Minister reveals that work is ‘deferred’ until after the UK leaves the EU

Despite a successful proof-of-concept exercise, HM Revenue and Customs has suspended work to deploy blockchain technology at the UK border until after the country’s exit from the European Union has been completed.

Last year, HMRC conducted a six-week exploration of how blockchain could be deployed at the UK border to help organisations coordinate activities and share information during customs processes. A written parliamentary statement from financial secretary to the Treasury Mel Stride revealed that trials had demonstrated the technology’s effectiveness.

“The pilot focussed on building a single ‘permissioned’ blockchain that could be used to inform a trader’s Authorised Economic Operator status,” he said. The proof of concept ran for six weeks, and established that government could use blockchain to securely share the results of sensitive risk checks to improve the efficiencies of certain customs processes.”

Stride added that HMRC is “working with the cross-government Future Borders Programme to progress the pilot”. 

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But implementing blockchain at scale “would require significant further work by HMRC”. With the pressing issue of Brexit taking up the department’s time, work is on hiatus until after the UK has completed its departure from the European Union. 

“Further work on the application of Blockchain to Authorised Economic Operator status is deferred until after the UK leaves the EU, when timescales and cost will be revisited,” Stride said.

HMRC’s work to deliver a new customs IT system has come under strong scrutiny in the last two years. The parliamentary Public Accounts Committee has repeatedly voiced fears that the system – which will need to handle five times as many declarations once the UK is no longer part of the EU – will not be ready in time for Brexit.

Shortly before Christmas, HMRC received £375m in additional government funding to support its Brexit preparations.