New HMRC customs system

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Why does this matter to me?

It’s important that businesses are aware that this change is happening in order to avoid any unwanted delays or repercussions and remain HMRC compliant when their customs declarations are submitted to HMRC via CDS.

CHIEF vs CDS

The incumbent HMRC system used for customs declarations is being taken out of service and replaced.  Where entries are done on behalf of international trading businesses by brokers or freight forwarders this will not cause a change to their overall operational processes.  The new system is different and will require some additional information to complete the customs declaration.

The current system used by HMRC for customs declarations; Customs Handling of Import and Export Freight (CHIEF) system, which has been in use since 1994, is being replaced by the Customs Declaration Service (CDS) system.

The current deadlines for the phasing out of CHIEF being available advised by HMRC are 30 September 2022 for imports and 31 March 2023 for exports.  Following this CHIEF will cease to operate and the only available system will be CDS.

Why the change?

HMRC are changing the customs declaration system to modernise the customs process as CHIEF entries are based on paper submissions and include several boxes that accept data in a free text format. The CHIEF system was also not designed to manage the volume of customs entries that are now made, and CDS has been designed to ensure that there is a robust system in place that provides a more futureproof solution to increased volumes.

CDS, has been built around data processing rules. As such, most data elements will be restricted to code format other than name and address fields. This means that a higher level of specificity is required, and therefore creates a greater need for accurate details to be provided.

HOW CDS Differs to CHIEF

With this new system, there will come a number of changes that businesses trading internationally should be aware of.  These changes will affect the level and type of information that will be requested from you by your Customs Broker.

Data Groups and Data Elements

When making declarations, what are currently known as boxes in CHIEF are being replaced by data elements in CDS. While similar in function they are not like for like, and there will be more data elements required to fill out in CDS than there currently are boxes in CHIEF.  

Data elements are categorised into eight data groups.  The data group number is used in the identification of the data elements, as an example for dispatch country detail CHIEF box 15 is data element 5/14 in CDS (for data group 5 data element 14).  The groups are not necessarily consolidated together in one area on the C88.

GroupDescriptionAdditional detail
1Message information (including Procedure Codes)Technical information for HMRC eg entry status such as pre-lodged import.  The PCs and APCs for the consignment.
2References of messages, document, certificates and authorisationsUCR number Licences as required by the commodity code. Authorisation details as dictated by PC and APCs.  Proof of origin details if preference is being claimed for duty and VAT reductions.
3PartiesDetails of the parties involved in the consignment’s movement including: Exporter, Importer Declarant, Representative as well as Buyer and Seller. VAT and EORI numbers.
4Valuation information and taxesIncludes incoterms, invoice value, additions and deduction values for items such as transport costs.
5Dates, times, periods, places, countries, and regionsIncludes dispatch country, destination country, origin country and preference origin country.
6Goods identificationIncludes package details, commodity code, net and gross weights.
7Transport information (modes, means and equipment)Includes transport details such as vehicle registration number, trailer number, container number and type of transport across the border.
8Other data elements (statistical data, guarantees and tariff related data)Includes financial details such as guarantee type and reference or cash account details if required and type of transaction such as out right sale or financial leasing.

Additional fields for completion:

  • For import declarations made in CHIEF, up to 68 boxes are typically completed, with 45 boxes completed for export declarations.
  • In CDS, there will be 91 data elements used across import and export declarations. A subset of 76 data elements may need completing for imports, and 65 for exports, depending on what use the goods are being put to.

A single box in CHIEF can contain several pieces of information; in CDS, the same information may now be separated into specific data elements. For example, box 14 for declarant representative on a CHIEF entry is now made up of 5 data elements on CDS.

CDS also has a mandatory requirement for both net and gross weight of commodities to be entered and therefore both will need to be supplied for every commodity.

