back to article UK.gov's no-deal plans leave HMRC customs, VAT systems scrambling to keep up

The government's no-deal Brexit scenario has thrown another technical spanner into HMRC's works, as bosses admitted delivering the plan would put a strain on its other work. A fully functional, optimal system will not be in place on 1 April 2019 – HMRC bosses At the same time, the final release of the new Customs …

  1. A K Stiles

    I swear if the UK were a company and the board were acting / making decisions the way the government are, they'd have been sacked by the shareholders or the administrators would have been called in by now...

    1. Solarflare

      Forget administrators, there'd be criminal proceedings...

      1. Doctor Syntax Silver badge

        "Forget administrators, there'd be criminal proceedings."

        That's how things used to be. These days they'd just be thinking about parting company with the CEO, along with a nice amount of cash upwards of £1m.

      2. Anonymous Coward
        Anonymous Coward

        >Forget administrators, there'd be criminal proceedings...

        Arguably, given her speech just before the referendum, Mrs May (and her cabinet colleagues) could spend some time in the next few years preparing her defence for a charge of "Misconduct in a Public Office". If the outcome is shown to have a negative effect on the country. This will be made worse if her, or her husband, can be shown to have benefited financially from it.

        Hiding behind "Its the will of the people", is not be a valid defence when it gets to court - especially when she argued publicly that it would be a mistake beforehand.

    2. Velv Silver badge
      Mushroom

      Lets not forget the shareholders are mostly idiots. That’s why we’re looking down the barrel of this Brexit disaster

      1. Anonymous Coward
        Anonymous Coward

        That’s why we’re looking down the barrel of this Brexit disaster

        If you're the one looking down the barrel, it's hard to argue that someone else is the idiot...

    3. Anonymous Coward
      Anonymous Coward

      Speaking of Corporations versus Governments

      HMRC is being pushed to go after 'Online traders that use marketplaces like Amazon and eBay' and are 'possibly' robbing the UK of up to 1.5 Billion. WTF??? What about the free ride the tech giants usually get? How many more Billions would that bring in???! Govt always reward special interests and those who don't deserve it, but always ruthlessly and efficiently screw over the little guy...

    4. Roland6 Silver badge
      Pint

      >I swear if the UK were a company and the board were acting / making decisions the way the government are...

      Westminster MP's would be saying the board members were incompetent and calling on shareholders to sack them...

  2. Anonymous Coward
    Anonymous Coward

    A total waste of effort to support a transparent bluff

    It is obvious to the EU that May will never risk destroying Britain with a No Deal Brexit, and it is an outrage to rank with Brexit itself that we are wasting all this money on supporting her bluff.

    1. Dan 55 Silver badge

      Re: A total waste of effort to support a transparent bluff

      Following Brexit too much as I do, I really don't know if May's plan is to turn the Chequers proposal into a EEA + CU deal at the last minute or crash out with no deal. Those are the only two options, a FTA won't fly because a North Sea border is politically impossible.

      Things like May not letting MPs see the impact assessment of no deal before the final vote isn't a reason to be cheerful.

      1. Len Silver badge
        Meh

        Re: A total waste of effort to support a transparent bluff

        To be honest, since she triggered Art. 50 I don't think Theresa May has that much influence on the outcome any more, it's not hers to decide.

        The UK will just be bounced around by external actors such as the EU27, EFTA and WTO until it comes to a halt somewhere. I personally think that 'somewhere' will be very close to EEA+CU, either just before the deadline or a week or two after crashing out, to stop the chaos.

        1. Doctor Syntax Silver badge

          Re: A total waste of effort to support a transparent bluff

          a week year or two after crashing out, to stop the chaos.

          FTFY. And that would be an optimistic timetable given how long these things normally take to negotiate.

          1. Len Silver badge

            Re: A total waste of effort to support a transparent bluff

            @Doctor Syntax I see where you are coming from and obviously normally these things would take a long time to negotiate. In this case I feel it might be a lot quicker than usual as the UK will not be part of the negotiation.

