Minister says HMRC needs another 1,000 staff before transition period ends

Written by Jim Dunton and Sam Trendall on 15 October 2020 in News
News

Lord Agnew urges traders to make necessary arrangements

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HM Revenue and Customs is more than 1,000 staff short of its recruitment target to deal with new procedures that will be introduced at the end of the EU transition period in 78 days’ time.

Cabinet Office and HM Treasury minister Lord Theodore Agnew gave the figure to MPs on the Treasury Select Committee at an evidence session probing UK customs policy and preparedness for the end of the transition period on 31 December.

Over the last four years, HMRC has faced a race against time to implement a range of new IT platforms and processes to ensure that goods can continue to be imported to and exported from from the UK now it is no longer of the European Union. Chief among these is the Customs Declaration Service – an IT system that was already in the process of being implemented when the Brexit vote took place, but now requires almost five times as much capacity as was originally planned.

The Border Operating Model policy paper published by the government last week lifted the lid on a number of other digital services the tax agency has been tasked with delivering to support the post-Brexit customs environment, including the Goods Vehicle Movement Service through which firms will make pre-emptive online declarations.

Agnew told committee members he was “worried” about arrangements for goods travelling between Northern Ireland and Great Britain and a “head in the sand” stance on the part of thousands of traders who export goods to the European Union.


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But he told the session that he was “optimistic” that the activity at the main Kent ports would be comparatively light on “D-Day” for the UK’s new trading arrangements with the EU because it was the quietest time of year for goods to be shipped.

Select committee member Harriet Baldwin asked Agnew what progress HMRC was making on its recruitment target for staff to assist with the new trading landscape.

“They estimated to need just over 7,000 additional staff for 1 January. At the last count we were up to just under 6,000 – 5,800 from memory,” he said. “I’m seeing a weekly update on how the recruitment is being added to the cohort, and also how training is being progressed to make sure they are battle-ready from 1 January.” 

Agnew said the government was also bringing in “contingent labour” to manage new customs and control sites for lorries with goods destined for the EU.

“I think we’re looking for about 850 people for those, to be in place by 1 January, and I’m confident that is being managed in an orderly process, and that we will have a resource in place for D-Day,” he said.

Sophie Dean, joint director general responsible for borders and trade at HMRC, told MPs that Border Force was recruiting more than 1,000 full-time equivalent staff in the current financial year to deliver the nation’s post-Brexit customs arrangements. 

“Of that, they are on track to have 670 in place for January with the remainder for July,” Dean said. “This is on top of 900 they recruited last financial year – 300 for their ‘mobile readiness unit’ and 600 for their customs-compliance work.” 

Agnew told MPs he was worried about the post-Brexit preparedness of businesses in Northern Ireland and that only around one in five had registered with the Trader Support Service being set up to assist firms with the movement of goods between Great Britain and Northern Ireland.

“One could not be anything other than worried about it,” he said. “But we have been very consistent in our commitment that there won’t be checks at the border and we just need to be as ready as we can.”

Last month a consortium, headed by IT vendor Fujitsu was awarded a £200m contract to deliver TSS.

“We’ve got to get the TSS up and running as quickly as we can. We’ve already had some 2,000 traders in Northern Ireland register with it for information and advice,” Agnew said. “That is going up literally on a daily basis. We reckon we have a community of about 10,000 traders that we need to get to in time for D-Day.”

Agnew said he was “reasonably confident” that the remainder of the target businesses would get signed up in time, but admitted that timing was “very, very tight”. He added that in a “perfect world” TSS would have been stood up earlier.

Head-in-sand traders
MPs were told that around 40,000 UK businesses known to trade with customers in European Union member states had yet to apply for an EU EORI number, which will be required for online customs declarations from 1 January 2021.

“There has been a ‘head in the sand’ approach by traders, which has been compounded by the – what I would call – quadruple whammy of two false alarms, two extensions at the very last minute, followed by Covid and now followed by the recession,” Agnew said. “So, the traders are not as ready as they should be.

“The pieces of the jigsaw are coming together, but there does seem to be a lack of urgency on the part of too many traders.”

HMRC joint director general responsible for borders and trade Katherine Green told MPs that 250,000 businesses would need an EORI number to continue trading with the European Union from January, but that only 210,000 had so far taken steps to get one. 

 

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