CUSTOMS FOR UK MOVEMENTS

Since 1 January 2021, customs formalities are required for all UK-EU and EU-UK shipments, in addition to those already needed for global shipments. Regulations are still adapting (even throughout 2022), so we recommend keeping up to date with UK Government sources: https://www.gov.uk/transition
keyboard_arrow_up

THE WAY WE DECLARE YOUR GOODS IS CHANGING

Click to load video!

Earlier this year the UK Government announced its intention to migrate the UK Customs Declarations from the current system, CHIEF, to CDS.

CHIEF (Customs Handling of Import and Export Freight) (CHIEF) will terminate on 31‌‌‌ ‌‌March‌‌‌ ‌‌2023. Declarations made on your behalf will be made through CDS (Customs Declaration Service) as it becomes the UK's single customs platform. 

Services on CHIEF will be withdrawn in two stages

➡ After 30‌‌‌ ‌‌September‌‌‌ ‌‌2022 – you won’t be able to make import declarations on CHIEF

➡ After 31‌‌‌ ‌‌March‌‌‌ ‌‌2023 – you won’t be able to make export declarations on CHIEF

The new system fulfils the UK Governments requirement for

•     A long term, more flexible, secure and stable platform,

•    Capacity and capability to grow in line with the UK’s trade plans

•    Compliance with the UK obligations as a signatory to the Union Customs Code (UCC) and with the Northern Ireland Protocol.

It also operates the full UK Trade Tariff which CHIEF cannot do.

CHIEF has served the UK well, but it is nearly 30 years old and cannot match the technology that the Customs Declaration Service offers.

CDS is currently used for both Northern Ireland declarations and Rest of World movements and has processed more than one million import declarations since August 2018.

We’re now ready for our declarants to start moving to the new system, so we wanted to give you more details to help you prepare

1. KEY CHANGES

The Customs Declaration Service offers several new services, alongside existing services, all in one place. CDS captures some information differently and the way you input data is different. Primarily, this affects how we all use the UK Trade Tariff and make finance payments

2. Tariff changes and impacts

The Trade Tariff helps you find out which forms, codes and procedures to use when importing or exporting goods.

CDS groups the information required to make a declaration into 8 groups.  Additional information may be required to enable us to make a declaration on your behalf

The eight data element groups:

  • Message information
  • References
  • Parties
  • Value
  • Shipping details
  • Goods identification
  • Transport information
  • Other

Trade Tariff information

The Trade Tariff for customs declarations using the Customs Declaration Service is the UK Trade Tariff: Volume 3 for the Customs Declaration Service (now known as the ‘Declaration, Completion, Instructions and Rules’ document).

You can also use the UK Trade Tariff tool to search for import and export commodity codes as well as the tax, duty and licenses that apply to your goods.

Changes to payment methods

The way you process your declaration payments will change with the Customs Declaration Service. How you’ll be affected depends on which of these payment methods you use. You’ll be affected if you use:

• Cash accounts

• Duty deferment accounts

• Immediate payments

• Guarantee accounts

• Individual guarantees

Cash accounts

The Customs Declaration Service uses cash accounts. These replace the Flexible Accounting System (FAS) used in CHIEF.

All traders who register for the CDS are automatically given a cash account. A trader can pay funds into their cash account and use those available funds to pay for declarations. A trader can also authorise an agent to use their cash account to pay for declarations on their behalf.  This account behaves in a similar manner to a current account and you must have deposited sufficient funds deposited in this account in advance to cover any upcoming import transactions. 

This option should not be viewed as a pay-as-you-go service and we will not be able to process any entry using this method unless evidence of sufficient funds is provided in advance.

Click here to find out more about using a cash account for Customs Declaration Service declarations

Duty deferment accounts

To help you manage your cashflow, a duty deferment account allows you to make one payment each month for any imports, rather than paying every time you import goods.

If you use a third party to do declarations on your behalf, such as a freight forwarder, customs agent or express operator, you should check with them about whether you require your own duty deferment account or if you can use their duty deferment account. 

We can offer a solution and we are happy to advise you on the approach for this.

Click here to find out how to apply for a duty deferment account.

Top-up payments

One major change which the switch to CDS will being is that once an entry is submitted the selected method of payment of import taxes cannot be amended. To ensure continuity importers will now be able to view their Deferment Account transactions via their CDS Dashboard and make top up payments to their Deferment account to cover payment of upcoming transactions.  This new feature is designed to ensure that you hold sufficient funds in your account and enable you to build in contingency. If you are approaching or reach your monthly deferment limit, you can make a payment to increase your available balance. Your payment reference for making a duty deferment top-up payment will be ‘CDSD’ followed by your duty deferment number.

Click the link to find out how to top-up your duty deferment account using the Customs Declaration Service

Immediate Payments

A trader can choose to pay at the point of making an import declaration. To make a payment on the same day or the next day, a trader can use:

  • online or telephone banking (Faster Payment)
  • CHAPS (Clearing House Automated Payment System)
  • paying with debit card or corporate credit card using the online payment service

A trader can also pay by BACs (Bankers Automated Clearing Services), which will be paid in 3 working days, or by cheque.

