BIFAlink August 2022 - CDS supplement

Special Pull-Out & Keep Guide

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Customs Declaration Service (CDS): AN OVERVIEW HM Revenue & Customs (HMRC) has published numerous guides designed to assist users making the switch to the new Customs Declaration Service (CDS), most of which are available on GOV.UK The aim of this guidance is to provide an overview of the new CDS system and to highlight the main differences between the incoming system and CHIEF. Undoubtedly, aside from the difference in the interface, the additional data required makes CDS declaration completion more challenging compared with a CHIEF entry submission.

In this document BIFA has collated the most useful information sources that are recommended for use while completing a CDS declaration. Basic information The below link collects introductory guides related to import, export, duty payment options and also a description of the CDS Movement reference number (MRN). www.gov.uk/government/publications/customs-declaration- service-communication-pack?utm_medium=email&utm_campa ign=govuk-notifications-topic&utm_source=30758a10-c373- 4439-8936-25f3afa0210c&utm_content=daily Useful checklists indicating what steps must be completed in order to sign up for the Customs Declaration Service can be found here:

Moving to Customs Declaration Service Checklist

For DECLARANT www.gov.uk/government/pu blications/customs- declaration-service-commu nication-pack/declarant- checklist-moving-to-the-cus toms-declaration-service

For TRADER www.gov.uk/government/pu blications/customs- declaration-service-commu nication-pack/trader- checklist-moving-to-the-cus toms-declaration-service

Information about the Customs Declaration Service related to accessing the CDS, making payments and submitting live/training declarations can be found at: www.gov.uk/government/collections/customs-declaration- service CDS Movement Reference Number (MRN) Document The C88 and the E2 documents available in CHIEF are replaced by a combined MRN document in CDS. Please use

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the following link to see the format of the document which is agreed by the majority of the software providers. Furthermore, the document guide contains detailed technical description and example templates of the MRN documents. The document is available to view via the following link https://bifa.org/media/4924452/cds-recommended-import- declaration-layout.pdf Detailed entry completion guide The most important information source for completing Customs declarations in CDS is the UK Trade Tariff: volume 3 for CDS. www.gov.uk/government/collections/uk-trade-tariff- volume-3-for-cds--2 The information required in the CDS declaration is divided into eight distinctive data groups consisting of a number of data elements (DE). The following links list all the data groups and give detailed explanations of each data element of the specific data group:

Additional declaration completion guidance and technical assistance can be found in the ‘Tariff Volume 3 Great Britain Supplement CDS and CHIEF’, issued by HMRC. It includes the 2022 requirements where these differ or where changes to standard practices are applicable. The supplement is constantly updated and needs to be used in conjunction with the Trade Tariff Volume 3 for CDS. The document is available for download here: www.gov.uk/government/publications/customs-declaration- completion-requirements-for-great-britain Customs procedure code One of the most significant changes in the CDS compared with CHIEF is the requirement to build the Customs Procedure Code based on circumstances. The procedure codes in CDS are split in two parts: a single four-digit Procedure Code (DE 1/10) which has to be combined with a three-digit Additional Procedure Code (DE 1/11). Information regarding the four-digit Procedure code (DE 1/10) can be found here: www.gov.uk/government/publications/appendix-1-de-110- requested-and-previous-procedure-codes-of-the-customs-dec laration-service-cds/appendix-1-de-110-requested-and- previous-procedure-codes-introduction-and-index-list Information regarding the three-digit Additional Procedure code (DE 1/11) can be found using the following link: www.gov.uk/government/publications/appendix-2-de-111- additional-procedure-codes-of-the-customs-declaration-servic e-cds/appendix-2-de-111-additional-procedure-codes- introduction-and-index-list In order to see which three-digit Additional Procedure Code (DE 1/11) can be used with the appropriate four-digit Procedure code (DE 1/10) please use the Correlation Matrix which is available for download via the following link: www.gov.uk/government/publications/4-digit-to-3-digit-procedure- to-additional-procedure-code-correlation-matrix-for-cds

IMPORT Group Guide www.gov.uk/government/pu blications/cds-uk-trade- tariff-volume-3-import-decla ration-completion-guide

EXPORT Group Guide www.gov.uk/government/pu blications/uk-trade-tariff- cds-volume-3-export-declar ation-completion-guide

The above links provide information regarding how to complete a CDS Customs declaration. They provide detailed information and explanation by the relevant groups within the entry, eg Group1 – Message information (including Procedure Code). This includes information regarding the relevant data elements contained within each group. Detailed step-by-step guides to completing CDS Customs declarations can be found via the following links:

IMPORT Guide www.gov.uk/guidance/navig ate-the-uk-trade-tariff-cds- volume-3-for-imports

EXPORT Guide www.gov.uk/guidance/navig ate-the-uk-trade-tariff-cds- volume-3-for-exports

This should be read in conjunction with the Import/Export Group Guide which provides information listed by group and subject matter

