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A leading business lobby group has warned of “worrying” delays for UK importers to switch to a new digital customs platform and called for a deadline for businesses to sign up to extend the scheme.
The deadline for companies to register with the Customs Declaration Service (CDS) was extended by a month in October. But the British Chambers of Commerce has said a new cliff edge is looming later this month, with no clarity from the tax authority, HM Customs and Revenue, on what will happen next.
Liam Smith, director of trade facilitation at the BCC whose business arm, ChamberCustoms, is working with companies making the switch, said HMRC data showed that more than a quarter of businesses had not signed up to CDS.
“The data on the switchover to CDS is alarming on many fronts. With no signs of a decision yet on what will happen next . . . thousands of businesses may soon find themselves down and unable to import,” he said.
“This would be a disaster for the economy as we go into a recession expected to last at least a year.”
According to data provided to MPs by HMRC, more than 4,700 businesses made import declarations on the new system in the week starting November 7, but 1,287 had yet to sign up to it.
Although the agency said more than 91 percent of import declarations are being made on the CDS system, the BCC argued that many businesses are still lagging behind.
“The issue goes much deeper than the headline figure of 1,287 businesses, as many of these companies will be brokers for hundreds of other companies,” Smith said.
The new system was originally intended to be launched before Britain left the EU, but was delayed as the CDS was not ready.
The platform replaces the aging customs handling of import and export freight (main). HMRC 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 with only 200 error codes enables users to pinpoint exactly where a mistake has occurred, compared to the 4,000 such codes used in the Chief system.
The BCC said it was demanding an urgent meeting with ministers and that HMRC should do more to encourage companies to sign up, pointing out that the delay was unfair to those who had already invested in the switch over.
“HMRC need to get their house in order and communicate clearly on the future of both systems using CDS and Chief,” Smith said. “The current halfway house is also unfair to firms like ours, who have invested a great deal of time and money in order to get their homes to a replacement 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 additional time for people who had a valid reason for not being able to migrate to CDS. We continue to work with announcers to ensure they can proceed and there is no disruption to trading.
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