Test out changes to HMRC’s new Customs Declarations for traders

By Anita Jaynes on 2 July, 2021

Post sponsored by Purple Lime

Leaving the EU without a firm deal in place has meant lots of changes in a short space of time for UK traders. Moving products in and out of the EU and working out the VAT changes have proven particularly problematic, as it was something we did not even have to think about under the free trade agreement between EU states.

Now, there are new policies which have been put in place from the UK Government, and before it launches, we are being given the chance to test them out.

What are the changes to Customs Declarations?

Anyone moving goods in and out of the UK will need to become familiar with the Customs Declaration Service. This will replace the Custom Handling Imports and Exports Freight (CHIEF) platform, which allowed businesses to make their customs declaration and get their import VAT statement each quarter.

The new Customs Declaration Service is a system developed by HMRC, which should accommodate both EU and UK legislation, and any changes made to either.

The Customs Declaration Service should address some of the issues CHIEF could not cover – at 25 years old, technology and ways of doing business have changed massively from the time CHIEF was introduced. The Customs Declaration Service should provide a system fit for modern trading models.

However, as with any new system, there will be kinks to iron out, so traders are being given the opportunity to give it a trial run in the aptly named Trader Dress Rehearsal Service.

Why is there a Trader Dress Rehearsal Service?

Using the Customs Declaration Service will be a new way of working for both HMRC and traders. This trial run gives traders time to get used to the new system before it is compulsory and gives the opportunity to report any problems so that the official rollout runs more smoothly.

This is not a mandatory service, but if you do any overseas trading, it is wise to take part so that you and your business are prepared before the system is officially launched. It is free to use and easy to access, so there is no reason not to try it out!

How can I try the Trader Dress Rehearsal Service?

If you already use customs declaration software, get in touch with the developer and ask for access to the Trader Dress Rehearsal Service. If you do not have this kind of software, there is a list of providers on the HMRC website.

Once you have the software in place, you will also need:

  • An Economic Operator Registration and Identification (EORI) number
  • Any necessary authorisations and licenses
  • Knowledge of the UK Trade Tariff and of making customs declarations
  • A plan to access the Customs Declaration Service

Will this affect the VAT I have to pay?

You will still need to submit your VAT returns once a quarter. However, HMRC have recognised that many businesses are concerned about the new system and its implementation – especially if there are delays which mean the Customs Declaration Service is not producing real invoices.

Therefore, as a temporary solution, traders are being advised to continue using CHIEF to submit declarations, as well as the Trader Dress Rehearsal Service as the dress rehearsal is more for familiarisation for traders and bug-finding for HMRC.

There is extra guidance on the gov.uk website to let you know how to get a postponed import VAT statement online if you use the Customs Declaration Service, which will show the total import VAT which has been postponed from the previous month. These will normally be available by the 6th working day of the month and will be suitable for use on your VAT return.

It is a period of big change for overseas traders in the UK and HMRC, so if you need any help or advice, get in touch with Purple Lime for a free consultation by emailing hello@purplelime.uk.com, or calling on 01249 691360.

To find out more about Purple Lime visit: www.purplelime.uk.com