The nascent Customs Declaration Service (CDS) faces significant challenges and there is a risk that it will be unable to fully replace the existing Customs Handling of Import and Export Freight (CHIEF) system by January 2019.
Indeed, HM Revenue & Customs (HMRC) will not know whether CDS works in live service until all of its functionality has been implemented this December, the National Audit Office (NAO) has warned.
In its latest report on the CDS, the NAO says that the late release of functionality and migration of users increases the risk that HMRC will not have sufficient time to resolve any issues that the last release might highlight and that some traders will therefore have to continue using the existing CHIEF system.
Although HMRC intends to migrate users to the CDS beginning in August, and aims to complete the process by January next year, the migration of all users from the current (CHIEF) to the new (CDS) system by then seems, as the NAO puts it, “unlikely”.
However, if the CDS is not ready, does not perform as planned, if traders have not migrated to it in time, or there is no deal on Brexit, then HMRC now has more robust contingency plans in place, the NAO agrees (something it welcomes given that its previous report of July 2017 criticised HMRC for a lack of planning).
For the British Chambers of Commerce, Anastassia Beliakova noted that, until the Government has decided which customs option it wishes to pursue with the EU post-Brexit, the 145,000 UK businesses that are only trading with the EU are left in the dark as to the future costs and administration they have to factor in.
The NAO report, The Customs Declaration Service: A Progress Update, can be found here.
