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Summer 2019 Truck and Track 25
TACHOGRAPH ANALYSIS
UK businesses undertaking international
trade have been, understandably,
focused on Brexit – making contingency
preparations through unprecedented
levels of uncertainty in the UK-EU
supply chain. Even with new transitional
simplified procedures and tariffs, the
impact on making preparations, adapting
software solutions in readiness and -
where necessary - recruiting additional
resources has been significant. But, while
this is a period of focus, it is no excuse for
overlooking the biggest change within
HM Revenue & Customs (HMRC): namely the introduction of
the new Customs Declaration Service (CDS), which was always
planned to be implemented in 2019 – deal or no deal.
From new data requirements and processes to the challenges
associated with using new systems, the move to CDS is far from
straightforward. Companies will need significant hand-holding to
make the change – from education and training to the creation of
Master Data files, back end integration and support with new real-
time tariff information feeds.
One software company has been a leading part of HMRC’smanaged
migration process to get pilot customers operational. Martin
Meacock, Director, Product Management at Descartes Systems UK
shares Descartes’ experience of working with the first three pilot
migrations and calls on companies to start CDS planning today.
New Era of Declaration
Themigration to CDS fromthe existing Customs Handling of Import
and Export Freight (CHIEF) has been scheduled for some time.
And, although timelines and functionality have been amended in
response to Brexit, with HMRC estimating that 4,200 companies
made customs declarations on behalf of 140,000 businesses in
2017, the logistics of transitioning to a new systemare challenging.
CDS is an EU Union Customs Code (UCC) compliant system, which
means there has been a realignment of datawhere data that would
have been at the declaration level is now at item level, and vice
versa. There is also a significant amount of additional information
that must be explicitly declared.
Master Data
Another main change under CDS is a requirement to declare
more information about the holders of certain authorisations or
accounts, as well as providing related documents. For example, a
company using a deferment account to pay customs taxes under
CDS will require not only the six digit account number; instead of a
prefix letter previously required in CHIEF to justify whether it was
the declarant’s or importer’s account, they now need the account
owner details plus the account guarantee details, including
references. Essentially, companies can be required to declare six
pieces of data rather than the two required with CHIEF.
While thiswill initially demand some additional data sourcing, once
achieved there is likely to be a degree of repetition of declaration
data. This provides an opportunity to create a Master Data file that
can be easily reused. There is also a chance to leverage improved
electronic data exchange with partners direct into a declaration
to reduce manual rekeying, further streamlining processes and
minimising errors.
Companies should also look for a system that includes real-time
tariff data to support the declaration. Despite an initial delay in
HMRC being able to provide usable tariff data, this level of real-
time feedback will be invaluable as organisations start to use CDS
– both for those manually making declarations and as part of an
integrationwith an ERP system to automatically enrich and update
Master Data.
Get Ready
If organisations are to achieve this level of automation, they need
to get started soon. The shift from CHIEF to CDS is a significant
cultural change and, while system providers have an essential role
to play in enabling the migration, companies must quickly come to
terms with the new data and process requirements.
Training and education are essential to ensure organisations
understand the new processes and steps required. HMRC
has provided documents, such as declaration completion
guidance; while systems providers have created videos and other
downloadable guides. But it is also essential to recognise that CDS
is a work in progress – ensuring the guidance is being provided by
organisations that have expertise and experience in the actual
implications of both the system transition and the new customs
declaration requirements is crucial.
With dual running of CHIEF and CDS likely to continue during
2019, alongside ongoing uncertainty on when the UK withdrawal
agreement will be passed and allow the UK / EU to move into the
transition period – or whether we face another no deal cliff edge, it
may be tempting to postpone CDS preparation. But given the sheer
numbers of companies that must make the transition to CDS, the
industry is going to be stretched. If companies don’t actively seek
out migration support, education and training soon, there is a good
chance that they will not be able to access the limited resource
available required to minimise upheaval and to actively explore
opportunities such as Master Data files and templating, as well
as electronic data exchange with partners, to streamline the new
declarations process.
MartinMeacock
Descartes Systems UK
CDS:
Start planning today