The Joint Customs Consultative Committee – The JCCC met on 11 November, and the FSPA was represented. There were a number of issues discussed, with Brexit and the new Customs Declaration system dominating the Agenda.
The cabinet office has allowed HMRC dispensation to discuss legislation and policy areas that are already in the public domain with trade, but this proved quite limited as HMRC were unable to answer a lot of questions posed by the trade representatives. Dependent on the political situation, the Treasury intends to lay statutory instruments relating to policy areas after the general election. These will be focussed on business continuity in the event of a no-deal Brexit at the end of January, but could also form the legal basis if the UK leaves the EU at the end of December 2020 without a trade agreement in place. In any case, it is likely that there will be no further Brexit related guidance in the public domain until January – but this will not be a problem if the UK ratifies the withdrawal agreement and enters into a transition agreement.
In relation to Northern Ireland, a number of software developers expressed concern that the customs declaration required for movements to Northern Ireland (Entry Summary Declarations) would not be possible at the end of 2020, and that this should be communicated to Ministers.
There will be VAT issues with Northern Ireland trade with the Republic of Ireland, and HMRC will publish guidance in the new year on this point. In relation to VAT for supplies to the EU after Brexit from the UK, the trade expressed concerns that traders have not been provided clear guidance about what they will have to do. For example, if a trader sends goods to Germany through France, it is possible that the trader will have to account for VAT in France. HMRC will ask the Department for International Trade to advise on guidance for traders affected.
Customs Declaration System
The roll-out of HMRC’s new customs declaration system, CDS, continues. CDS will replace the existing UK computer system, CHIEF. HMRC presented a clear message that the system is now live. HMRC is looking to migrate as many customs brokers as soon as possible to the system, although this may prove challenging as the system’s capacity is disputed by software developers. Nevertheless, HMRC wishes to keep adding volumes to the system and will look to aggressively migrate users from CHIEF. To this regard, HMRC envisages switching off CHIEF by September 2020.
Members will be impacted by this. Those members who make their own customs declarations will need to work with their software developer to ensure that the correct data is collected from commercial systems as the data declared on a customs entry may change. Those members who engage a broker to make their declarations should discuss CDS with the broker, and look to understand what additional data the broker will need.
HMRC has indicated that users of deferment accounts may need to obtain a second account in order to use CDS as it will not be possible to use the same account on CDS and CHIEF. HMRC will clarify the position in the new year.
Trade contact group update
The European Commission’s trade contact group met, and feedback was provided from this meeting. Key highlights from this meeting are as follows.
• The UK will be treated as a third-country by the EU after Brexit meaning that full customs formalities will be needed – this was a reinforcement from the Commission
• The Commission is mandating the use of six-digit commodity codes for transit movements
• The VAT rules will be subject to change next year as low-value consignment relief disappears
Given the purdah restrictions, this meeting was a little subdued. However, HMRC look to recommence full engagement as soon as the election cycle finishes.
Please can you let Jane ([email protected]) know if you have any issues with the HMRC policies (customs and international trade, not other areas,) as it is possible to raise these through the JCCC structure.