Step-by-step guide for UK traders

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Starting Customs Clearance in the UK

Introduction: Why this matters to you

Are you a UK-based company that was never required to do customs declarations? Do you only trade goods within the European Union (EU) at the moment?

If the answer is yes, you have been notified by HM Revenue and Customs (HMRC) with a published series of letters to EU-only traders in the UK that launched in September2018.

Once the UK is no longer part of the EU and its Customs Union, customs declarations to HMRC will be required when importing from or exporting to EU countries. 

So, what do you need to do to be prepared?

CHIEF or CDS? The systems you need to know

HMRC’s IT system for processing customs declarations is called CHIEF (Customs Handling of Import and Export Freight). CHIEF is a very old application that is scheduled to be replaced by a new system called CDS (Customs Declaration Service).

The CDS system rollout has already begun. This is initially limited to a few selected pilot traders using only Supplementary Import declarations. HMRC, CSPs, and software companies (including AEB) are gearing up to roll out full import and export processing in the new system during 2020.

You can keep up to date on the current status by registering on the UK government website here – HMRC provides videos, webinars and email alerts – and by signing up to AEB’s newsletter.

Official UK government references

Preparation: Six steps to get started

Step 1: Get an EORI number

Before you can start trading goods with other countries, your company is required to have its own Economic Operator Registration and Identification (EORI) number in place:

  • Before applying for an EORI number, you should check whether you need to register with HMRC for Value Added Tax (VAT) –  you can do this here. VAT is directly paid to HMRC.
  • Apply for an EORI number, in case you don’t have one yet. The application form can be found on the dedicated government website here. You will receive your company’s EORI number by email, normally within 3 working days.

Note: The process for registering for an EORI is likely to change under CDS to an electronic process which should remove any delays. Sign up to AEB’s newsletter. to stay informed about developments.

Step 2: Weigh your options

Outsourcing

Consider how you want to submit your customs declarations. You can, for example, engage a freight forwarder, or a customs broker, or a courier service to do import and/or export customs declarations to HMRC on your behalf.

You can read more about this option in this article in our Magazine. Efficient service collaboration relies on digital processes - learn more about Customs Broker Integration solutions. 

Self-Filing

The other option is self-filing, which means your company will manage its customs declarations by itself. For this, you will need to “acquire the appropriate software and secure the necessary authorisations from HMRC” – in line with the HMRC guidance Trading with the EU if there is no Brexit deal of September 17, 2018. 

This option is not as complicated or costly as you might think. It is worth investigating whether there is a strong business case before dismissing self-filing as an option.

Regardless of whether you use a broker or opt for self-filing, the following points are critical to set up the right foundations for submitting customs declarations.

Step 3: Know which customs procedures apply to you

You may want to take advantage of special customs procedures available to your business. Please refer to HMRC Notice 3001 which details these procedures and respective qualification requirements.

You may be required to provide a history of compliant importing and/or exporting before you can benefit from some of these special procedures. AEB can support you in demonstrating compliance to HMRC as part of the application process – learn more about Export Filing and Import Filing with AEB.  

Step 4: Know the commodity codes of your goods

The customs code (or commodity code) of your goods determine which taxes and regulations apply to them. You can find the official classification published by the UK government here:

As part of the classification process, you will need to study “Volume 3” for additional information that you will require to complete the customs declaration.

Product classification can get complicated. AEB offers tools to support you in the classification process of your materials. Find out more about Product Classification with AEB. 

Step 5: Know about license requirements

The type of your goods also determines whether you need an export or import license. For instance: dual-use goods, controlled goods, plants, and animals all require licenses. You should therefore examine your goods carefully and apply for licenses if needed. The following government links are useful in the process:

AEB can support you in capturing your licenses and ensuring they are in place and you are compliant – long before an export is made. Find out more about License Management with AEB. 

Step 6: Storing data for efficiency and compliance 

It’s important to store your data relevant for importing and exporting – such as commodity codes, EORI number, incoterms – correctly and up to date in your company’s systems from beginning on.

