Since the colonial era, the United Kingdom (UK) has been a major player in worldwide import and export trade. The UK imports a large amount of goods, FMCGs (Fast Moving Consumer Goods), and machinery to meet the needs of its citizens, SMEs (Small to Medium Enterprises), and to facilitate trade, while simultaneously exporting a large amount of precision goods such as industrial machinery, motor vehicle parts, and pharmaceuticals.
Many businesses are encountering new hurdles now that the UK has exited the European single market, including importing and exporting between the UK and the EU, where customs declarations are now required. This not only adds to the administrative load, but it also complicates trading.
Imports and exports are important to HMRC for a variety of reasons, including compiling trade statistics for the UK and the EU, ensuring a balance in trade figures for imports and exports so that the trade balance between the two figures is closed, enacting strict policies on the prohibition of certain goods, and, of course, ensuring correct payment of any duties and/or value-added tax.
Many businesses are choosing to hire a third party to handle customs and border regulatory compliance, either by combining declarations with other services like logistics or employing a customs broker or agent. While this may be the ideal solution for some organisations, others complain about the high costs and lack of transparency associated with customs procedures. The common belief is that outsourcing customs relieves the perceived pain of these new requirements, but the liability often remains with the importer or exporter, and much of the data needed to complete a declaration must be provided by the businesses regardless of who completes the declaration.
Since 2015, HMRC has been working to transition from its historical customs system, CHIEF, to the new Customs Declaration Service (CDS), which is compliant with EU and World Customs Organisation regulations. The migration from CHIEF to CDS is currently in progress, and CDS is presently accepting customs declarations. Previously, access to and use of CHIEF was restricted to licenced brokers or intermediaries, or businesses who implemented specialist software that integrated with CHIEF. By digitising the service and making it available online, CDS has created the potential for this business to be disrupted. CDS allows traders to conduct their own customs declarations and integrate the customs process into their existing supply chain when combined with a new breed of easy software platforms.
This is a significant win for smaller businesses with less customs requirements. Traders can now complete a customs declaration utilising digital systems like tradePhlo that are intuitive and streamlined enough to help a user through the procedure, whereas before their only choice was to train to become an expert. This type of ground-breaking technology, which puts control in the hands of traders, has the potential to radically change the old customs broker model for small enterprises. Today, a trader can directly use a customs declaration software like tradePhlo which lets you complete a custom declaration starting at £7 per declaration and in just 10 – 15 minutes. Hence, it is safe to say that if traders wish to make the best out of this shift from CHIEF to CDS, this is the right time for them to take control of their customs declarations.