            The EU27 and EFTA would need to agree on the offer (I have a strong suspicion the EU27 have two or three off-the-shelf offers already finalised and agreed internally, possibly a lot of the work on agreeing with EFTA has also been done) the UK's only role will be to sign on the dotted line.

            1. Doctor Syntax Silver badge

              Re: A total waste of effort to support a transparent bluff

              @Len

              I hope you're right. If the backwoodsmen stage their coup first even getting them to sign the dotted line will be a problem until there's an upturn in the sales of pitch forks and a few heads appear on spikes on London Bridge.

      2. Dan 55 Silver badge
        Facepalm

        Re: A total waste of effort to support a transparent bluff

        By which I mean Irish Sea border. Not enough coffee...

    2. Doctor Syntax Silver badge

      Re: A total waste of effort to support a transparent bluff

      "It is obvious to the EU that May will never risk destroying Britain with a No Deal Brexit"

      OTOH she's continually being hounded by the grass roots backwoodsmen who would. To some extent this might be an attempt to warn them which is indeed a wasted effort as they just call it Project Fear and disregard it. The worry is that it might be a much belated warning to the rest of us what to expect in the not impossible situation that they get their way. The truth is that this is the feasibility study that ought to have been completed and published well before the trigger was pulled, in fact, well before the decision was taken to actually pull the trigger.

      1. Tom Paine Silver badge

        Re: A total waste of effort to support a transparent bluff

        Easy to say in retrospect, but how long would it have been before Paul Dacre was calling on the masses to rise up and overthrow the state for their treasonous ignoring of the result?

    3. Peter2 Silver badge

      Re: A total waste of effort to support a transparent bluff

      It sort of depends on your point of view.

      Maybe 5% of the population actually wants a no deal brexit. However, failing to prepare tends to be preparing to fail. In this case, does it cost UK PLC more to support making the bluff looking like a somewhat viable plan that then has to be honored as a legitimate threat by the EU negotiators that can then be negotiated away than it would cost if the EU negotiators call the bluff, knowing that it's a bluff?

      If the potential cost of having the bluff called is higher than the cost of supporting the bluff then it's worth spending the money, although I do think it a bit of a shame that negotiations affecting ~500 million people and the strategic balance of power in Europe for the next 50-100 years are being treated as a high stakes game of poker that inevitably neither side can win.

      1. Anonymous Coward
        Anonymous Coward

        Re: A total waste of effort to support a transparent bluff

        I do think it a bit of a shame that negotiations affecting ~500 million people and the strategic balance of power in Europe for the next 50-100 years are being treated as a high stakes game of poker that inevitably neither side can win.

        Brexit or not, there's no chance that the EU will still be around in it's current form in 30 years, let alone 50. Ever since the EC was turned into the EU the backlash has been growing, and in most countries the only outlet for that is the extremist left and right parties, which are therefore getting a veneer of legitimacy that they do not merit. That's what people should really be worried about, not the more-or-less negotiated departure of one reasonably moderate country.

        Some time in the not-too-distant future we're going to se an EU parliamentary election that returns a majority of populist anti-EU candidates. Then the shit will really hit the Brussels fan.

        1. Dan 55 Silver badge

          Re: A total waste of effort to support a transparent bluff

          Of course the EU won't be around in its current form 30 years from now. It was different 30 years ago* and it will be different 30 years from now.

          And if you're worried about extreme parties, I have move confidence e.g. Germany will survive them than the UK. You see a far-right demo on the news but don't see loads of other demos in town squares all around Germany. In the UK the Tories have lurched to the right following UKIP and UKIP have just lurched to the right once again. If there's no deal, the UK is going to turn into a populist hellhole.

          * that was when the UK more-or-less came up the Single Market, the EC adopted it wholesale, and it became the world's biggest market.

          1. Anonymous Coward
            Anonymous Coward

            Re: A total waste of effort to support a transparent bluff

            that was when the UK more-or-less came up the Single Market, the EC adopted it wholesale, and it became the world's biggest market.

            And if it had stayed like that the whole of Europe would be in better shape, but some assholes just had to turn it into a political empire.

        2. strum Silver badge

          Re: A total waste of effort to support a transparent bluff

          >Ever since the EC was turned into the EU the backlash has been growing

          The 'backlash' has nothing to do with Maastricht. We're suffering a bout of extremism, because of the economic shock of 2008. Just as the Great Depression fostered all sorts of extremism around the world, the 'Great Recession' is doing the same.

          It only remains to be seen whether the original solution is repeated.

          1. Anonymous Coward
            Anonymous Coward

            Re: A total waste of effort to support a transparent bluff

            The 'backlash' has nothing to do with Maastricht. We're suffering a bout of extremism, because of the economic shock of 2008.

            Try and convince yourself of that all you like, but most people care little for economics, they just hate being told what to do.

          2. Tom Paine Silver badge

            Re: A total waste of effort to support a transparent bluff

            Exacerbated by Russian ops, of course. Would the vote have been Leave if Putin hadn't deliberately pushed 5m refugees out of Syria towards Europe?

    4. Version 1.0 Silver badge

      Re: A total waste of effort to support a transparent bluff

      You really think that May is in control? It seems to me that she's just trying to stay on the toilet seat with a bad case of diarrhea during a storm ... like all politicians these days, her only priority is to stay in power long enough to retire with a nice big cheque.

      How do you think today's politics will look in the history books in 100 years time?

      1. codejunky Silver badge

        Re: A total waste of effort to support a transparent bluff

        @ Version 1.0

        "How do you think today's politics will look in the history books in 100 years time?"

        I cant imagine even with the ability of history to forget, rose tint and wash over things that the brexit situation could ever be looked back on fondly. In no way has the conduct been something to be proud of.

        1. phuzz Silver badge

          Re: A total waste of effort to support a transparent bluff

          I cant imagine even with the ability of history to forget, rose tint and wash over things that the brexit situation could ever be looked back on fondly. In no way has the conduct been something to be proud of.

          We'll be a footnote while the rest of the history book* concentrates on the US government.

          (* webpage? podcast? direct memory transfer?)

          1. Ken Hagan Gold badge

            Re: A total waste of effort to support a transparent bluff

            "We'll be a footnote while the rest of the history book* concentrates on the US government."

            We may turn out to be the more interesting story. The US will probably survive Donald. The UK may not survive Dave, Nigel and Theresa.

          2. Tom Paine Silver badge

            Re: A total waste of effort to support a transparent bluff

            You think the USA will be around in anything like it's current form in 2118? It's possible, I suppose.

        2. Doctor Syntax Silver badge

          Re: A total waste of effort to support a transparent bluff

          "I cant imagine even with the ability of history to forget, rose tint and wash over things that the brexit situation could ever be looked back on fondly. "

          Some of us have realised this all the time although I assume this is actually the "No true Scotsman" being rehearsed.

          1. codejunky Silver badge

            Re: A total waste of effort to support a transparent bluff

            @ Doctor Syntax

            "Some of us have realised this all the time although I assume this is actually the "No true Scotsman" being rehearsed."

            I was thinking more broadly over 2 elections and a referendum and possibly even further back than that. The Split between the voter and the politician and the coercive methods employed against the voters.

    5. Brewster's Angle Grinder Silver badge

      The Jester is King; long live the Jester!

      "It is obvious to the EU that May will never risk destroying Britain with a No Deal Brexit..."

      A deal has to be in place by ?November. So even if May does sign some heads of terms, and manages to get it through parliament, she could be ejected and PM Boris rip up the deal before the A50 clock expires.

      Whether we get a deal or not depends on the power balances of parliamentary factions and how well the individuals involved do politics. May is not good at this kind of politics and their are enough ideologues who'd want Brexit at any cost, that no deal is a very real possibility.

    6. Ken Hagan Gold badge

      Re: A total waste of effort to support a transparent bluff

      "May will never risk destroying Britain with a No Deal Brexit"

      It's not her decision. Neither is it the other 27's decision. Any agreement needs to be signed by all 28 and it is perfectly clear to me that no such agreement is possible. Therefore, we are heading for a hard Brexit. Also, this was obvious at the time of the referendum, so I'm quite bemused about what everyone is acting so surprised about and equally bemused that people didn't start planning on the Friday morning for exactly this outcome.

      And while we're on the subject of the impossible, I'd just like to point out that reversing Brexit would also require the consent of the other 27 and after the way we've treated them in the past couple of years I'd say it is more likely that Donald Trump will invite Vlad to join NATO.

      1. Anonymous Coward
        Anonymous Coward

        Re: A total waste of effort to support a transparent bluff

        The EU has made it clear that we can drop Article 50 and return to EU membership and normality.

        1. Ken Hagan Gold badge

          Re: A total waste of effort to support a transparent bluff

          "The EU has made it clear that we can drop Article 50 and return to EU membership and normality."

          Not officially, and with good reason.

          Whilst various EU politicians have made this suggestion, it hasn't actually been offered formally and with good reason. Article 50 *is* the point of no return. The point of the 2-year period is not "cooling off" but rather to let everyone adapt. If it were possible to change your mind 23 months in, a lot of people who had spent the 2 years spending money and making plans for the new arrangement would be right pissed off that they'd been deceived. There's no way that would not end up in court and (in my view) equally no way that all 27 remaining EU members would agree to even try it.

          The point has also been made *several* times, that if the UK gets a special favour and ends up with a nice deal outside the EU then the electorate in many EU countries might start voting for anti-EU parties. Even those who don't want to "punish" the UK are opposed to the idea of "rewarding" it.

          It is conceivable that the UK might be allowed to fast-track its re-entry, but it would spend at least some time officially "out" and re-entry would be on the terms that are offered to any other third-party. That means accepting the Euro and no special "rebates". It is very unlikely that this would get past any UK referendum on re-entry and also very unlikely that the UK could re-enter without such a referendum.

          1. Doctor Syntax Silver badge

            Re: A total waste of effort to support a transparent bluff

            "It is very unlikely that this would get past any UK referendum on re-entry"

            I think it would/will have no problem. The great mystery will be why, as the country proves to be so anti-Brexit, the original referendum produced such a puzzling statistical effect.

            1. Anonymous Coward
              Anonymous Coward

              Re: A total waste of effort to support a transparent bluff

              The great mystery will be why, as the country proves to be so anti-Brexit, the original referendum produced such a puzzling statistical effect.

              People rarely vote for what they want, they vote against what they don't want. The Brexit referendum was a vote against the EU, not necessarily for anything that would replace it. Had there been a vote on Maastricht back in 1992 the polls all suggested that it would have been rejected by ~ 70% and attitudes have hardened even more since then. There is zero possibility that the UK would ever vote to rejoin the EU in its present form.

              1. Tom Paine Silver badge

                Re: A total waste of effort to support a transparent bluff

                Had there been a vote on Maastricht back in 1992 the polls all suggested that it would have been rejected by ~ 70% and attitudes have hardened even more since then. There is zero possibility that the UK would ever vote to rejoin the EU in its present form.

                But the polling's hardly changed over the last two years: https://whatukthinks.org/eu/questions/should-the-united-kingdom-remain-a-member-of-the-european-union-or-leave-the-european-union-asked-after-the-referendum/

                It's a solid fact in all teh data that Leave support rises pretty much linearly from around 15% in the 18-25 y.o age category to 70% or so in the 70+ age group. A lot of Remain campaigners believe each generation's opinion will remain more or less unchanged as they age, in which case the Leave vote will drop steadily over the following decades. Of course it's possible that people become more anti-EU as they age... me, I'm looking forward to going to the pub.

    7. Tom Paine Silver badge

      Re: A total waste of effort to support a transparent bluff

      There's a reasonably substantial school of thought among people who seem to have some idea what they;re talking about that there's really no way to avoid it. There is no conceivable deal that could be negotiated that would be acceptable to all the parties who have an effective veto on the deal (MPs, mostly.)

      I'm not qualified to say if they're right. My guesstimate is 3/1 that they are, but I've been wrong plenty of times before.

  3. Anonymous Coward
    Anonymous Coward

    "he said it involved apps most people had on their smartphones..."

    You should try getting a VAT receipt out of Just Eat. They won't give you one because you were really buying from the restaurant. The restaurant won't give you one because you were really buying from Just Eat.

    Does not take a genius to work out what's going on there.

  4. J.G.Harston Silver badge

    VAT: Wasn't it announced last month that all import VAT would be subsumed into normal annual VAT returns, regardless of source of import, regardless of a deal or no deal.

    1. colinb

      Annual?

      Do you have a link for that? Most VAT returns like mine are quarterly.

      Annual returns are for businesses of under 1.3M turnover and AFAIK you still make payments on account through the year, targeted i guess for small businesses that do not reclaim a lot and have little change in monthly cashflow patterns.

      Currently i work for an EU based company and invoice EU reverse charge VAT. I have no clue how this will work post March 2019 and currently it seems nobody else does either.

      1. Len Silver badge
        Unhappy

        Re: Annual?

        If the UK were to crash out with no deal, wouldn't it just become a third country like other non-EU countries? In that case you should probably change the 'Reverse Charge' to 'VAT Exempt' or 'Zero Rate'.

        I am by no means a VAT expert and dread my quarterly VAT admin but this had been my assumption thus far. Don't tell me I have another headache to look forward to.

        1. katrinab Silver badge

          Re: Annual?

          Without any change in the law, you would have to pay VAT to HMRC at the border before they let the goods in, but given the volume of trade involved, that isn't practical; so the proposal is that you will declare it on your VAT return at the end of the quarter.

          WTO rules mean that if this is how you treat a truckload of Irish beef that is being delivered to Sainsburys in Newry, you have to treat imports from all over the world the same way.

          1. Anonymous Coward
            Anonymous Coward

            Re: Annual?

            WTO rules mean that if this is how you treat a truckload of Irish beef that is being delivered to Sainsburys in Newry, you have to treat imports from all over the world the same way.

            It's a lot more complicated than that.

            Countries can set up free-trade agreements within a group that don't have to follow those rules (that's how the EU works). WTO is a fallback when no other agreements are in place. Dealing with EU countries under WTO rules does not require that we deal with all other countries the same way *if* we have an approved FTA that includes them. EU, NAFTA, etc.

            1. katrinab Silver badge

              Re: Annual?

              Of course it is a lot more complicated than that.

              However, it is true to say that if we unilaterally open the border with Ireland and let a pig farmer in Dundalk deliver a van-load of pigs to a butcher in Newry without any customs checks, then we have to do the same for the whole world. Yes it is different if we have a trade deal, but we can't have one with Ireland alone and not the rest of the EU.

              The fact remains, there are 260 border crossings between Ireland and Northern Ireland. There are 135 border crossings between the whole of the rest of the EU and the whole of the rest of the world. At the moment, crossing the Irish border is like crossing a local council border, the only sign of the border is the line in the road where the tarmac has been laid at different times by different highways authorities, and some speed limit signs.

      2. H in The Hague Silver badge

        Re: Annual?

        "Currently i work for an EU based company and invoice EU reverse charge VAT. I have no clue how this will work post March 2019 and currently it seems nobody else does either."

        If the UK's out of the EU by then you just follow the same procedure as for other exports outside the EU. Simply means entering the amount in a different box. (In NL it would go into section 3a rather than 3b of the VAT declaration form.)

        https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/business/vat/vat_in_the_netherlands/vat_relating_to_purchase_and_sale_of_goods/export_from_the_netherlands_to_non-eu_countries

        1. colinb

          Re: Annual?

          Ok thanks, that link applies to goods, services have their own rules.

          There is a link for services on that site https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/business/vat/vat_in_the_netherlands/vat_relating_to_services/reverse-charging_vat

          That implies reverse charging still applies for in-bound services.

          It could be nothing changes, fine by me.

  5. katrinab Silver badge
    Alert

    I presume the developers at Sage have the full spec sheet for the new import VAT thing together with access to a test submission server that they can use while working on v25 of their software, which is due out towards the end of this (tax) year. Same for Quickbooks and so on.

    1. VinceH Silver badge

      The specs for the existing APIs and (I think) beta ones are all published on HMRC's site somewhere, and there is a sandbox for developers to test them - so I would hope that includes this, and that all third party accounts software developers therefore have access.

      1. katrinab Silver badge

        Yes, but given that Theresa May doesn't have the slightest clue what is going to happen next year; HMRC, and therefore Sage won't know either.

        Last-minute changes are usually things like increasing the VAT rate from 17.5% to 20%, which can done very easily. Anything that requires changes to boxes on the return requires a lot more time for preparation.

  6. Captain Hogwash Silver badge
    Flame

    Re: the department felt it had been acting lawfully

    Feelings are irrelevant, especially so for a government department.

    1. Doctor Syntax Silver badge

      Re: the department felt it had been acting lawfully

      HMRC usually do, including on the numerous occasions when tribunals have found otherwise.

  7. alain williams Silver badge

    Lots of lovely fines sent out all round ...

    by HMRC to companies who have not been able to make their accounting systems compliant by March 2019 to the rules that will have been modified (again) in February 2019.

    There are many who run accounting systems that have been developed in-house to deliver what the organisation needs.

    This is on top of MTD (Making Tax Difficult) that everyone, including your house-to-house window cleaner) is supposed to do from next year.

    Muppets.

  8. Doctor Syntax Silver badge

    "Tests to see whether it can cope with the strain are only just over halfway through."

    I understand there's this bloke called Pester looking for a new job. It sounds like just the thing for him.

  9. Anonymous Coward
    Anonymous Coward

    I'm currently looking at Sales Tax systems for the tax returns on products we sell internationally (Europe and wider). We're monitoring Brexit but we take our guidance from HMRC as we do a quarterly tax return which has to be accurate.

    The government are next to useless.

    1. Doctor Syntax Silver badge

      "The government are next to useless."

      Next to?

      1. codejunky Silver badge

        @ Doctor Syntax

        "Next to?"

        I can only assume Corbyn. This lot are bad but he is there to remind us it could be somehow a hell of a lot worse

        1. Doctor Syntax Silver badge

          Re: @ Doctor Syntax

          "This lot are bad but he is there to remind us it could be somehow a hell of a lot worse"

          The usual description is "between a rock and a hard place".

  10. Tom Paine Silver badge

    SUBS!

    Typo: "parrallel."

  11. steviebuk Silver badge

    Instead they've...

    ...been busy pointlessly chasing people over IR35.

    Regarding the "Voice is my password". I still want to test that. I did the recording and recorded myself at the same time. I want to ring them back and play back the recording to see if it works but I can't work out at what point it asks you to speak because you never get the option. You just get told about it.

    If they play back of the recording works have they never actually watched the fucking film before they stole the idea?

    1. Anonymous Coward
      Anonymous Coward

      Re: Instead they've...

      "If they play back of the recording works have they never actually watched the fucking film before they stole the idea?"

      I've watched the film, and I refuse to sign up for voice ID because of it.

      Before they helpfully added the message telling you that you don't have to register for it, I'd ring them up and when prompted say "No, I refuse" at the relevant voice prompt... At least the system seems to notice when you're not registering the correct passphrase, and tells you to try again another time.

  12. Zippy´s Sausage Factory
    Unhappy

    "We need three years"...

    They've had nearly two years to prepare for this already, so they should be almost ready by now, right? Right?

  13. Will Godfrey Silver badge
    Unhappy

    Yes they have a plan

    It's 'grab the money and run'.

  14. Anonymous Coward
    Anonymous Coward

    Mussolini

    When brexit all ends in tears and food shortages,fuel shortages, raging inflation, not enough staff in the NHS and riots. My only consolation is that Boris, Brexit Bulldog and friends end up like Mussolini, just hanging around in a railway station.

    Not much to look forward to and a poor return for the expensive chaos, but I expect against the complete destruction of the service and manufacturing industries, the loss of jobs and all economic growth, it may raise a small smile, that's if the bastards don't run away.

    I suppose some Tories will enjoy that retro 1920's vibe.

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