Your payment reference for making an immediate payment will be ‘CDSI’ followed by the specific number generated for you by Customs Declaration Service.

Note: Because our services operate continually 24/7 meaning that your goods frequently arrive outside normal operating hours, this payment option will NOT be available to customers routing their goods with Rhenus Logistics.

Click here to find more information on how to pay for imports declared using the Customs Declaration Service

What you need to do to prepare

Key actions to take to prepare for using the Customs Declaration Service.

  • If you have not already done so, you should register for CDS though your Government Gateway account.  If you are using Postponed VAT Accounting, you should already have access because it is required to access and download your Postponed VAT statements Get access to the Customs Declaration Service
  • Do not cancel your old Direct Debit Mandate with HMRC for CHIEF as this may still be required by HMRC after the transition to CDS has been made.

If you have any questions about the new Direct Debit instruction you can contact [email protected]

  • If you have not already done so, you must authorise Rhenus Logistics to use your Duty Deferment Account when making declarations in CDS on you behalf. You can do this from your CDS dashboard (Deferment options) by adding our EORI Number, GB146892628000 to the list of authorised agents. If you intend to authorise Rhenus on a specific import basis, you must provide Rhenus with a form C1207S with your import clearance request.

  • If you wish to account for import duty / VAT using your CDS Cash Account, you must ensure that we are authorised to use it. More information on CDS cash accounts including how to pay into your cash account
  • whether your business details (email and business address) match our records, or if they need updating
  • understand the changes to the Import and Export Tariff
  • Once we begin to clear your goods in CDS using your Duty Deferment Account it is important that you monitor your transactions via your CDS dashboard to ensure that you hold sufficient funds to account for any taxes due
  • If you are not already doing so, we strongly recommend that you account for your import VAT using Postponed VAT Accounting (PVA)

Please note that if you have not undertaken the necessary preparations, we will not be able to process your declarations in CDS.

Rhenus Logistics can offer you inclusive customs solutions for goods we manage on your behalf. Please feel free to contact your local branch or account manager for support.

MOVING YOUR GOODS BETWEEN THE UK AND THE EU

In order to qualify for preferential tariffs rates on goods moving between the UK and the EU that have either a UK or EU origin you must ensure you include a declaration of origin on your commercial invoice. This has been detailed in full at the top of this page, and can also be found on the second page of our sample commercial invoice below. You do not need to include this export declaration relating to origin on your commercial invoice if none of your goods are of UK or EU origin.

PROVIDE A COMMERCIAL INVOICE; CLICK HERE FOR AN EXAMPLE

You will need to provide us with the value, origin, gross/net weight, commodity code and what terms you are shipping under (Incoterms) for all shipments.

FIND OUT MORE ABOUT TARIFFS, VALUE, ORIGIN AND WEIGHT

Please let us know if you intend to make use of postponed VAT accounting or a deferment account. You should do this by ticking the appropriate box on our Power of Attorney form (step 1). If you are using another broker, and therefore not completing our PoA form, please provide us with your preferences and permission to use them in writing at the time of booking.

CLICK HERE TO FIND OUT MORE ABOUT POSTPONED VAT ACCOUNting

CLICK HERE TO FIND OUT MORE ABOUT DEFERMENT ACCOUNTS  

UNDERSTANDING RULES OF ORIGIN

UK businesses trading with the EU can claim a duty waiver on their goods when exporting to, or importing from the EU.  This means that a zero duty rate and zero quota will apply to goods that comply with the appropriate rules of origin.  This is known as Preference.

The rules surrounding origin have become a stumbling block for many UK and EU businesses since the introduction of customs on 1 January 2021. To ensure you take advantage of the preferential tariffs for goods with either a UK or EU origin, you must include the below statement confirming origin as part of your commercial invoice on all goods with UK or EU origin.

Statement of origin:

The Statement on Origin (commonly referred to as the Declaration of Preference), as prescribed by the EU-UK Trade and Continuation Agreement is below.  It is important that businesses understand and complete the Statement correctly

(Period: from___________ to __________ (1))

The exporter of the products covered by this document (Exporter Reference No ... (2)) declares that, except where otherwise clearly indicated, these products are of ... (3) preferential origin.

…………………………………………………………….............................................(4)

(Place and date)

…………………………………………………………….............................................(5)

(Name of the exporter)

Note number

Comment

1

If the statement on origin is completed for multiple shipments of identical originating products, indicate the period for which the statement on origin is to apply. That period shall not exceed 12 months. All importations of the product must occur within the period indicated.
If a period is not applicable, for example, the statement is being applied to a single shipment; the field may be omitted or left blank.

