Since exiting the EU over three years ago, UK traders have weathered the introduction, delay and ultimate abandoning of some of the rules and regulations for importing goods into the UK. They’ve adopted the new, full controls on exports in the other direction and adapted to new processes laid out by the Northern Ireland Protocol. To add to the disruption, the way UK Customs declarations should be filed is part way through changing and traders are (if slowly) manoeuvring their way through the transition from the legacy CHIEF customs declaration system to CDS.

After the best part of four years, and despite multiple date changes and decision reversals, CHIEF has already been withdrawn in part, with the final deadline due later this year: 

As of the end of 2022, the majority of declarants were no longer able to make import declarations on CHIEF. 

After 30 November 2023, you won’t be able to make export declarations on CHIEF.

Although it will not be possible to use CDS exports at all ports until after the summer, it is currently possible to use CDS in Northern Ireland, via GVMS ports or for Export Supplementary Declarations for those approved for simplified procedures and the possibility to dual run against CHIEF will exist until access to CHIEF is finally decommissioned.

Lack of preparedness: lessons from import declarations

Last autumn, HMRC sent letters to 220,000 GB VAT registered traders and although not all of them were importers and or exporters, and many would have used the services of a broker or forwarder, this communication was indicative of the lack of awareness – and lack of preparedness – for the impending move.

While some traders were early adopters (and Descartes was the first company to get its customers onto the new system way back in 2018) a huge number failed to make the switch in time – with many leaving it to the very last minute - and then not fully appreciating the difference between CHIEF and CDS, trying – and failing - to replicate the same workflows and processes. 

Unfortunately, we can expect the same this year. With exports to the EU accounting for 42% of all UK exports in 2021, according to data from the House of Commons Library – and exporters more likely than importers to be self-filers - there are likely to be many more organisations who have yet to make the switch. 

Fear of the new system, as well as scepticism about HMRC and trade readiness, has been understandable – as too the expectation of further delays based on precedent (let’s face it, it isn’t unreasonable to make comparisons here with the Boy Who Cried Wolf) – yet, the consequences of inaction are now speeding dangerously close to becoming a reality. Despite the latest delay from March ’23 to November ’23 for the export declaration deadline, the fact that the transition relating to import declarations has now happened, should be a stark reminder to businesses that CDS will happen in full. And lessons indicate that putting off the migration process is only going to complicate matters further.

From the latest data requirements and processes, to the sheer scale of the challenge associated with new systems and software, the move from CHIEF to CDS is far from straightforward. CDS is a dramatic shift away from the previous ways of working in CHIEF, right from the way the customs declaration looks, to the new data needed. 

HMRC has tried to introduce some simplifications. For example, a blanket document code to declare that no prohibitions or restrictions apply “999L” has been temporarily introduced under CDS to speed up onboarding. And, like other software houses, Descartes continues to make changes to ease the process; however, nothing can replace the time necessary to learn a new system and there is nothing like real user experience to drive improvement. 

Training and education are essential as is access to test systems to ensure organisations understand the new processes and steps required. Last summer, Descartes saw an exponential increase in companies engaging to be ready for CDS imports, showing a hunger for education and training that can’t be left to the last minute. 

Reality bites

There is a great deal of source information available. HMRC has provided documents, such as declaration completion guidance; while systems providers, such as Descartes, have created online training courses, videos and other online guides as well as further technical solutions to guide users without making decisions for them. But those who have left it until now hoping for individual attention, are going to find it difficult and it may be impossible to receive the attention they would prefer. With just a few months to go, group sessions from software providers on how to use the software, or external training organisations who can provide more generic CDS guidance, are now the most likely to help. 

And while both software providers’ and HMRC’s support teams have been bolstered in anticipation of the surge of questions and enquiries, it’s inevitable that there will be delays in responding, which is why self learning and education is going to be vital.

Time critical

It’s never been more important for declarants to understand the requirements to submit the customs declarations they need to, and be aware of changes in the codes used or information required.

Unless you choose to use a broker to submit your declarations you will need to:

• Apply for an Economic Operator Registration and Identification number if you do not already have one;
  
• Register for a Government Gateway account if you do not already have one;
  
• Register for the Customs Declaration Service via 
  
• www.gov.uk/hmrc/cds-get-access;
  
• Unless you are using a Community Service Provider, authorise your chosen software solution to submit declarations on your behalf.
  

Benefits of doing your own CDS declarations:

• Control of the data being declared;
  
• Direct visibility of the status of the declaration and confirmation when goods exit the UK supporting zero rating of VAT or reclaiming of taxes.
  

If you choose to use a broker rather than submit your own declarations, there are still five steps that should be taken:

• Register for a Government Gateway account if you do not already have one;
  
• Apply for an Economic Operator Registration and Identification number if you do not already have one;
  
• Register for the Customs Declaration Service via 
  
• www.gov.uk/hmrc/cds-get-access;
  
• Choose which payment method to use and ensure you have set up the correct Direct Debits or authorisations;
  
• Set up a process to ensure your broker has clear instructions and information about your consignment. For example - the incoterms, awareness for all values, the location information, and nature of transaction information.
  

Traders using brokers should also be prepared for the fact that the type of evidence and data they receive today will change – the old CHIEF prints just don’t exist anymore, the C88 is dead and the data is structured differently. Equally, those used to the DTI-S8 for proof of exports will find that it no longer exists.

Conclusion

For those only submitting export declarations, the lessons learned over the last few months make it clear that the latest delay to CHIEF decommissioning is just that – and that, more importantly - it remains vital to take action today and be CDS ready; even if you do not plan to go live immediately, you can both get on the front foot and take advantage of any
dual-running possibilities.

It is merely a short matter of time now before CDS is the new normal. Until then, let’s not fool ourselves that it’ll be a smooth ride, it’s a bumpy road to progress. For more information visit
https://www.descartes.com/uk/customs-declarations-changes Or email info@descartes.com

Descartes is the global leader in providing on-demand
software-as-a-service solutions focused on improving the productivity, performance, and security of logistics-intensive businesses. Descartes will be attending Multimodal 2023 at the NEC Birmingham between 13th and 15th June. Come along and talk to one of our experts on stand No. 4058.

www.descartes.com