The chief executive of HMRC has revealed that the organisation is to undertake a full review of its reform plans to reassess how many of its proposed changes, including a wide-ranging programme of office closures and moves to digitise tax collection, can be completed alongside Brexit.
Speaking to MPs on the Public Accounts Committee about the future of customs following the UK’s departure from the European Union, Jon Thompson said that it was “not credible” to continue with its current range of activities alongside work related to leaving the bloc.
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He said that there are currently 250 programmes of organisational change across HMRC.
“If you think of HMRC from my perspective, you have this huge delivery organisation, you have the biggest organisational transformation in Europe, you’ve got leaving the European Union and then chancellors continue to have fiscal events that give us policy changes.
“The question for us is can your organisation continue to do all of that or do we not need to do a full reprioritisation for the organisation? And the answer to that is yes [we need to reprioritise].
“We plan to do that in quarter four, which is between Christmas and the end of the financial year, and give that back to minsters because I do not believe it possible to take 250 existing programmes of change and simply add Brexit on. I think you reach the point of organisational capacity and capacity.”
Thompson did not provide further details on which programmes would form part of the review, but HMRC is undertaking a number of reforms including the Making Tax Digital programme to move more taxation transactions online, moving staff into regional hubs as part of an office closure programme and working to close the tax gap of unclaimed revenue.
Thompson also told the committee that HMRC may need to employ up to 5,000 extra staff if Britain crashes out the EU without a deal
He said that although the department currently has enough money after it was given £250m to prepare for the policy implications of Brexit, it would have to ask for “significantly more” next year.
And if the UK left the EU without a deal to agree future customs and trade relationships, it could need as much as £450m extra to boost its capacity.
“It will be several hundred million pounds if we are implementing the option of the United Kingdom leaving the European Union with no ongoing special relationship in April 2019,” he said.
“In that scenario you are looking at an estimate of between £300-450m."
Thompson told MPs that HMRC had already hired 250 additional staff to the “huge amount of policy work” related to Brexit.
“We have recruited 250 additional staff to work on those and you have seen some of the products on that in the white paper relating to customs bill.”