2

Indicate the reference number by which the exporter is identified.
For the EU exporter, and for shipments with a value threshold over EUR 6000.00 (GBP 5800.00) this will be the exporters assigned Registered Exporter (REX) Number. Where the value of the shipment is below the threshold the number may be left blank.
For the United Kingdom exporter, and regardless of the shipment value, this will be the EORI number assigned to the Exporter.
Where the exporter has not been assigned a number, this field may be left blank.

3

Indicate the origin of the product: the United Kingdom or the Union.
For the UK exporter, accepted values: United Kingdom, UK, GB *
For the EU exporter, accepted values: European Union, EU, UE

4

Place and date may be omitted if the information is contained elsewhere in the body of the document itself containing the Statement of Origin.

5Indicate the name of the legal entity to which the Exporter Reference Number is assigned.
Where the Exporter Reference Number has been left blank, the full address of the legal entity should be added, particularly if such details are not included elsewhere in the body of the document containing the Statement of Origin.

 

Click here to view a sample commercial invoice with a declaration of origin.

Further information of claiming preferential rates of duty for goods with a UK or EU origin can be found on the UK Gov website here.

Rules of origin

To claim preferential rates of duty, your product must originate in the EU or UK (as the exporting country). You are allowed to include goods originating from the Rest of the World (ROW) however there are strict guidelines per commodity as to what percentage of ROW goods can be used in the manufacturing process for the goods to still qualify for preference. 

Goods of different origins in the same shipment

You can claim preference for different goods on the same document. You’ll need to clearly identify the goods that are originating and non-originating. There is no fixed method for doing this - the only requirement is that those goods are clearly indicated.

Example if you have Chinese origin goods, French origin goods and GB origin goods in the same shipment, you must identify the origin per goods line.

The rules of origin allow for GB and EU goods to qualify for preference, so the goods of GB and FR goods will attract a zero duty rate (as long as not a product with a commodity code which attracts duty regardless), the goods of Chinese origin will incur duty…your still apply the statement of origin to the whole invoice.

Proving origin

To benefit from preferential tariffs when importing into the UK from the EU (or importing into the EU from the UK), the importer is required to hold proof that the goods comply with the rules of origin.

You’ll be entitled to claim the preferential rate of duty if you have either:

  • a statement on origin that the product qualifies by nature of its origin made out by the exporter and displayed in a commercial export document (usually the commercial invoice)
  • the importer’s knowledge that the product is originating

Importers knowledge – what does it mean?

‘Importers knowledge’ allows the importer to claim preferential tariff treatment based on evidence they hold about the originating status of imported products. This evidence must be in the importer’s possession, be in form of supporting documents or records which may be provided by the exporter or producer and provide evidence that the product qualifies as originating.

As the importer is making a claim using their own knowledge, no statement on origin has to be provided by the exporter or producer, but the importer must inform us if they intend to claim preference using this method so that we can clause the import declaration accordingly. You need to be confident that the goods meet the rules of origin and if prompted by customs the importer you must make every effort to obtain suppliers declarations retrospectively. You are currently allowed to use Importer’s Knowledge until 31/12/2021.

Statement on origin and the Exporter’s Reference Number.

As previous e-mail, the text for a statement of origin is below. It can be found in Annex ORIG-4 of the EU-UK Trade and Cooperation Agreement

When exporting to the EU you must include your EORI number in any statement you issue to your EU customer, regardless of the value. For example shipping from UK to ROI.

You do need to insert your EORI number into the statement of origin even though it appears elsewhere in the document.

When exporting from the EU to the UK a statement of origin can be inserted into the commercial invoice by the EU supplier/exporter where the value of the consignment is 6,000 euros (currently £5,700) or less. It does not need an Exporter Reference Number.

If the value of the goods is above this amount the EU exporter must have a Registered Exporter (REX) number and include it in the statement. This is important to consider if you are creating a commercial invoice, where preference is claimed, on behalf of your German business for example.

ENSURE YOU SPEAK WITH YOUR CLIENTS AND SUPPLIERS:

Additionally, UK traders must speak with their clients and suppliers to obtain the following:

  • Their EU EORI Number.
  • Details of any appointed customs broker.
  • If no appointed broker, will they empower Rhenus as their Broker/Direct Representative?
  • Are they going to pay Duty/VAT or will they require a deferment facility?
  • Will they clear goods on-site or via our hub.
  • If clearance on-site, what is their customs office of destination.

    CONSIDER THE PACKAGING YOU ARE USING:

    Wood packaging material must now meet ISPM15 International Standards when shipping to the EU from GB (excludes NI). This involves being heat treated and marked. Although with freight, this primarily applies to wooden pallets, it is needed for all raw wooden material over 6mm thick, so may include additional packaging.

    You will need to ensure any wood packaging is compliant, or you may consider using alternative materials; corrugated, plastics etc.

    More information can be found here

    Need more Information?

    Our dedicated teams across the UK are focused on providing a seamless service together with our customers, so we hope you can use the information above to ensure your shipments are ready to transport.

    If you have any specific queries you can get in touch: