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Officials hit back as Chancellor orders HMRC to ramp up no-deal preparation

Sajid Javid has issued a set of instructions to HM Revenue and Customs boss Sir Jon Thompson.

Chancellor Sajid Javid (Aaron Chown/PA)
Chancellor Sajid Javid (Aaron Chown/PA)

Ministers should stop trying to blame officials for a lack of progress in Brexit preparation, a union has said after the Chancellor ordered HM Revenue and Customs to make no-deal planning its “absolute top priority”.

Sajid Javid wrote to HMRC chief executive Sir Jon Thompson, demanding action to support businesses and taxpayers and ensure staff and systems are in place to “deliver a functioning regime” on Brexit day.

Sir Jon, who is due to stand down in the autumn, has earned a reputation for publicly spelling out the challenges posed by a no-deal scenario and has received death threats for “speaking truth unto power about Brexit”.

In an indication of tensions about HMRC’s attitude, Treasury sources said the letter from Mr Javid was an instruction to “Whitehall’s unruliest department” to prepare for no-deal.

HMRC defended its work and the FDA, the union representing senior officials in the department, pinned the blame on ministers for a lack of strategy.

Rather than looking to blame (civil servants) for a lack of progress, perhaps ministers should look to themselves for the major stumbling block: a lack of ministerial strategy or direction Jawad Raza, FDA

Jawad Raza, the FDA national officer representing HMRC, said: “If, as reported, the Chancellor wants preparation for a no-deal Brexit to be the number one priority in HMRC, he needs to ensure that this commitment can be backed up by adequate resource.

“Brexit planning remains a key priority for HMRC but the department still needs to carry out its vital day-to-day duties of collecting tax revenues, cutting tax avoidance and evasion, enforcement and customer compliance programmes, all whilst providing advice and support to businesses.

“Civil servants in HMRC have been putting a number of options forward for Brexit planning over the past three years; more than 5,000 of them have been tasked to work on preparation for our EU exit, working long, unsocial hours with no additional reward.

“Rather than looking to blame them for a lack of progress, perhaps ministers should look to themselves for the major stumbling block: a lack of ministerial strategy or direction.”

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HMRC chief executive Sir Jon Thompson (PA)

In the letter to Sir Jon, seen by PA, Mr Javid said: “HMRC must make no-deal preparation their absolute top priority as the UK prepares to exit the European Union on 31st October 2019, with or without a deal.”

He said the department must deliver “critical internal systems and staffing” to function on October 31, including the 5,000-plus additional staff required to support and handle the increase in businesses making customs declarations.

HMRC should work across Whitehall to set out an “ambitious” central helpline to support firms with concerns about October 31 and contact traders likely to be affected who have not yet signed up for an economic operator registration and identification (EORI) number needed to export to the EU.

Mr Javid said customs officials must work with counterparts from the Treasury, Home Office, Department for Environment, Food and Rural Affairs, and Border Force to deliver the “necessary changes to customs, tax and welfare arrangements in order to ensure a smooth exit and transition”.

In his instructions to Sir Jon, Mr Javid said he expected to receive “weekly delivery-focused updates from HMRC to ensure progress remains on track” in the run-up to October 31.

The Chancellor believes everyone in the Government must be prepared for a no-deal exit, including every arm of the Treasury.

He thinks HMRC has the “levers to speak to hundreds of thousands of businesses” and wants to ensure they are “more than adequately supported”, a Treasury source said.

It is the latest sign of Mr Javid’s intention to mark a new era at the Treasury after taking over as Chancellor from Philip Hammond, who remains strongly opposed to a no-deal Brexit.

Sir Jon’s frequent appearances in front of Commons select committees have seen him highlight some of the difficulties faced by his officials over Brexit.

In November last year, he told MPs that “the date for putting in an optimal customs system for the UK in the event of no deal was passed months ago”.

A Government spokesman, in a statement on behalf of the HMRC, said: “HMRC has been preparing for Brexit every day since the referendum. The department has led hundreds of meetings with industry representatives, hired over 5,000 staff specifically to support Brexit, communicated with thousands of businesses and stakeholders as well as publishing clear guidance on how to prepare.

“HMRC has a system ready to handle customs declarations after Brexit, is rolling out a new Customs Declaration Service alongside this, and has delivered new processes at the UK’s borders. We’ve updated Parliament on our progress regularly and continue to prioritise preparing the UK for leaving the EU on 31 October.”

PA

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