When Britain finally left the EU with a vague deal in place, a lot of changes began to happen quite quickly. Among them were the methods for moving goods across borders in and out of the EU and declaring those goods for VAT purposes – something that previously had been pretty seamless due to the trade agreement between EU states. Thanks to the grace period there has been some time for the UK Government to put new policies in place to handle customs declarations, which are now almost ready to launch. But before they do, they have launched a dress rehearsal service to work out some of the kinks.
The future of Customs Declarations
While we were members of the EU, all customs declarations were handled through the Customs Handling Imports and Exports Freight (or CHIEF) platform. This allowed businesses importing and exporting goods to make their customs declarations and get the import VAT statements needed to complete their VAT return each quarter. And while traders can still use this service for now, it will be replaced with the Customs Declaration Service very soon.
The Customs Declaration Service is the new electronic customs declaration system developed by HMRC, and it has been designed to accommodate all procedure and process changes to EU legislation, as well as UK legislation. HMRC felt the old system did not cover a lot of newer issues cropping up, and white CHIEF served a strong purpose for 25 years, the Customs Declaration Service is their way of embracing change and modern technology. It is a major milestone for HMRC, and a lot of work and consulting have gone into its design. And now the first phase of launch is here, in the form of the Trader Dress Rehearsal Service.
What is the Trader Dress Rehearsal Service?
The Trader Dress Rehearsal Service is basically what it says on the tin. It is a dress rehearsal for traders, so that they can practice using the new system, get used to the new way of working, and report any bugs they find so that they can be fixed before launch. It is an optional service, so no business has to sign up if they don’t want to. But we do encourage any business that trades overseas to use it if they can – as it will ensure you are familiar with the system before you have to start using it officially. The service is free and easy to access online and will be in effect for a while as changes are made and more users interact with it.
Accessing the service
In order to use the Trader Dress Rehearsal service, you need to follow a few steps. The first is to use a software provider to gain access. If you have one, get in touch with them and ask to be granted access. If you don’t have a software provider already, HMRC has created a list of developers providing Customs Declaration software. You can find it here. To access the service you will also need:
- An EORI number
- To have obtained any necessary authorisations and licenses
- An understanding of the UK Trade Tariff and making customs declarations
- A plan to access the Customs Declaration Service
What does this mean for VAT?
Of course, businesses still need to submit their VAT returns once a quarter, which means this big switch over and using trail systems has caused a little bit of concern. After all, if the system isn’t ready, or producing real invoices, then there is the chance you will not be able to submit a full VAT return, which comes with its own penalties. However, HMRC have recognised that the switch over is going to cause delays in gathering the correct paperwork, and so they have come up with a temporary solution. While you should use the dress rehearsal service to familiarise yourself with how it all works, for now you should also continue to make your declarations through CHIEF as well. You can then follow these steps to get a postponed import VAT statement. Once completed, you should be able to see and download your statements by the 6th working day of the month and use these on your VAT return.
If you aren’t sure what the right process is, or you need support with VAT during this transition, the team at Purple Lime are happy to help. Just get in touch to book your free, no-obligation consultation by emailing email@example.com, or calling us on 01249 691360.