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Supporting documents For situations where the National Clearance Hub (NCH) requests additional documentary checks, CDS offers the opportunity to upload the supporting documentation directly and eliminates the need for sending copy documents by email to NCH. The documents can be uploaded using the following link: www.gov.uk/guidance/send-documents-to-support- declarations-for-the-customs-declaration-service CDS error codes When a CDS entry is submitted with incorrect data element information, the system will generate an error code. The error code aims to notify the user what information was submitted incorrectly and what actions are required to overcome the problem and successfully submit the entry. The full list of error codes can be accessed via: www.gov.uk/government/publications/customs-declaration- service-error-codes Further assistance can be requested by contacting HMRC support team: For Trade dress rehearsal entries: TDRcommunications@hmrc.gov.uk For live CDS entries: Financial impacts The Customs Declaration Service offers multiple options to the user to remit Import VAT and/or Duty payments. The three main payment methods are: • Cash Account • Immediate payment • Duty deferment account isbc.eoricontact@hmrc.gov.uk and cds.operations@hmrc.gov.uk There are alternative payment methods for certain regimes where General Guarantee Accounts (GGA) can be used to allow traders to release goods without payment of a deposit. Members should carefully check the criteria and circumstances when this can be used. In HMRC’s own guidance, the following examples are provided: • When moving goods no more than three times a year using Common or Union Transit,

• When using authorisation by declaration to put goods into Customs special procedures (inward processing, temporary admission or end use) no more than three times a year. Further information regarding General Guarantee Accounts (GGA) can be found at www.gov.uk/guidance/apply-for-a- general-guarantee-account-and-pay-disputed-amounts Before choosing the method of payment for a declaration it is essential to remember that in CDS the Method of Payment cannot be changed after the entry has been accepted by HMRC. If an entry is rejected due to insufficient funds the only options available are to make additional payments into the relevant account (Cash or Deferment) usually by bank transfer or cancel the original entry and re-enter using an account with sufficient funds in it. HMRC guidance refers to the ‘CDS Financial Dashboard’ as the web interface that can be used to add additional funds,

‘View your Customs Financial Accounts’, pictured below, needs to be

accessed to complete the transaction

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however it is the web page named ‘View your Customs Financial Accounts’ which needs to be accessed to complete the transaction and can be accessed via the following link: www.tax.service.gov.uk/customs/payment- records?_ga=2.204739600.18194638.1656319653-163236296 2.1638523190 Each user registering for CDS with a deferment account must set up a new direct debit instruction for the deferment account in CDS. Furthermore, the user needs to establish a new guarantee or apply for a waiver. Also, the Customs Financial Accounts page can be used to: • Grant or cancel authorisations to use the account for payments; • View Import VAT certificate (C79);

In addition, detailed guidance regarding Completing CDS Declarations is available on the ASM website here: https://help.asm.org.uk/sequoia/user-guides/guides/decln- cds/import-cds-declarations/ Most important points The KEY facts for the reader to be aware of are: • That a new direct debit instruction is required for deferment accounts following the successful CDS registration; • A Customs Comprehensive Guarantee (in most cases) is not required for the deferment account; however, a guarantee waiver must be granted; • Authorisation is required via the CDS dashboard to use someone else’s cash/deferment account or guarantee; • New format IPR/OPR authorisation references must be obtained for CDS declarations; • Method of payment cannot be changed after the CDS declaration is submitted; • Ensure you have sufficient funds on your accounts prior to goods arrival at the UK border. Cash/deferment account top- up can take up to 48 hours; • Postponed VAT accounting (PVA) is no longer declared at item level in CDS. Conclusion As might be understood from the information contained within this guide, CDS is a complex system based on interlinked data elements. The amount of information and the connection between the information components increases the chances of the entry being rejected, requiring additional work and time to amend the data and successfully re-submit the entry. Therefore, we strongly recommend commencing the transition from CHIEF to CDS as soon as possible by getting familiar with the requirements of each data element and submitting test entries via the Trader dress rehearsal service www.gov.uk/guidance/using-the-trader-dress-rehearsal-service which aims to mimic the live entry submission process. Disclaimer: All information was accurate at the time of writing. However, HMRC is making regular modifications to CDS, therefore certain information and processes may change. We suggest you regularly check GOV.UK for information.

• View postponed import VAT statements; • View notification of adjustment statements.

Greater complexity Why a CDS entry is more complex? • CDS is a move away from using paper-based rules on CHIEF to data processing rules; • CDS requires completion of 76 data elements for import and 65 data elements for export; • Most data elements in CDS are restricted to code format, other than name and address fields; • Three boxes on CHIEF may equate up to 17 different data elements on CDS; • CDS Procedure Codes (CPC) are multiple, interchangeable combinations depending on circumstances. In order to understand the relationship between CHIEF box numbers and CDS Data Elements, please use the CDS Data correlation Table, available here: https://bifa.org/media/4878814/106503_cds_data_element_cor relation_table_v4.pdf Additional comments ASM offers useful information entitled ‘Getting started with CDS declarations’ https://help.asm.org.uk/sequoia/user-guides/guides/decln- cds/getting-started-cds-declarations/

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