HMRC is retiring its import software, Customs Handling Import and Export Freight (CHIEF), and replacing it with new software, the Customs Declaration Service (CDS). There are a couple of things a business needs to know and if the business has a duty deferment account, it will also need to take specific action to ensure its duty deferment remains active.
Postponed VAT
Any business using Postponed Import VAT Accounting (PIVA) will already have enrolled to use the CDS software. When the business logs onto the government gateway to download the monthly postponed statements, this is just a part of the wider CDS software, but for most, they just need the one screen for postponed VAT.
Nothing is changing in regard to VAT/postponed VAT. But see below for a useful tip with regard C79 certificates, which are still relevant when not postponing VAT.
Duty deferment account
If the business has a duty deferment account, it will have been set up by HMRC under the CHIEF software. Import duty is assigned to your duty deferment account and HMRC then takes the funds from your bank account via direct debit.
The migration of the duty deferment account over to the new CDS software has meant HMRC is unable to transfer the direct debit due to banking regulations. We saw a similar issue when HMRC migrated taxpayers from the “old” VAT government gateway to the new Making Tax Digital gateway and taxpayers had to set up new direct debits where they had previously opted to have VAT returns paid automatically via direct debit.
The user interface that HMRC seems to be adopting for their interactions with taxpayers is not entirely brilliant, often unintuitive and lacking in logic.
A good example is updating your direct debit for your duty deferment account.
Step-by-step guide
- Use this link to take you to the login page where you get your postponed import VAT statements.
- Log in to your government gateway as usual.
- You are then presented with the screen below, which is where you can download your monthly VAT postponed statements.
- At the top of the screen, there is a black band with “GOV.UK” on the left-hand side, and “Sign out” on the right-hand side. In the middle is “View your customs financial accounts”.
- If you hover your mouse over that text, you will see it is actually a link to another page!
When you click on the link in the black banner, it takes you to a more detailed screen relating to your imports and duty deferment account. Awesome, but not obvious.
In the image below you can see that under the “Duty deferment account” section, there is an “Action required” warning. This lets you know that the direct debit has not been set up for your duty deferment account.
Click the action required and it will ask you to input your bank details. Once they are input and entered, that is all done. Your direct debit is set and ready.
You will note in the image below that it is now also possible to download C79 certificates. This would be where goods have been imported into the UK not using PIVA; perhaps the freight agent wasn’t given instruction to postpone the VAT.
Although not shown in the images, it is also possible to grant authority to a shipping or freight agent to use your duty deferment account. To do this, select this option on the screen, then enter the freight agent’s Economic Operators Registration and Identification (EORI) number. The freight agent should be advising you to do this already, but if not it might be worth speaking with your freight agent to make sure they are authorised to use your duty deferment account once everything shifts over to CDS.
CHIEF system
The business will already have a direct debit set up for its duty deferment account, but that is set up under the CHIEF import system.
Do not cancel the existing direct debit – your freight agent or importer may still be using CHIEF right up until the software is deactivated.
Summary
As seems to be the theme from HMRC at present, the online portal is a powerful tool that allows taxpayers to manage many aspects of their VAT, tax and customs affairs, but the user interface isn’t very friendly and there has been no guidance or instructions on how to navigate around these screens.