Incoterms

Whereas CHIEF only required the letter abbreviation of the incoterm being used for the movement of a consignment.  CDS requires the full incoterm to be stated including the named location including country that joins the three letter term for DE 4/1.  For example, for an export consignment on FCA terms arranged for collected by the customer on the exporter’s premises in Middlesbrough, that business will need to declare for CDS FCA Middlesbrough, UK or if the terms were CFR for Fremantle, they would need to confirm CFR Fremantle, Australia.  An importer on DAP terms to their warehouse in Gateshead would need to state on DAP Gateshead, UK on their declaration instructions.

Customs Procedure Codes

One of the most significant changes to be aware of on CDS will be to do with customs procedure codes (CPCs).

CPCs are used to inform HMRC of the reason for the import/export and identify which Customs regime the goods will enter, such as free circulation or Inward Processing.  The CPC also informs HMRC when duties and VAT are to be collected.

On CHIEF, CPCs are comprised of a 7-digit code for each goods item.

On CDS, codes will be split into two parts; a single 4-digit Procedure Code (PC) combined with up to 99, 3-digit Additional Procedure Codes (APCs) for a single goods item.

Much like the changes coming to data elements as detailed above, there is not always a direct conversion between CPC codes on CHIEF, and PC/APC codes on CDS. This is because CHIEF CPC codes are unique to a goods item whereas CDS PC/APC codes make multiple, interchangeable combinations possible that allow a number of circumstances to be represented.

It is the responsibility of the business to provide the relevant PC and APCs for each commodity on every consignment for all customs declarations.  Businesses need to familiarise themselves with these new PC/APC codes.  Links to HMRC guidance on these new codes can be found via the following links:

*The Correlation Matrices can be used to check which APCs can be used with each PC.

Commodity Codes

Whilst the UK trade tariffs for both CHIEF and CDS were updated at the beginning of 2022 in line with changes made by the World Customs Organisation (WCO). Requirements including for licencing for the same commodity codes in CHIEF and CDS can be different in some instances.  Businesses are therefore advised to check the CDS tariff requirements for commodity codes before arranging a CDS declaration.  The tariff can be found here.

Getting Access

All traders will need to register for CDS, this can be done via logging into the trader’s Government Gateway Account, where the following pieces of information will need to be provided:

  • Your EORI number that starts with GB (if you do not have an EORI number starting with GB and are a UK based business, you must apply for one here)
  • Your Unique Taxpayer Reference (UTR)
  • The address for your business that matches HMRC’s Customs records
  • Your National Insurance Number (for individuals or sole traders only)
  • The date you started your business
  • Your email address

Once registered for CDS via the Government Gateway traders will be able to view their Financial Dashboard and use the Secure File Upload Service. This will allow supporting payments to be made and supporting documents will be able to be submitted to HMRC such as licenses or certification where required. 

Real time account balances and limits can be seen via the Financials page. Limitations are that it will not be possible to view historical transactions against the account.

Changes to payment methods for CDS

Duty Deferment Accounts

To use Duty Deferment Accounts in CDS existing account holders must complete a new Direct Debit Instruction. Original Direct Debit instructions for CHIEF should not be cancelled.

Whilst CHIEF and CDS are both in operation it will be necessary to have two active HMRC Direct Debit Instructions, one for CDS and one for CHIEF, payments for both will be taken on the same day.  Separate statements for each account will be issued.  This ensures that whilst both systems are operational entries can be made via either system as required.

In CDS deferment account holders will have the option of making interim payments against their deferment account to increase their available balance. This will provide the flexibility to increase the value of declarations in a given month without needing to increase agreed guarantees or limits.  Further information is available here.

Any traders using an intermediary to clear goods through UK Customs will need to inform their intermediary of their payment preferences prior to the goods arriving in the UK. Where available as a service, intermediaries will still be able to arrange payment of any VAT and duty via their own Deferment Account on behalf of a trader where agreed by the two parties.

