Government could lose out on billions of lost tax because Brexit has delayed key HMRC projects

Alexandra Rogers
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The government is to lose out on billions of pounds worth of tax generated by HM Revenue and Customs (HMRC) projects that have been put on hold while it figures out its customs position after Brexit.

The Times has seen a list of 39 HMRC projects that have been put on hold while the government occupies itself with the challenges of leaving the European Union.

Among those stopped in its tracks include those connected to George Osborne and Philip Hammond's "making tax digital" project which was brought in to gather more tax and simplify the process of doing so.

Included in the plans is the scrapping of the annual tax return in a move that will save £8bn per year.

Read more: Brexiters' favoured customs proposal could cost businesses £20bn

Other proposals include​ sending out free software to the majority of small businesses and allowing businesses to continue to use spreadsheets to record receipts and expenditure, which they can then link to software to automatically generate and send their updates to HMRC.

An HMRC spokesperson said:

HMRC has carefully considered the scale and pace of its transformation to ensure that it can deliver work to support EU Exit. We’ve been open with MPs and stakeholders about the impact of these changes. Our ambition to become one of the world’s most digitally-advanced tax authorities remains unchanged.

HMRC boss Jon Thompson yesterday warned that businesses could face up to £20bn in costs if Britain failed to strike a Brexit deal with the EU.

Speaking to the Treasury Select Committee yesterday, Thompson told MPs he was confident in his statements from a fortnight ago that suggested the max fac customs option - also known as highly streamlined - would be significantly more expensive to business than the new customs partnership, preferred by Theresa May and civil servants.

Thompson was grilled on his estimates, after economists at the Institute for Economic Affairs argued he was out by around £15bn, putting it closer to £5bn.

Read more: Brexit no deal as expensive as max fac, claims HMRC boss

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