Recommendation 27

Departments’ track record delivering IT projects is particularly relevant given that HMRC is still working on replacing its CHIEF customs system with a new Customs Declaration Service (CDS). CDS was originally supposed to be in use by all UK traders in January 2019, but the project has been delayed and in 2020 HMRC extended its contract with Fujitsu to ensure the CHIEF system could be used for another five years, at a cost of £17 million a year. Dual running systems means HMRC has therefore had to carry out work to increase the capacity of both CDS and CHIEF to cope with the increase in declarations it expects following the UK’s exit from the EU.84 CDS now has the capability to process 200 million declarations a year and the main challenge HMRC now faces is transitioning all users from CHIEF to CDS. HMRC now plans to close CHIEF to import declarations in September 2022 and export declarations in March 2023, before turning off the system entirely in June 2023. However, by mid-October 2021, only 42 users out of a population of around 5,000 had migrated to CDS.85 HMRC told us it expected to see a big increase in the number of businesses migrating to CDS after January.86 The Northern Ireland Protocol