Major Changes to Import & Export Rules | Blog Item | PKF Francis Clark
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Major Changes to Import & Export Rules

If your business is involved in the movement of goods to or from the UK, you are likely to be affected by major changes to the Customs regime operated in the UK. HMRC has begun to issue guidance on two core issues:

  • Preparations for trading businesses in the event of a no deal Brexit
  • The launch of the Customs Declaration Service

Below, we set out further information and guidance that can help you to understand what this means for your business and what actions you may wish to take.

1. Preparations for trading businesses in the event of a no deal Brexit

HMRC has issued a letter that sets out three recommended actions that any business can take to avoid being caught out if the UK leaves the EU with no transition period on 29 March 2019. The letter was sent to businesses that have previously traded (bought or sold) goods with the EU and is available here:

HMRC Letter to EU Only Traders

Below we detail the recommendations set out in this letter

1.1 Register for a UK Economic Operator Registration and Identification (EORI) number

An EORI is an Economic Operator Registration and Identification. This number is used to identify your business in international trade of goods. Without an EORI, you will be unable to sell goods outside of the UK. EORIs are normally issued within 3 working days but this processing time may drastically increase if a No-Deal scenario increases in likelihood. There are three different electronic applications that can be completed, depending on the status of your businesses (VAT Registered, Non-VAT Registered Import/Export and Non-VAT Registered Export only). The information required on the application is very basic and none should take more than 10 minutes to complete. Further guidance and links to the applications can be found here:

1.2 Decide whether to use a customs agent to make import and/or export declarations or to make the declarations themselves using specialist software

If you import or export goods, you must complete a report (known as a Declaration) for every consignment. This Declaration is transmitted to HMRC and details a range of data fields such as Value, Commodity Code, Customs Procedure, Country of Origin etc. If you currently only buy and sell goods to the EU a No Deal Brexit means that you will have to start submitting these declarations once we leave. This is a time consuming process so many businesses choose to outsource this to a Freight Forwarder but you should be aware that liability for correct entries remains your responsibility unless there is a specific agreement that this will be shared. Businesses should make sure they have arrangements in place as soon as possible to ensure continuity of supply. Any businesses wishing to submit their own declarations may be interested in applying for a HMRC grant to help fund training and set up costs, details of which can be found here:

1.3 Contact the organisation that moves their goods (for example, a haulage firm) to find out if they will need to supply additional information to complete safety and security declarations, or whether they will need to submit these declarations themselves.

Freight Forwarders should have arrangements in place but you should make sure you are happy you know what you need to provide. Any consignment that does not have the correct supporting documentation can be impounded or destroyed.

Commodity Codes

One of the most worthwhile preparations you can perform has not been addressed by HMRC but is worth emphasising. You must ensure that the commodity code classifications of any current (or soon to be) imports and exports are correct. Classification is the basis for customs compliance. A simple mistake can quickly lead to significant unpaid liabilities and penalties. Classification is a long and time consuming process that involves following six mandatory rules issued by the World Trade Organisation, detailed examination of composition and reference to supporting notes and case law. The prevalence of basic text search tools makes it all too easy for an error to occur. The code is the basis for determining the customs duty liability and compliance “measures” that must be followed.

2. The launch of the Customs Declaration Service

You may have received a letter or email from HMRC announcing the launch of the Customs Declaration Service (CDS).

The information provided on a Customs Declaration provides the basis of calculating the Customs Duty Liability and the monitoring of international trade. For over two decades, HMRC has recorded and administered this data through the CHIEF (Customs Handling of Import and Export Freight) system. HMRC has announced that CHIEF will be replaced by CDS (Customs Declaration Service), which is already in phase 2 of its launch.

The requirement to submit a declaration (as detailed in point 1.2 above) is expected to drastically increase the number submitted each year. Current estimates suggest a rise in the annual total of declarations from 55 Million to 255 Million. Plans for CDS pre-date the Brexit vote and fall into the UK strategy to modernise Customs compliance to align with the EU’s Union Customs Code. The Brexit vote expedited plans as CHIEF is an aging system which simply does not have the capacity to cope with the predicted influx.

If you intended to buy goods from any overseas supplier or sell goods to overseas customers you should:

  • Visit the Customs Declaration Service page on HMRC’s website to understand how the changes affect your business and what you will need to do to prepare for the introduction of CDS and when. This includes making sure you have a Government Gateway account and an EORI number.
  • Review the changes to the Tariff for CDS. A new Trade Tariff will be used for declarations on CDS to comply with the Union Customs Code (UCC) so it is important you take the time to understand how the information you provide as part of your declarations will change. The imports tariff can be found on GOV.UK via the link above. The exports Tariff will be available later in the year.
  • Where external software or a Freight Forwarder is used, check that preparations are in place and check to see if they are going to increase charges.
  • If you use a C88 form or the National Export System to make declarations, please visit the web page above where you can find more information.


CDS offers a centralised suite of services that will allow traders to:

  • View previous import and export data on pre-defined reports. A service previously only available by paid subscription
  • Check the tariff
  • Apply for new authorisations and simplifications
  • Check their duty deferment statement
  • Find online help, including self-service tools, guides and checklists.
  • View an electronic version of the C79


CDS is being implemented over three phases.

Phase 1: August 2018 – CDS for Certain Supplementary Declaration (Limited Trial of selected Importers)

Phase 2: November 2018 – Launch of CDS for Import Declarations

Phase 3: March 2019 – Launch of CDS for Export Declarations

If you would like to discuss any of the above points, please do not hesitate to contact us.

FEATURING: Liam Dushynsky
Liam is an Indirect Tax Partner specialising in VAT, Customs Duty and other indirect tax matters. Liam joined PKF Francis Clark in 2005 as part… read more
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