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HMRC boss warns up to 拢450m needed to cope with 'no deal' Brexit

Jon Thompson says a failure of the new custom systems would be "catastrophic" as declarations are expected to rise five-fold.

HMRC chief executive Joe Thompson
Image: Joe Thompson said a custom systems failure would be 'catastrophic'
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Britain's tax boss has warned he needs up to 拢450m in extra funding and 5,000 extra staff to cope with a "no deal" Brexit.

Jon Thompson, the chief executive of HM Revenue and Customs (HMRC), said he would ask for "significantly" more money than already allocated to prepare for the "most extreme" divorce.

And he admitted a new customs system may not be ready by March 2019 - despite declarations expected to rise from 55 million to 255 million after Brexit.

Mr Thompson told the Public Accounts Select Committee he was "reasonably confident" the new system would be ready in time, but that there were "significant risks" and in the worst case scenario it "wouldn't be ready".

DOVER, ENGLAND - MAY 14: Container lorries from Europe leave the Port of Dover on May 14, 2003 in Dover, England. Her Majesty's customs announced today that security would be seriously upgraded to counter any terrorist attacks including the import of dirty bombs. (Photo by Hugo Philpott/Getty Images)
Image: A Labour MP said Britain could become 'a basket case'

Labour MP Shabana Mahmood told him: "If this goes wrong it would be catastrophic for Britain's global reputation.

"We would have queues at the Port of Dover, we would have rotting food and everyone would say 'Brexit has happened and Britain has become a basket case'."

Mr Thompson agreed the new system's failure would be "catastrophic" but that only £7.3m was needed to prepare the current one as a "full-blown fallback contingency".

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Image: Customs declarations are expected to rise from 55 million to 255 million

Liberal Democrat MP Layla Moran, who sits on the committee, claimed Mr Thompson's comments had "blown a hole" in claims a "no deal" divorce would be disastrous.

"HMRC is being asked to do the impossible, without sufficient time, resources or clarity over what a final outcome will look like," she said.

"Despite the glib assurances given by Tory Brexiteers, it's clearer than ever that the Government is failing to prepare properly for the extreme Brexit they have chosen."

HMRC has been given £78m of the Government's £250m Brexit warchest, which is being distributed among departments to prepare for leaving the EU.

Chancellor of the Exchequer Philip Hammond holds the budget box up to the media as he leaves 11 Downing Street on March 8, 2017 in London, England
Image: Brexiteers are awaiting Philip Hammond's Autumn budget

Former UK ambassador to the EU Sir Ivan Rogers also spoke on Wednesday, warning that a "no deal" Brexit would leave the UK with no more rights than Venezuela or Yemen in terms of EU single market access.

And he suggested the bloc was looking for a divorce bill of €50bn (£44bn).

Brexiteers are awaiting Chancellor Philip Hammond's Budget next month for signs of money being committed to plan for a "no deal" divorce.

Mr Hammond had previously said he would not spend funds "earlier than necessary just to make some point".