New payment methods on CDS

Flexible Accounting System to become Cash Accounts

The method currently used with CHIEF for payment of VAT and any duties at the time of import clearance will close.  The Flexible Account System (FAS) will be replaced by Cash Accounts in CDS.  When traders will be automatically issued a Cash Account when they register for CDS.  Cash accounts will be managed through the Traders Government Gateway account.  When payment is required for a clearance, the Trade will need to ensure that the account has the necessary funds in.  Via their Government Gateway account traders will be able to:

  • Top them up and use them to pay duties due for your goods when at the time the declaration is made
  • Authorise their agents to use the accounts on their behalf
  • Use their account in all Customs locations
  • Allocate funds for declarations to clear against, in chronological order
  • Withdraw funds from the Cash Account

Further information on paying funds into your CDS Cash Account can be found here.

Traders can view their Cash Account and manage who has permission to use it from the menu option ‘view your customs financial accounts’, which can be accessed via their Government Gateway account.

Immediate Payments

There will also be an option to arrange immediate payments to HMRC for VAT and duty, it will require the import customs clearance reference for that specific clearance to be known at the time of payment. 

There are a variety of methods of payments available include CHAPS, BACS, online or telephone banking and debit or corporate credit card.

The 12 digit clearance reference number which will be prefixed with CDSI must be used in conjunction with the correct HMRC bank account details for CDS and the chosen payment method to ensure that the payment is correctly allocated.

Further details on immediate payment options, payment value thresholds and fund clearance timescales can be found here.

Guarantees

If goods are entering a customs special procedure an individual guarantee or a custom comprehensive guarantee may be required.  The guarantees are usually required to allow the goods to enter a customs special procedure regime and permit duty to be deferred. 

If a traders has a General Guarantee account, permission must be given via the ‘View your customs financial accounts’ on the CDS area of their Government Gateway account to give authorisation for brokers acting on their behalf.  General Guarantee Accounts can be used as a combined method of payment with Duty Deferment Accounts.

Further details on General Guarantee accounts is available here.

Where an individual guarantee is used on CDS, it will be possible to use more than one individual guarantee per declaration.  The guarantee along with the MRN from the declaration along with the payment reference number will need to be sent to HMRC.

Additional information is available on individual guarantees here.

CDS output document

The output document from CDS will still be called a C88.  The C88 generated by CDS will be in a slightly different format to the C88’s generated by CHIEF, due to the changes and additional data fields to be shown on the C88.  It will contain all details of VAT and duty costs, unlike CHIEF where additional documents are issued (H2 and E2) to confirm these details.

As with the CHIEF C88, CDS C88’s must be retained as your record of the declaration.  HMRC’s requirements for archiving international trade documentation is available here.

Chamber CDS Service and Help

The Chamber has a wide range of services to support businesses with their international trade. The chamber’s ChamberCustoms Brokerage Service and Export Documentation Service are provided by a dedicated team based locally.

ChamberCustoms, the British Chamber of Commerce (BCC) network of agents, are early adopters of CDS and were the first to submit an export declaration via CDS and have been submitting import entries via CDS since November 2021.

If you would like to find out more about our customs brokerage service, please contact [email protected]

For more essential knowledge and guidance to support your international trade, please see the Trade Toolkit section of our website.   details of the BCC accredited certificate in international trade module courses, Bitesize knowledge webinars that we run can be found on www.neechamber.co.uk/global.  

If you have any queries regarding your international trade or customs declarations or processes please get in touch with the international team on the Global Service Desk via [email protected].

New Customs Easement in Place to Get Aid to Ukraine More Quickly

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The UK has put customs easement in place effective immediately, making it easier to move aid and donations to the people of Ukraine. Border controls and sanitary checks on humanitarian relief have been removed in an attempt to simplify the process. Other formalities have also been removed, such as needing to notify HMRC when the goods have been exported. Read the full press release here and guidance on taking humanitarian aid out of Great Britain to support Ukraine here.

You will no longer need a T1 to export Humanitarian aid out of the UK and French Customs have agreed to allow goods to transit through France without the need of a T1. This now follows the same process as The Netherlands.

