plans could collapse "like a chocolate orange"

Amyas Morse, head of the National Audit Office (NAO) made the statement as he warned that ministers are not unified and lack "flexibility" over plans for controlling the flow of goods in the UK and collecting tax and duties

He also said that Brexit will put the entire customs system under immense strain.

A report from the NAO, the government spending watchdog, yesterday predicted that the number of customs declarations in the UK could rise from its current rate off 55 million to 255 million a year – the figure is dependent upon negotiations.

In 2015, nearly £700bn in goods crossed the UK border, generating £34bn in tax.

The legacy CHIEF system, in place for 20 years, can handle a maximum of 100 million customs declarations.

In 2013 – 2014 the NAO began enacting plans to replace the system with the new Customs Declaration Service (CDS) to meet legislative demands – prior to the UK’s decision to leave the EU.

The CDS is supposed to become operation in January 2019.

The report suggest that despite the amount of work already done, there are already fears that the system will not be operational before the UK's March 2019 Brexit deadline.

“HMRC has made progress in developing the new customs system, which was part of its existing programme, but it may need to be ready much earlier than originally planned if there is no agreement extending timescales on the transition to any new customs arrangements,” Morris said.

“Customs problems have obvious implications for the flow of goods in and out of the UK, so government as a whole needs to decide whether the extra cost and effort of getting a working system in place for day one is an insurance premium worth paying,” he added.

Among the barriers to completion the report highlighted uncertainty over negotiations, challenges in integrating new technologies, difficulties in engaging with stakeholders, lack of a detailed transition plan and staffing issues.

There is also the additional issue of the cost burden, which may run higher that the originally proposed business case total of £157m for the project.

Despite this HMRC remains confident. “The CDS is on track for delivery by January 2019 and will support international trade once the UK leaves the European Union,” an HMRC spokesperson said.

“We took the decision to bring in a new declaration system before the EU referendum, but the service remains fully capable of dealing with how the UK’s exit from the EU will impact on customs declarations at the border.”