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HMRC faces ‘daunting task’ says Commons committee

[ November 2, 2018   //   ]

HM Revenue & Customs (HMRC) faces a daunting task in preparing for the UK’s exit from the European Union, which could also hamper its ability to tackle tax fraud, said the House of Commons Public Accounts committee in a report published on 2 November.

It said that HMRC was being forced to reprioritise resources to post-Brexit customs and borders issues, which was hindering its ability to deal with the estimated £1.3 billion currently being lost to fraud and errors in the Tax Credit system, it said. HMRC expects overpayments to increase and that it will exceed its target to keep error and fraud below 5% of Tax Credit payments.

The Committee also remains worried about the risks to customs and borders post Brexit and has written separately to HMRC to emphasise its continued concerns.

Other issues, said the report, are the recently announced further delay to HMRC’s new Customs Declaration Service (see separate story) means that it is very unlikely to be ready for exporters by the time of Brexit, and the need for further development of HMRC’s systems so that they can handle postponed accounting for import VAT in the event of a no deal Brexit by March 2019.

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