 

The Government still recommends that those who want to help donate cash through trusted charities and aid organisations, such as the Disasters Emergency Committee, rather than donating goods, however. This is because cash can be transferred quickly to areas where it is most needed and can then be used to buy what goods are required.

 

The easement applies to goods intended to support those affected by the humanitarian crisis in Ukraine which are exported in Great Britain. As long as the goods are not exported to, or through, Russia or Belarus, the simplified processes apply to qualifying goods regardless of destination.

Despite the easement, some reports say that there have been serious delays at Dover over the weekend due to a lack of information and people not understanding what it required.

 

Vehicle over 3.5 tonnes that carries more than 9 passengers:

If you are taking the goods through a location using the Goods Vehicle Movement Service, you will need to:

  • Get an EORI number starting with GB.
  • Try to pack goods in groupings of similar items before travelling.
  • Packing list which will show the weights and list of items travelling
  • Present your goods movement reference at the port for check-in so you can board.

 

Vehicles under 3.5 tonnes that carry less than 9 passengers:

You can declare your goods in one of two ways:

  • Check before setting off if the port or airport has the facilities available to offer oral declarations. If they do, you can declare the goods by speaking to a Border Force officer at the ‘goods to declare’ channel or the red point phone in the customs area at the port or airport.

If there are no facilities available to make an oral declaration, you can declare the goods by taking one of the following actions:

  • Walking through a customs control point (this can be a green channel signed ‘nothing to declare’) with the goods, if you are on foot
  • driving (or being driven) past a customs control point with the goods inside your vehicle

Or simply driving through the port if there are no customs control points

You, or the person transporting the goods:

  • should carry a note of the types of goods
  • try to pack goods in groupings of similar items before travelling


They may be asked to confirm:

  • what the goods are
  • your contact details (or the contact details of the organisation or charity you are moving the goods on behalf of)
  • the final destination of the goods

But unlike other goods movements, you will not need to supply any customs documentation or get an EORI number to move goods in this way.

 

Chamber Customs is taking queries on this subject. You can contact them here.

The Road Haulage Association is offering to help firms who are trying to move donated goods across borders with customs declarations. They can be contacted at [email protected]. 

The Chamber and its expert members are supporting regional businesses with their operations to Russia and Ukraine. You can contact us at [email protected]

 

Photo by Kedar Gadge on Unsplash

Changes from 1st January 2022

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From 1st January 2022 a number of changes have been introduced for importing and exporting.  The list below provides a summary of the changes.

Import declarations

  • Full import declarations are required before goods load onto cross-channel transport.
  • Any goods imported in 2021 that have not had an import customs declaration need to have a declaration submitted to HMRC.  If you need any support in arranging a declaration for goods arrived in 2021 please contact [email protected]

Requirements for the Declaration of Origin for trade between the UK & EU

Good Vehicle Movement System

  • Import and export declarations via UK GVMS ports must include the statement RRS01on the declaration in order for the consignment to be linked to the GMR from the GVMS entry.  Details on which ports are using GVMS.  
  • The Cabinet Office Border Protocol and Delivery Group – monitoring situation at GVMS ports.  BDPG have confirmed that there have been some minor issues in the initial weeks that have worked with Border Force and HMRC to resolve.
  • Any issues with GVMS can be raised with the HMRC import / export enquiries helpdesk.

Updated requirements for Animal and Plant products

Commodity codes

  • The UK trade tariff has been updated in line with the changes made by the World Customs Organisation (WCO) to the Harmonised System Nomenclature for 2022.
  • All commodity codes used should be checked against the revised tariff, guidance is available here.
  • UK  commodity code tariff.  

Trading with the island of Ireland

The Chamber’s are constantly collecting feedback to influence policy and decision makers. If you have experienced any changes to your trade from 1st January, let us know at: [email protected]

If you have any queries relating to updated processes since 1st January please get in touch with [email protected]

Restriction on Hazardous Substances

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Certain substances and materials, while hazardous, are essential to manufacturing in some sectors. For businesses dealing in these materials, there is a level of necessary restriction. This article aims to inform you on those restrictions so that your business might better understand them. This article will deal specifically with restrictions against electrical and electronic equipment (EEE).

