A leading business lobby group has warned of “alarming” delays in UK importers switching over to a new digital customs platform and called for the deadline for businesses to sign up for the scheme to be extended.
The deadline for companies to enrol in the Customs Declaration Service (CDS) was extended by a month in October. But the British Chambers of Commerce has said a fresh cliff-edge is approaching at the end of this month, with no clarity from HM Customs & Revenue, the tax authority, about what will happen next.
Liam Smyth, director of trade facilitation at the BCC whose business arm, ChamberCustoms, has been working with companies switching over, said HMRC data showed more than a quarter of businesses had not signed up to CDS.
“The data on the switchover to CDS is alarming on several fronts. With no sign yet of a decision on what happens next . . . thousands of businesses could soon find themselves cut adrift and unable to import,” he said.
“This would be a disaster for the economy as we head into a recession expected to last at least a year.”
According to data provided to MPs by HMRC, in the week starting November 7 more than 4,700 businesses had made import declarations on the new system, but 1,287 had yet to sign up to it.
Although the agency said more than 91 per cent of import declarations were being made on the CDS system, the BCC argued that too many businesses were still being left behind.
“The issue goes much deeper than the headline figure of 1,287 businesses, as many of these firms will be brokers for hundreds of others,” said Smyth.
The launch of the new system was originally intended to come before Britain left the EU, but it was delayed because CDS was not ready.
The platform replaces the ageing Customs Handling of Import and Export Freight (Chief). HMRC has described it as “a resilient, reliable, cost effective system” that has the technical capacity to adapt to modern, digitally based trading systems.
CDS is designed to be more efficient for users, the agency said, adding that the platform having only 200 error codes enabled users to precisely identify where a mistake had occurred, compared with 4,000 such codes used in the Chief system.
The BCC said it was seeking an urgent meeting with ministers and that HMRC should do more to spur companies to sign up, pointing out that delays were unfair to those that had already invested in switching over.
“HMRC need to get their house in order and clearly communicate with businesses using CDS and Chief on the future of both systems,” said Smyth. “The current halfway house is also unfair on firms like ours, who invested a great deal of time and money in getting their house in order for the changeover date.”
HMRC said: “The majority of frequent traders have now migrated to CDS, with 91 per cent of import declarations now being made on the system.
“Through our extension process we have provided extra time for those who had a good reason why they couldn’t migrate to CDS. We continue to work with declarants to support them moving across and ensure there is no disruption to trade.”