Introduction
The aftermath of Brexit ushered in a period of unprecedented upheaval and complexity, both for nations directly affected and their institutions. Among these, His Majesty’s Revenue and Customs (HMRC) bore a substantial brunt of the chaos, grappling with the administrative changes that ensued after the United Kingdom’s departure from the European Union (EU). Following cost cuts and centralisation of HMRC’s resource when we joined the EU, HMRC found that a significant allocation of resources was needed to navigate the administrative nightmare, causing operational strain. However, as time progresses, there are signs of recovery within HMRC. Here, we delve into the apparent recovery of HMRC following Brexit, highlighting the challenges they encountered and the strategies being employed to restore service levels to pre-Brexit standards.
Challenges and Resource Allocation
Brexit, a landmark event that redefined the UK’s geopolitical landscape, posed immense challenges for government agencies and departments. For HMRC, which plays a pivotal role in revenue collection, trade facilitation, and customs enforcement, the task of adapting to new regulations and procedures was monumental. Much of the agency’s resources were redirected to address the intricate web of administrative tasks that followed the UK’s exit from the EU. The complexity of untangling decades of intertwined economic and regulatory frameworks created an administrative burden that strained the agency’s capabilities.
The increased demands on HMRC’s resources led to disruptions in their regular operations, affecting their ability to provide timely and efficient services. Services that were previously taken for granted faced delays and complications, causing frustration among businesses and individuals relying on HMRC’s support. This period of turmoil undoubtedly presented a steep learning curve for the agency, as they grappled with the intricacies of post-Brexit trade dynamics and compliance requirements.
Signs of Recovery
Amid the chaos, recent developments suggest that HMRC working toward reaching pre-Brexit levels of checks. . The resurgence of activities centered around non-EU traffic is a noteworthy indication of this. There is a discernible effort to return services toward those pre-Brexit levels, striving to adhere to the realistic timescales outlined in the Citizens Charter.
The increased activity within HMRC is palpable in multiple aspects. Notably, local audits involving importers have witnessed heightened scrutiny, signifying a renewed effort to ensure compliance and accurate classification. Document checks have become more rigorous, and there has been a notable rise in the number of Customs examinations of cargo.
Moreover, the agency’s emphasis on the responsibility for correct classification being the importers, rather than forwarders, marks a return to directing responsibility to those with the better working knowledge of the product. This has always been their (HMRC) stance and underscores the importance of accurate classification in the broader context of trade compliance. Additionally, the focus on freight and insurance charges, and their potential impact on duty and VAT calculations is another area of increased focus as HMRC work to ensure all applicable taxes are correctly paid.
Collaborative Support and Compliance
In light of these developments, the invitation for businesses to engage in the review of classifications, procedures, and value build-up serves as an opportunity for stakeholders to align with evolving regulatory frameworks. This engagement facilitates a proactive approach to compliance, mitigating risks and ensuring smooth interactions in the future.
Furthermore, HMRC’s commitment to stringent audits, including a focus on commodity codes and other details, underscores their resolve to check for the highest level of compliance.
Conclusion
The post-Brexit era has posed unprecedented challenges for HMRC, testing their adaptability, resource allocation, and service delivery. The agency’s initial struggles in navigating the administrative complexities that followed the UK’s exit from the EU were evident. The revitalized focus on non-EU traffic, increased activities, and stringent compliance measures allude to a renewed focus on compliance for importers.
The journey to recovery for HMRC is a sign that renewed focus is needed on the part of importers and forwarders alike. As HMRC endeavours to reinstate services to pre-Brexit standards and uphold regulatory expectations, collaboration with stakeholders becomes pivotal.
In conclusion, we will continue to strive for exemplary compliance and understand the importance of collaborative efforts to ensure our customers enjoy an open and honest relationship with HMRC that means any additional checks or audits will not reveal anything unexpected.