In an evidence session with the public accounts committee (PAC), HMRC chief executive Jon Thompson said HMRC estimates suggested the department needed up to £450m in additional funding and between 3000 and 5000 staff to deal with Brexit if there was  a ‘no deal’ scenario.

HMRC also needs an extra £7.3m to upgrade the technology used for the customs declaration system, and Thompson said there is currently not full funding for a contingency plans if the new system is not ready by January 2019.

HMRC was already planning an upgrade to the existing CHIEF customs declaration system prior to the referendum vote, but Brexit means the deadline for implementation has been pulled forward, while failure to have a working system could see goods and lorries stack up at British ports once EU rules no longer apply.

Thompson told the committee that HMRC 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 its flagship Making Tax Digital project, can be completed alongside Brexit.

‘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 EU 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,’ Thompson said.

The HMRC chief indicated the department will be looking at the current 250 programmes of organisational changes at the end of this year, with a view to creating a priority list early in the new year. He did not comment on whether Making Tax Digital work would be ringfenced, or would be subject to revision along with the other programmes.

Report by Pat Sweet