Martin Meacock, Vice-President of Product Management, Descartes: With a global pandemic, chaos at the borders, an HGV driver shortage and ensuing supply chain chaos, compounded by political uncertainty, inflation and a fuel and energy crisis – it’s fair to say UK business has had a challenging few years. And that’s not to mention Brexit.
Since exiting the EU, 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 changing and a new customs declaration system (CDS), will take over from the legacy CHIEF.
After the best part of four years, HMRC has finally set dates, and the deadlines are looming. Going by the current schedule, CHIEF will be withdrawn in two stages:
•After 30 September 2022, you won’t be able to make import declarations on CHIEF.
•After 31 March 2023, you won’t be able to make export declarations on CHIEF.
Lack of preparedness
HMRC recently sent letters to 220,000 GB VAT registered traders and although not all of them will be importers and or exporters, and many will use the services of a broker or forwarder, this communication is indicative of the lack of awareness – and lack of preparedness – for the impending move. An estimated 4,200 companies made customs declarations in 2017.
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 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 – yet, the consequences of inaction are now speeding dangerously close to becoming a reality.
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.
“Companies will need significant help to make the change”
Training and education are essential as is access to test systems to ensure organisations understand the new processes and steps required. Descartes has seen an exponential increase in companies engaging to be ready for CDS, showing a new hunger for education and training that we expect to increase as we move ever closer to the end of CHIEF.
Changes are also necessary to ensure brokers are able to act efficiently on behalf of traders, including where traders must ensure they have set up their duty deferment accounts properly, digitally allowing brokers to use them on their behalf and ensuring they have put new direct debit mandates in place.
With all the pressure on resources to reach the maximum efficiency, automation is key part of CDS. But unless companies have already put in place the level of integration or master data required, then it might be too late to benefit.
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 most likely to help.
Conclusion
So even if there is a further delay to CHIEF decommissioning, or perhaps you only submit export declarations, 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.
Over time of course, CDS will become the new normal. Until then, let’s not fool ourselves that it’ll be a smooth ride, it’s a bumpy road to progress.
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