Stretched tax officials lean on PwC to deliver customs work

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PwC is administering Brexit-related grants on behalf of HMRC as the tax office strains to meet the deadline for a new customs arrangement.

HMRC is directing businesses who need to complete customs declarations, in preparation for the UK leaving the EU next year, to PwC for aid.

The government department offered no comment when asked if bringing in the professional services giant was in response to a resources issue. PwC also declined to comment on the arrangement.

A source inside HMRC told AccountingWEB there was an acknowledgement time is running out and resources are increasingly tight. “Sometimes we do have to ask contractors for help, and there really isn’t a lot of time left,” they said.

The UK is scheduled to leave the European Union at 11pm UK time on 29 March 2019, just 16 weeks from now. A press release was hurried out on Tuesday, stating customs intermediaries and traders completing customs declarations can now apply for grants to support training and IT.

HM Treasury and HMRC announced a one-off investment of £8m to support broker training and increased automation in September, which will help increase capacity of the sector ahead of March 2019.

“Following extensive engagement with the customs intermediaries sector, we have listened to their concerns about how they will satisfy the extra demand for customs broker services,” said financial secretary to the treasury, Mel Stride.

Businesses, based in, or with a branch in, the UK, will be able to apply for a share of £5 million to meet the costs of employee training and IT improvements. Applications will close on 5 April 2019, or earlier once all the funding is allocated. There are two grants available, and firms can apply for either, or both. HMRC and HM Treasury will have no part of the process, and firms must deal with PwC directly.

The first is a share of £2m available to fund training for intermediaries and traders completing customs declarations, or intending to complete customs declarations in the future. The grant will provide funding for up to 50% of the cost of training staff.

The second is a £3m pot available in IT funding, available to small and medium sized employers in the customs intermediaries sector currently completing customs declarations on behalf of importers and exporters.

The Public Accounts Committee (PAC), which is responsible for overseeing government expenditures, has repeatedly criticised HMRC’s delay in the preparation of a new Brexit customs system.

Despite repeated assurances from HMRC about the progress of the new Customs Declaration Service (CDS), the Revenue has since said the IT system will not be ready for exports by January 2019. Tax officers are currently testing contingency arrangements.

Earlier this year, the PAC said HMRC faces an uphill battle to deliver the system, and that UK businesses would be mired in red tape regardless the outcome of the Brexit negotiations.

In an October report, the committee revealed that bosses at the tax-collection agency were forced to make tough choices in preparation for the UK’s departure from the European Union were made, with resources split between Brexit contingencies and ongoing work.

The “daunting workload” is giving rise to risks that customs and borders IT systems will not be able to handle a no-deal scenario in March next year, while other key areas of work are being shelved.

Businesses wishing to apply for the grants can find more information here.

 

About Mark Taylor

Mark Taylor
Mark Taylor is a financial services journalist specialising in legal and regulatory compliance, white collar crime and technology.

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