Customs Declaration Service – Are You Ready?

A&M Tax Advisor Update

HMRC will be closing its Customs Handling of Import and Export Freight (CHIEF) system on 31 March 2023. From this date, if you import and/or export from the UK, you or your customs broker will need to make declarations through the Customs Declaration Service (CDS). You will also need to register for CDS even if you use a customs broker for imports and exports. You will need to take immediate actions to ensure you can import/export smoothly and effectively use your Duty Deferment Account (DDA).

What are CHIEF and CDS?

CHIEF (HMRC’s Customs Handling Import and Export Freight) is HMRC’s current system that records the movements of goods being imported into and exported from the UK. CHIEF is now being phased out and will replaced by the CDS (“Customs Declaration Service”). Currently, if you are a business importing goods into or exporting goods from the United Kingdom, you may use either of the two services.

CHIEF has stopped accepting new registration requests from importers from 5 July 2022. Instead, businesses will need to register with the CDS to make their import declarations. As such, HMRC is writing to over 220,000 businesses, urging them to move to the CDS in the coming months.

The Customs Declaration Service (CDS) will fully replace the Customs Handling of Import and Export Freight (CHIEF) system from 31 March 2023. Services on CHIEF will be withdrawn in two stages:

Phase one: After 30 September 2022 the ability to make import declarations on CHIEF will end.
Phase two: After 31 March 2023 the ability to make export declarations will end.

What should I do?

Since it may take some time for the migration process to complete depending on the size and complexities of your business, now is a good time to start taking action.

If you are a business making your own declarations, you should work with your software provider to ensure the necessary preparatory steps are taken to use the CDS, such as providing them with authorisation, in readiness for the deadline.

If an agent is making declarations on your behalf, you should speak to your customs brokers/ freight forwarders to ensure that they are ready to use the CDS.

There are some key steps to ensure a smooth transition from CHIEF to CDS which includes registering on the Customs Declaration Service which you will need to do (as well as your import agent). It can take between 2 hours to 5 working days to be activated.

You will need the following to register:

your GB EORI number
your 10-digit Unique Tax Reference (UTR) number – you can find this on any HMRC payment reminders, or in your personal tax account
the address for your business that HMRC holds on their customs records – If your address has changed, this will need to be notified
your National Insurance number (if you’re an individual or sole trader)
the date you started your business

The link to register is here www.gov.uk/hmrc/cds-get-access.

Duty Deferment Account (DDA)

If your business has a duty deferment account, you will need to set up a new Direct Debit Instruction for the Customs Declaration Service by 30 September 2022. If this is not set up, the Duty Deferment Account will no longer be usable, and individual immediate payments for customs duty and VAT, where applicable will need to be made each time an import declaration is made. This may result in delays in your imports and also have a cashflow impact.

How can A&M help?

If you require any assistance with the CDS registration, get stuck in the process or if you have any questions regarding your own situation, please contact us or your usual A&M VAT adviser. We can also assist you with any imports and exports queries/issues be that VAT, customs, general processes and compliance as well as customs simplifications.

Useful HMRC Links

New importers to register on new single customs platform – GOV.UK (www.gov.uk)

https://www.alvarezandmarsal.com/insights/customs-declaration-service-are-you-ready