The Customs Handling of Import and Export Freight (CHIEF) system has been a critical component of the UK's customs infrastructure since its launch in the 1980s, facilitating customs declarations for imports and exports, and allowing goods to flow seamlessly across borders. However, as part of the UK government's modernising of customs processes, the decision was made to retire CHIEF and introduce the Customs Declaration Service (CDS).
Initially planned for implementation on 30th November 2023, HMRC has recently extended the deadline to comply with the new CDS system by 30th March 2024. If you are a UK business that exports, it is crucial that you prepare for this transition well in advance to prevent substantial delays in exporting your goods - in this blog, we look at what this transition means for UK businesses and the broader implications of the transition.
Key changes in the Customs Declaration Service (CDS)
The main differences in the new CDS system present a number of welcome benefits for businesses that are already improving their internal processes. These include:
- A more modern and digital interface: The CDS is designed to be a modern, digital, and user-friendly system. It provides an intuitive interface that is more accessible and efficient for businesses, making the customs declaration process smoother and more manageable.
- Integration with other systems: The CDS has been designed to integrate with other government systems, such as HMRC's Making Tax Digital initiative. This integration streamlines processes and reduces duplication of efforts, which can be a significant benefit for businesses.
- Enhanced data management: CDS offers improved data management capabilities, enabling businesses to store and access customs-related data more easily. This can be invaluable for compliance purposes and long-term record-keeping.
- Improved reporting and analytics: The new system provides businesses with enhanced reporting and analytics features, allowing them to gain insights into their customs activities, which can aid in decision-making and planning.
- Increased automation: Automation is a key feature of CDS, which can reduce manual data entry errors and speed up the customs clearance process. It also allows for faster and more accurate processing of customs declarations.
How will the transition from CHIEF to CDS impact UK businesses?
One of the initial challenges for businesses will be adapting to the new system. While CDS is designed to be user-friendly, there may still be a learning curve for those accustomed to CHIEF. Adequate training and support will be crucial during this transition phase. This is why it is highly recommended that despite the deadline extension, business should start preparing for the transition to the new system as soon as possible.
While this transition may pose initial challenges, the benefits in terms of improved efficiency, compliance, and data management make it a necessary and positive step forward. The future impact of the transition for businesses provides a positive outlook including:
- Efficiency gains: Over time, businesses are likely to experience increased efficiency in customs operations. The streamlined processes, improved data management, and automation offered by CDS can lead to faster customs clearance and reduced costs associated with customs compliance.
- Compliance and record-keeping: CDS's enhanced data management features can be a valuable asset for businesses in terms of compliance and record-keeping. Storing customs-related data digitally can simplify audits and ensure that businesses are meeting their regulatory obligations.
- Cost implications: While there may be initial costs associated with adapting to the new system and training employees, the long-term cost savings from increased efficiency and reduced errors can outweigh these expenses.
- Trade continuity: The successful transition to CDS ensures that UK businesses can continue trading smoothly with the EU and the rest of the world. Ensuring compliance with the new system is vital to maintaining the flow of goods.
LWA are here to help
With the right support and adaptation, you can thrive in this evolving customs landscape, ensuring a smooth flow of goods and continued international trade relationships. At LWA, we fully embrace technological developments for businesses, and we believe the digital era of customs handling will be a key factor in the long-term success of your business.
If you need support in implementing the change whether you need specialist customs training or in relation to Making Tax Digital, we can help through our network, and via our Corporate Tax team. Email mail@lwaltd.com or call us on 0161 905 1801 in South Manchester or on 01925 830 830 in Warrington.