CDS (Exports): Our Briefing
- Arne Mielken
- Mar 15, 2024
- 6 min read
Updated: Mar 17, 2024
Breaking Down HMRC's Customs Declaration Service (CDS) for Exports' Key Changes
The Customs Declaration Service (CDS) is an essential tool for UK exporters to comply with the necessary customs procedures when exporting goods outside of the United Kingdom. It is a computer system that exporters use to make customs declarations.
HMRC has announced the extension of the deadline for transferring all export declarations to the Customs Declaration Service (CDS) to March 30, 2024. To ensure a smooth transition, a phased implementation plan has been put in place, requiring high-volume merchants to shift to CDS for exports by November 30, 2023. This announcement provides more time for businesses to adapt to the new system.
READ OUR CDS FOR EXPORTS GUIDE WITH STEP BY STEP CHANGES
So, in a nutshell, what are the key changes under the Customs Declaration Service (CDS) for export?
So, in a nutshell, what are the key changes under the Customs Declaration Service (CDS) for export?
More Data Required
Well, the first thing to note is that there is a requirement for additional information on export declarations - so more data is required than before. Boxes are replaced by "Data Elements" When making an export declaration or providing instructions to their agent or broker for export clearance, this should be considered.
More CDS Declarations To Be Filed
When exporting goods, it is important to select the appropriate "declaration category." The first step is to decide whether the goods are being "permanently exported" or are part of an "outward processing" export. In either case, a separate customs declaration is required for each type of export.
"Constructing" the Customs Procedure Codes as per the UK Customs Declaration Service (CDS) for exports
When exporting goods, it's important to use the correct Customs Procedure Code (CPC) to indicate their movement. Each goods item can have only one 4-digit Procedure Code, but additional codes can be used to customize it to the specific circumstances of the goods treatment. Procedure Codes must be declared with the relevant Declaration Category, and all the Procedure Codes used on a customs declaration must be from the same Declaration Category. For example, a Procedure Code from B1 cannot be combined with a Procedure Code from B2 on the same customs declaration. So you see, it can get quite tricky! Our training and our CDS Practitioner Group will support you.
A New "Permanent Procedure Codes" as per the as per the UK Customs Declaration Service (CDS) for exports
It is essential to note that some CDC codes that we are used to have also changed. For example, "1040" now stands for "Permanent Export or Dispatch of Union goods or goods in Free Circulation and Home Use". As a result, we move from 1000001 to 1040+000, which may seem like a small change, but it must be checked to avoid any discrepancies and to get error messages.
"Nature of the Transaction" as per the Customs Declaration Service (CDS) for exports
Exporters must determine the "nature of the transaction", which includes determining if the items are intended for sale, temporary exhibition, loan, or leasing considerations. What happens to the commodities is disclosed to CDS because to the nature of the trade.
Customs Value may matter for high-value exports as per the Customs Declaration Service (CDS) for exports
The worth of the items that are being exported is often not as much of a concern for those who are exporting. However, by a change in practice, the data element is required for invoices that are more than £100,000 in value.
"Carrier of the Goods" as per the Customs Declaration Service (CDS) for exports
It is necessary to input the information on the Carrier into CDS when the Declarant and the Carrier are not the same person. It is also possible to give the carrier's identifying reference number (EORI) as an option. This comprises the carrier's name and address, as well as their postcode and phone number.
Dispatch & destination countries under the Customs Declaration Service (CDS)
It is necessary for the export declaration to contain not only the countries of origin and destination but also the countries of routing. This may require some planning, almost similar to what occurs in transit declarations.
Don't forget the VAT zero-rating requirements under the Customs Declaration Service (CDS)
It is possible that permanent exports of items that are in free circulation might be eligible for a zero-rate value-added tax, provided that the necessary documentation is also supplied. It is necessary to submit a claim for VAT zero-rating upon shipping in the export declaration in order to comply with the CDS. It is necessary to provide the code VATZ in order to be eligible for the zero-rating of VAT.
What about export licences under the Customs Declaration Service (CDS)?
Export licences in CDS will work just as they do in CHIEF. Any shipments restricted by an export licence or other measures must be reported to CDS using the appropriate X and Y codes, followed by reasons for applicability or non-applicability. A document reference number may also be required along with relevant status codes.
How to clear customs declarations under CDS for export?
Clearance instructions must be provided to CDS, even if a customs broker or agent completes the export declaration on the exporter's behalf. Exporters must provide clear instructions on the data that the broker or agent must include on the export declaration.
Submitting export declarations online
If exporters previously submitted their export declarations via CHIEF using the NESWEB, they must subscribe to CDS in order to use the new online declaration service. The CDS Export Declaration Online Service will replace the NESWEB service and is set to launch this winter.
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