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Britain's tax chief warned tonight he will need up to £450million to pay for a no-deal Brexit .

Jon Thompson, permanent secretary of HM Revenue and Customs, said he would need 3,000 to 5,000 extra staff to deal with an influx of paperwork on customs and enforcement.

That includes "ramping up" staff in the government's Manchester customs hub "significantly", he told MPs on the Public Accounts Committee.

Mr Thompson said there has been a "burst of activity" as his department spends £78million from a £250million fund for key departments to prepare for Brexit before April.

He has already recruited more than 250 extra staff.

(Image: PA)

Asked if he would need more cash after April, Mr Thompson told MPs: "Significantly more.

"It will be several hundred million pounds if we are implementing [no deal], that's the most extreme version of leaving the EU.

"In that scenario you are looking at an estimate of between £300million and £450million."

Public Accounts Committee member and Lib Dem MP Layla Moran said: "This blows a hole in claims that we can just crash out of Europe with no deal without disastrous consequences.

(Image: REX/Shutterstock)

“HMRC is being asked to do the impossible, without enough time, resources or clarity over what will happen next."

Labour MP Stephen Doughty, a backer of the pro-EU Open Britain group, said: "A no deal Brexit risks plunging our customs system into chaos, with queues of lorries backing up at our ports, bureaucratic chaos for British businesses and a hard border in Northern Ireland.

"By threatening no deal, we are aiming a loaded gun at our own foot."