HM Revenue & Customs (HMRC) is calling on UK businesses to migrate their customs reporting to a new IT platform that is set to replace the Customs Handling Import and Export Freight (CHIEF) system on 31 March 2023.
The Customs Declaration Service (CDS) has been in the works since 2014, demand for which has intensified following the UK's decision to leave the EU.
CHIEF has been criticised for being unsuited for the post-Brexit age due to its limitations of being able to process only 60 million customs declarations a year. This is almost five times less than the 270 million additional customs declarations per year anticipated by HMRC from UK companies for the import of EU goods.
CDS, on the other hand, will be able to handle an estimated 255 million declarations per year. Since being launched in 2018, the platform has processed more than 2.5 million declarations to date, HMRC announced on Thursday.
After running parallel to CHIEF for five years, CDS will become the UK’s main customs IT platform. CHIEF is expected to be turned off on 30 September 2022 after almost three decades in operation. Due to system migrations for larger businesses potentially taking up to six months, HMRC is asking organisations to begin the move now.
Commenting on the announcement, HMRC directors general for Borders and Trade, Katherine Green and Sophie Dean, said that CDS will provide HMRC with “the capacity and capability to grow in line with the Government’s ambitious trade plans and to have the world’s most efficient customs system by 2025”.
“We know the introduction of new rules can be challenging and appreciate all the efforts industry has already made to keep goods flowing. We understand a system change can take time which is why we are asking businesses to start the migration process now. We’ll do everything we can to support businesses to get this right. Help is available online, through our guidance on GOV.UK, our webinars and over the phone,” they added.
Last month, HMRC faced criticism after a scathing National Audit Office (NAO) report revealed significant inconsistencies in the implementation of IR35 tax reforms.
