MPs warn of Brexit customs 'catastrophe'

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It would be “catastrophic” if the UK’s customs system is not improved in time for Brexit, MPs say.

The Public Accounts Committee warned of “huge disruption” to businesses, “massive queues” at Dover port and food rotting in lorries at the border.

It said the move to a new system – which was planned before the EU referendum – could have a “huge” impact on the UK’s reputation if done badly.

The government said the project was on track to be delivered in January 2019.

This is two months before the UK is scheduled to leave the EU, which is expected to lead to a surge in customs declarations at the border.

The committee’s report urged the government to commit the “relatively small” sum of £7.3m to upgrade the existing system to cope with this increase if the move to the Customs Declaration Service (CDS) was delayed.

Goods pass through UK customs whenever businesses import them into, or export them out of, the UK.

At this point, depending on the nature of the goods, taxes and duties may be payable.

As a member of the EU’s customs union, the UK does not impose taxes or require customs declarations on goods from other member states – but as part of Brexit, ministers plan to leave the customs union and negotiate a new arrangement in its place.

The move to the updated CDS system was planned before the UK voted to leave the EU, and following the referendum result, its completion date was brought forward to January 2019.

It is estimated that the number of customs declarations for Revenue & Customs (HMRC) to process each year will increase fivefold to 255 million after Brexit, with 132,000 traders required to use the system for the first time.

The committee said: “A failed customs system could therefore lead to huge disruption for businesses, with delays potentially causing massive queues at Dover and resulting in food being left to rot in trucks at the border.

“This is a programme of national importance that could have a huge reputational impact for the UK if it is not delivered successfully.”


Negotiations to replace the UK’s customs union and single market membership have not yet started, with agreement not yet reached in the initial phase of talks.

The committee said HMRC should begin talking to traders immediately, rather than waiting until a new arrangement was agreed.

It also said the government should aim to increase the number of “trusted traders” who are allowed to use simplified arrangements, which is currently just 604 – a 10th of the number with such status in Germany.

The committee also warned that HMRC was currently managing an “unsustainable” number of reform projects, which could risk the delivery of the CDS system, saying it urgently needed to “prioritise and make difficult decisions”.

“HMRC and wider government need to make CDS one of their top priorities to ensure successful delivery,” it said.

“The UK cannot afford for this to go wrong.”

A government spokesman said the CDS would be able to cope with a “significant increase” in customs declarations at the UK’s border.

“We’ve already allocated over £0.5bn in funding to ensure a successful exit from the EU, and we will have a fully functioning UK customs service on day one post-Brexit,” he said.

During the transition between the two systems, the old version would operate in tandem with the new one, he added.

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