Upcoming Changes to UK’s Customs Systems

This blog was last updated on November 13, 2023

It seems such a short time since HMRC sent a reminder letter in March 2022 recalling the upcoming changes to the UK’s customs systems and explaining what to do to prepare for these changes.

With the deadline rapidly approaching, here’s a brief recap.

The Customs Handling of Import and Export Freight (CHIEF) system, which is now nearly 30 years old (it was introduced in 1994), will close in two phases:

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

The Customs Declaration Service will serve as the UK’s single customs platform, with all businesses needing to declare all imported and exported goods through the Customs Declaration Service (CDS) after 31 March 2023.

CDS benefits and key changes

As mentioned on the HMRC website, the Customs Declaration Service toolkit gives traders access to the many benefits of the upcoming changes. In summary:

Benefits

• Using the latest technology, CDS delivers an enhanced service and user experience
• CDS has the capacity and capability to grow in line with the government’s growth agenda, alongside plans to increase the volume of international trade
• CDS offers a host of specialist functions and interfaces. Underpinned by modern, cloud-based architecture, it’s fully agile and adjustable
• Businesses can declare all goods on one platform simultaneously, regardless of the customer journey. This process reduces operational costs and lessens the administrative burden of running two separate customs systems
• Declaration data is transparent and free of charge – businesses can easily access real-time import and export data and check tariffs and financial statements online using dedicated digital dashboards
• CDS is designed to be completed digitally.

CDS changes

• CDS captures some information differently, and the way the business inputs data is different (additional information and supplementary documents will be required for some commodity codes imported into the UK)
• There will be additional methods to make payments of customs duties as follows:
  • Cash accounts
  • Duty deferment accounts
  • Immediate payments
  • Guarantee accounts
  • Individual guarantees
• CDS enables you to update customs agent permissions online

What does this mean in practice?

To be able to use CDS and import goods into the UK from 1 October 2022 and to export from 1 April 2023, businesses are required to have the following:

• A Government Gateway Account -> user ID and password
• A GB Economic Operator Registration and Identification (EORI) number
• A Unique Tax Reference (UTR) number
• The business address that HMRC holds for customs records
• The National Insurance (NI) number (if the business is an individual or sole trader)
• The business start date the business started
• An understanding of the Import and Export Tariff changes

Businesses should also consider:

• If they’re already signed up for CDS because they’re using postponed accounting for import VAT and download their certificates via CDS
• If they’re not using postponed accounting on imports, paper C79 will no longer be sent and will be available digitally moving forward
• Any training or information the business needs to provide to staff
• Any changes to the finance processes, for example setting up a new Direct Debit for a duty deferment account, or how to pay into its cash account
• Whether the business details (email and business address) match HMRC records or if they need updating