This forms a crucial foundation for efficiency and compliance in customs management today. Please bear in mind that not all ERP (Enterprise Resource Planning) systems are able to efficiently manage customs- or international trade-specific data and an integrated customs software solution may support your business best.

Find out how Customs Management solutions from AEB can support your individual business needs and help you start things right in all areas of customs. Including Export Filing, Import Filing, and Customs Broker Integration – and all relevant processes from Product Classification and Supplier Declaration Exchange to Export Controls

Start: How to submit customs declarations

In the digital age, all import and export declarations to HMRC need to be submitted electronically. Your company therefore needs to have access to the government’s customs systems in order to engage with HMRC for importing and exporting.

With reference to the previous chapter "CHIEF or CDS" about the UK customs systems you need to be familiar with, the system you need to apply for will depend on when you wish to start importing and/or exporting.

The current HMRC deployment schedule for the system transition from CHIEF to CDS is planning the full operation on the new CDS system before the end of March 2019. In detail, imports are expected on CDS by the end of November 2018 and exports in March 2019.

If you wish to start importing and/or exporting before these dates, or if the CDS deployment dates move beyond the Brexit deadline, you will need to register to use CHIEF initially. If this is relevant to you, please refer to the next chapter (5) for more details on how to proceed. If you wish to start later, you can go directly to chapter 6.

System Access

Getting started on CHIEF  

In order to submit customs declarations to the CHIEF system, you need to register for direct access by completing form PA7 as published by HMRC. You can do this here.  

  • Once you have completed form PA7, you can email the document to HMRC’s CHIEF Operations (chief.operation@hmrc.gsi.gov.uk). 
  • In response, HMRC CHIEF Operations will send you a "CHIEF Role and Location" by email. 
  • You will need to create a Government Gateway account online here and link the CHIEF Role and Location to your Gateway account.
  • Once complete, you can start submitting export declarations to HMRC’s CHIEF system.

Export: Register for NES

The National Export System (NES) is part of CHIEF. Electronic export declarations are submitted through NES. 

Getting started on CDS  

HMRC is implementing the system transition from CHIEF to CDS in 3 stages, with the final stage planned to be completed in early 2019:

  • A group of importers has started making declarations on CDS in August 2018.
  • Full import functionality for all importers will be available on CDS from November 2018 on.
  • Exporters will be able to use CDS at a later date.

Please note: these dates are subject to change by HMRC. Please look back here for updates or sign-up to the AEB newsletter.

Registration for CDS

Similar to the CHIEF registration process in the previous section, you will also require a Government Gateway account to register for CDS. You only need to apply once for a Government Gateway account because the UK government operates a “ROSM” principle – Register Once Subscribe Many. This allows you to submit your information once and register for different services.

Once you have a Government Gateway account you will need to log-in and register to use CDS. If using your own or third-party software to submit your customs declarations, you will need to authorize the software accordingly.

AEB’s software automates this last step – find out more about Customs Management solutions or go directly to Export Filing, Import Filing, or Customs Broker Integration.

Coming soon: AEB will shortly publish information about UK customs data requirements. This guide will support traders in understanding what data needs to be provided in a customs declaration . Sign up to AEB’s newsletter to get the news once it’s published.

Global Trade Software makes it happen: How AEB can help  

For over 40 years, AEB has developed software to support the global trade and logistics processes of businesses in the industrial, commercial, and service sectors. More than 5,000 customers are using AEB solutions in over 75 countries for transport and warehouse management, multi-country customs processes, export controls and trade compliance management, and much more. 

Iqubal Singh Pannu, Senior Solutions Consultant, AEB
Iqubal Singh Pannu, Senior Solutions Consultant, AEB
Uwe Henning, Director International Business Development, AEB

Iqubal Singh Pannu

Senior Solutions Consultant

"Managing all cross-border trade in a single system used to be just a dream. AEB’s comprehensive all-in-one customs solution has now turned the dream into reality."

Talk to an expert about your customs software solution requirements