Why restriction?

In the UK, many types of EEE are regulated to control the levels of hazardous substances that they contain. In the same way that the food we eat needs to be regulated to stop us getting sick, so too does the equipment that we use. The government implements regulations with the aim of protecting human and animal health from the toxic effects of certain substances, chemicals, and materials.

What are the restrictions?

All restricted electrical products need to meet certain requirements. These requirements include:

  • that all products must have supporting technical documentation (known as a technical file), which demonstrates compliance
  • a necessary Declaration of Conformity (You can download a model one from the government’s website here)
  • requirements that labelling be accurate and contain required information
  • requirements that the appropriate conformity marking for GB and/or NI markets are visible, as appropriate.

Who’s responsible?

In the UK, manufacturers, importers, and distributors (including retailers) are all responsible for compliance with RoHS restrictions for products that they make available on the GB and NI market. Economic operators (retailers) in the UK, must be able to identify who supplied them, and who they supplied to, for 10 years following the placing on the market of a restricted good.

Further Information

You can find more information on the government website here. From this page, you can find guidance on RoHS compliance in Great Britain and Northern Ireland. You can also contact the Office for Product Safety and Standards regarding specific compliance queries.

You can find an article relating to the REACH system, which regulates hazardous chemicals specifically, here.

Advanced Tariff Rulings

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Stressing over the right commodity code? Get an advanced tariff ruling!

This article aims to give you an understanding of what an advanced tariff ruling is, and how you might go about acquiring one.

You might be unaware of the correct commodity code to use for a good you’re importing into or exporting from Great Britain. In this situation, you can apply for a legally binding decision on the correct commodity code to use. This is known as an Advance Tariff Ruling.

By applying for one of these, you can avoid any repercussions for having the wrong commodity code, and be confident in your import/export documentation.

To apply for one, you’ll need a government gateway user ID and password, an EORI number, and detailed information on your goods. Visit the gov.uk website here to begin your application.

For more information regarding international trade and the documents required, visit our Trade Toolkit webpage.

January Brexit Changes

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Changes to EU – UK trade coming in January 2022

There are 5 key areas in which there will be changes to EU-UK trade. Businesses need to be prepared for them from the 1st of January 2022 onwards.

Following the transition period after the UK’s departure from the European Union, the UK government is introducing import controls on goods moving from the EU to Great Britain. The changes being implemented will bring EU imports in line with the imports into GB from the rest of the world.

Full details of the changes can be found in the Border Operating Model (BOM), which now includes details for goods being imported to Great Britain from the island of Ireland.

January 2022 Onwards

1. Customs Declaration Changes

Changes to the timescales to submit import customs declarations and what will be required from 01/01/2022:

  • From 1st January 2022 it will no longer be possible to delay Customs declarations as was granted by the easements in 2021
    • Unless the goods are being imported from the Republic of Ireland – as announced on 15/12/21 the easements in place for imports into GB from the island of Ireland will remain in place until further notice.
    • Further detail is available here.
  • GB Importers receiving goods from the EU will have to submit a Customs import declaration to HMRC prior to their goods being allowed to be loaded to the cross-channel transport modality (ferry, channel tunnel or aeroplane) that will deliver the goods to the GB frontier.
  • Many businesses that trade outside of the EU use a customs intermediary to submit declarations to HMRC.
  • Information required for completing a Customs declaration include
    • GB EORI number for the importing business
    • Commodity Code of each product in the consignment
    • Customs procedure code
    • Origin of goods
  • The commodity code information on the tariff will show if import duty or VAT is applicable for the product and will also identify if there are any tariff quotas applicable to the goods when imported into the UK. List of tariffs applicable to UK importers is available here.
  • The UK has a free trade agreement with the EU, meaning that it is possible to import certain goods from the EU with zero rated duty.  The origin of the goods determines whether this is possible or not.
  • The North East England Chamber of Commerce can assist you with customs declarations through its compliance focused ChamberCustoms Brokerage service for UK import and UK export declarations including for GB-NI movements. For more information, visit this link.

