We outlined HMRC’s plans to update the UK’s customs system for tracking the movement of goods back in May, from the Customs Handling of Import and Export Freight (CHIEF) to the Customs Declaration Service (CDS).
As of 1 October 2022, the CHIEF system no longer accepts customs import declarations and businesses that import goods into the UK must use the new CDS.
CHIEF will also cease to be used for exports, but from a later date of 31 March 2023.
Continued use of CHIEF on an exceptional basis
In a recent update, HMRC have announced that businesses may temporarily continue to use CHIEF beyond this deadline provided that they have obtained (or at least requested) permission from HMRC to do so.
In considering whether to grant permission, HMRC will consider a business’s commitment to moving to CDS, how long it needs temporary permission for, and whether there is a reasonable justification for requiring continued access.
Action is required by all affected businesses that import goods into the UK, even those that use customs agents.
What you need to do to register for CDS
If you haven’t already done so, you’ll need to register for the CDS. This will allow you to:
- Submit import and export declarations using software (if submitting directly)
- Get your postponed import VAT statements (MPIVS) or get your import VAT certificates (C79s) so you can complete your VAT return
- Pay Customs Duty and import VAT (if applicable).
You’ll need the following before starting the application:
- a business government gateway account
- an Economic Operator Registration and Identification (EORI).
- Unique Tax reference Number (UTR) or National insurance (NI) number (if sole trader)
- Business address held for customs records
- Date your business started.
You can subscribe to the CDS here.
You must register for CDS and ensure you have all of the different elements to make a submission in place, including methods of payment and commodity codes.
Postponed VAT accounting
A VAT-registered importer can continue to use Postponed VAT Accounting (PVA) on all customs declarations, including supplementary declarations. PVA allows importers to avoid paying VAT at the border and instead allows the required import VAT to be accounted for on the importer’s VAT return. The monthly postponed import VAT statements are available from the CDS.
Previously, the evidence required to support an input tax claim for imported goods was a C79 VAT certificate issued by HMRC. C79s continue to be important in post-Brexit Britain, but a C79 is now only required if VAT was paid by the importer when the goods arrive at the border.
In cases where Postponed VAT Accounting is used, the relevant document issued by HMRC is a Monthly Postponed Import VAT Statement (MPIVS). Both documents are issued monthly by HMRC and will now be available from the CDS online.
How can CT help?
If you import goods into the UK and have concerns about this transition, CT’s specialist VAT team can offer advice and further guidance on how to be prepare for these changes. Please get in touch with a member of our VAT Team at firstname.lastname@example.org or call on 0131 558 5800.