New Customs system is coming
In 4 months the new HMRC Customs Declaration Service (CDS) goes live with its’ first bulk users. If all goes well, over a third of UK Customs transactions will migrate to CDS by the end of Summer. This will relieve the immediate stress on the old CHIEF system and create spare capacity for post-Brexit contingencies.
By January 2019 all users, and all UK import and export transactions will move to CDS.
What is CDS?
CDS is a new Customs IT system. It will replace CHIEF the ageing, bespoke mainframe system that has already exceeded its useful life.
All UK imports and exports are processed today by CHIEF. Key features include managing millions of import duty and VAT calculations, capturing export declarations, profiling risky goods, licencing, and control of cargo release at borders.All of this activity will move to CDS this year.
CHIEF and its replacement, CDS, are mission critical to UK PLC.
Change was needed as the old mainframe system has become difficult and costly to manage. The extent of updates needed to meet modern trade demands and specifically the Union Customs Code forced Customs hand.
CHIEF has proved to be a great civil servant. We say it is fully entitled to a “gold plated index linked civil service pension”. And, just like some civil servants towards the end of a long career, it’s willingness and ability to cope with changing demands was being called into question. It just can no longer do the job and isn’t flexible enough to adapt.
The decision to move to CDS, a modular, rules-based IBM application, was taken well before the Brexit referendum. However the Brexit vote raised the spectre of a new requirement for millions more declarations. This possibility was not built into the CDS design.
That said, having a new system deployed soon,and CHIEF very recently retired from front line service provides HMRC with some useful contingency capacity should EU negotiations break down and UK-EU-UK declarations arise, although this extra dimension to this major IT project is unwelcome.
[ To continue the pension analogy, it may be that CHIEF not only gets its full pension but it may also some pick up some lucrative freelance work with its former employer the week after retirement ]
As testing of CDS moves along, last week we heard first hand from senior managers within HMRC Transformation on CDS progress.
On cue the day after speaking to trade, back at the office we received a good old fashioned letter from HMRC explaining CDS.
This letter is going out to everyone who has ever interacted with CHIEF and is just part of a multi-level communications plan to get the Customs message out to the trade.
It seems HMRC really are trying to do make an effort to get tell everyone that change is coming.
CDS Update – 8 Key Points
This week the Joint Customs Consultative Committee (JCCC) and ACITA trade association heard first hand about the CDS project. We wrote about the background to CDS here.
Key themes from last weeks status update include:
- HMRC CDS primary focus is on import supplementary declaration processing.
- Exports is running behind import, likely to be Autumn before it is ready.
- Inventory linking and C21 solution still work in progress.
- Draft Tariff Volume 3 is in circulation for trade comment by 13 April. Includes introductory text, CPCs, doc codes and appendices.
- Significant changes in entry build up. Changes to format and numbering of CPCs, doc codes and business rules.
- Draft Tariff Volume 1 not expected until Autumn.
- HMRC welcome trade input to produce “dummies” guide to the new Tariff. HMRC will include correlation tables.
- Opportunity to alter UK Customs rules post-Brexit exist, however that is for later,not in this version of Tariff/CDS
Trade Readiness for CDS
At a high level HMRC seem reasonably confident about the CHIEF to CDS migration.
This is no doubt buoyed by the announcements in Brussels that a transition period will be signed off by the EU. No doubt this provides considerable wriggle room with roll out of CDS because a cliff edge for new declarations on 31 March 2019 seems unlikely.
The transition period allows time to get things right with CDS, allows HMRC to make reasonable decisions by sector, perhaps consider longer dual-running periods, or even facilitate individual trader needs. IT deployment often slips for all sorts of good reasons so watch this space. Who knows ? It may even run to schedule, miracles do happen.
Trade readiness seems split depending on how close you are to the detail. Either blissful ignorance (end users),or serious concern by software providers about the amount of work ahead to enable 2018 deployment. The effort to migrate and educate their end customers and for those users to adapt is massive.
Sources suggest that the different software houses are at different stages of readiness. Witnessed first hand in a number of exchanges where it seemed that not every software house fully agreed with the cheery HMRC line that “it’s all good with CDS roll out“.
CDS for importers,exporters,agents & brokers
By now those affected by the CHIEF to CDS move should have received a letter from HMRC about CDS. Importers and exporters should be in conversation with their forwarder,agent or broker to assess the particular technical steps needed to migrate to CDS. End users need to think about how they will train their entry clerks.
For most people in the business of UK Customs declarations the CDS deployment will force one of the biggest change since CHIEF was deployed 30-something years ago. The principles of the front line entry creation job have not changed, but those relying on templates,cheat-sheets,and copying “what we did before” may struggle.
People who worked through DEPS to CHIEF migration (in ye olde days), SAD-Harmonisation, NES roll out, and VAT Number to EORI changes – have a fair idea of the challenge ahead and the potential for disruption for those who are ill-prepared.
We leave this CDS update with some career development advice.
Maybe if you work on any type of UK Customs / trade software help-desk function or compliance tech support role there may just be enough time to seek alternate ways of earning a living before the phones, chat queues and open IT tickets get out of hand later this year ! (or perhaps a lengthy sabbatical is an option ?)
Don’t say we didn’t warn you.