2. Goods Vehicle Movement System

The Goods Movement Vehicle System (GVMS) will become a requirement for all GB non-inventory linked ports to create a Goods Movement Reference (GMR) from 01/01/2022:

  • The GVMS GMR links the truck to the consignment of goods that it is carrying.
  • All hauliers responsible for the carriage of goods across the channel via non-inventory linked GB ports should be registered to use the system
  • Non-UK based hauliers need to be registered to use the GVMS system. To be able to register they must have a GB EORI number. To register on the system a government gateway ID is also required
  • GVMS entries to create GMRs are required for import and export movements through non-inventory linked ports, the current list as published by HMRC is available here
  • Consignments will only be able to board their intended cross channel transport once the GMR has been generated.
  • In order for the GVMS entry to be created and generate the GMR, the details of the road transport must be known, the ferry operator, or if it will travel through the Channel Tunnel. Details from the GB customs entry will also be required such as the Declaration Unique Consignment Reference (DUCR) or Movement Reference Number (MRN).
  • A link to the GVMS registration page can be found here.

3. Origin Declaration

Under the EU-UK Trade and Cooperation Agreement (TCA) zero rated duty is available on certain commodity codes as detailed in the UK tariff for goods of UK or EU origin. The easements that have been in place during 2021 to support origin statements are being removed from 01/01/2022:

  • From 01/01/2021 under the TCA, proof of origin for goods was not required in the form of a supplier declaration at the time of export to make an origin statement on the commercial invoice.
  • The grace period allowed exporters using origin statements until 01/01/2022 to get the legally required supporting evidence from suppliers to cover exports made during 2021.
  • This changes from 1st January 2022, supplier declarations must be held by the exporter prior to the origin statement being made on the commercial invoice for exports in 2022.
  • The supplier declarations held by exporters do not need to be sent to overseas customers, they are only for official customs audits.
  • There has not been an easement period for importers declaring preference during 2021
    • Exporter preference statement or importers knowledge has been used
    • Importers bear the burden if they claim preferential duty rates
  • From January 2022, all European suppliers must have a Registered Exporter (REX) authorisation. It is necessary for the REX number to be shown on the Commercial Invoice for eligible goods to enter the UK with zero rated duty.
  • UK exporters do not need to hold a REX, the GB EORI number is used instead.
  • Any eligible goods arriving at the UK Customs border without the REX number stated on the Commercial invoice will not be able to benefit from the zero-rated duty.

4. Import of Products, Animals, Foods, and Feed System (IPAFFS)

From 1st January 2022 it will be necessary for pre-notifications to be sent to the Department for Environment, Food and Rural Affairs (DEFRA) and the Animal and Plant Health Agency (APHA) via the IPAFFS system for goods being imported into Great Britain from the EU (with the exception of the Republic of Ireland).

  • To send the pre-notifications from January 2022 onwards, UK importers of Products Of Animal Origin (POAO), Animal By-Product (ABP), High Risk Food not of Animal Origin (HRFNOAO), plant and plant based products, composite products and germinal products must register with the web-based service called Import of Products, Animals, Food, and Feed System (IPAFFS):
    • To register for IPAFFS the importer must have a GB address
    • Businesses do not need to be approved to set up an IPAFFS account
  • Pre-notification via IPAFFS must be submitted per consignment and not per truck
  • Submission must be made at least 4 hours in advance of the goods arriving in GB
  • Imports into GB from the EU (excluding direct imports from the Republic of Ireland) only need to use IPAFFS and do not need to use TRACES.

