The news that Brexit tax errors from HM Revenue & Customs (HMRC) are expected to increase due to rising workloads has prompted blockchain experts to urge the government to embrace the technology.

According to a Public Accounts Committee report, workloads are swamping HMRC workers, with tax credit errors and fraud expected to rise as a result.

“HM Revenue & Customs is under pressure and in some areas the cracks are showing,” warned Meg Hillier, Labour MP and Public Accounts Committee chair.

“The authority expects fraud and errors in tax credits to exceed its target in successive years, driven in part by policy changes that have effectively removed HMRC’s incentive to bring fraud and errors under control.”

With rising concerns over Brexit tax errors, there is fear that the issue will grow as the Brexit deadline approaches.

“As negotiations around the customs union and Irish border issue rumble on, it is of little surprise that HMRC is preparing for a heavy workload next year,” said Alex El-Nemer, Director at Nexus.

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“The impending departure from the European Union will bring tremendous complications including increased risk of tax fraud as businesses restructure, stretching resources and causing a headache for the taxman.”

Blockchain proposed as solution to Brexit tax errors

El-Nemer argues that blockchain technology could be the solution to the issue, as it will reduce errors while increasing transparency in the tax process.

“To counter these challenges, HMRC and other government departments must begin to consider the role blockchain technology can play when it comes to improving transparency in transactions and reducing administration,” he said.

“With the ability to log and view the movement of revenue in an open, secure ledger, blockchain can assist with removing the errors and speed up the processes.”

He also argued that cryptocurrencies could aid the taxation process.

“HMRC should also look towards digital alternatives like cryptocurrencies to enable tax departments to identify and tackle fraudulent activity, ultimately saving money for taxpayers.”

Blockchain’s Brexit associations

Blockchain has already been raised in connection with the Brexit.

UK Chancellor Philip Hammond previously suggested the technology as a solution to the Irish border solution, although has since been criticised for failing to follow-up on the proposal.

Meanwhile, a survey found that 51% of businesses are looking to blockchain as a means of counteracting the fallout from Brexit.