5. Commodity Codes

On 1st January 2022, the UK trade tariff will be updated in line with the changes made by the World Customs Organisation (WCO) to the Harmonised System Nomenclature for 2022.

  • The update to the UK trade tariff will create approximately 5500 changes to commodity codes
  • Details published on the changes to date by HMRC are available here
  • All businesses submitted customs
  • If there is any uncertainty in which commodity code should be used for a product you can apply to HMRC for an Advanced Tariff Ruling, applications must be made prior to shipment
  • Details made available to date show that the 2022 amendments show an increase in the requirement for supporting documentation and an increase in the number of commodities classed as dual use.

If you have any specific queries relating to your business, HMRC can be contacted directly with queries regarding imports, exports and GVMS. Details of which can be found here.

If you would like any further details, or support on how to manage any of these changes, please contact [email protected]  

Understanding REACH

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(Registration, Evaluation, Authorisation, and Restriction of Chemicals)

Certain substances, while hazardous, are essential to manufacturing in some sectors. For businesses dealing in these materials, there is a level of necessary restriction. This article aims to improve your understanding on what is required of you when trading or manufacturing hazardous substances. It outlines the UK REACH system, which deals specifically with restrictions on chemicals.

What is REACH?

Brought into law under the European Union Withdrawal Act of 2018, UK REACH replicates EU legislation intended to protect human and animal health from dangerous chemicals. Although replicating EU legislation, UK and EU REACH operate independently from each other. This article will deal solely with UK REACH regulations, which apply to Great Britain. In Northern Ireland, EU Reach regulations apply, in line with the Northern Ireland Protocol.

What REACH tries to do is evident from its name, which stands for the Registration, Evaluation, Authorisation, and Restriction of Chemicals. REACH has four main principles, which are as follows:

1. The ‘No Data, No Market’ principle

While it might sound complicated, this principle basically means that manufacturers and importers must gather information on the properties of their chemical substances in a central database. (You can register information on this database at the government’s website here). This allows for the safe handling of chemicals and hazardous substances. Without the gathering and registration of information, hazardous chemicals cannot go to market. Hence the term, ‘no data, no market’.

This EU Commission designed this principle because, for many years, manufacturers created hazardous substances, and put them on the market in at times very high amounts. However, there was insufficient information on the risks that they posed to human health and the environment. As such, the government is trying to fill this gap so that the industry can better assess hazards and risks that the substances pose. It’s all about protecting you and our environment.

2. The ‘last resort’ principle on animal testing

This means that any chemical tests done on animals can only ever be carried out as a last resort. REACH states that the registrant of the chemicals can only generate information by means OTHER than animal testing, wherever possible.

3. Access to information for workers

This one is pretty self-explanatory. Any employees working for chemical manufacturers have a right to access safety data sheets, chemical safety reports, and other information about the substances and mixtures provided to the employer.

4. The precautionary principle

This principle means that risk reduction measures must be considered when the risk of a certain chemical is uncertain, but a significant hazard has been identified.

What does this mean for me or my company?

Most companies use chemicals in some way, so you may have obligations under UK REACH. However, not every company will have specific duties. You will need to consider how you use chemicals, and what your obligations may be. Remember that REACH obligations:

  • apply to all sectors
  • apply regardless of your companies size
  • make you responsible for the safe use of the substances you place on the market or use
  • require that every actor in the supply chain communicates information on the safe use of chemicals

Further Information

Hopefully this article has enhanced your understanding of the REACH system, its main principles, and its reason for existing.

You can access further information on UK REACH on the government’s website here.

You can access further information on EU REACH on the European Commission website here.

In a similar vein to this article, you can find another NEECC article here, detailing Restrictions of Hazardous Substances (RoHS) rules in the UK.

Freeport Misconceptions

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In March 2021, Chancellor Rishi Sunak announced eight new freeport locations. Freeports are designated zones, usually around a port, where “different economic regulations” apply for businesses to benefit from.  Those regions were:

  • East Midlands Airport
  • Felixstowe and Harwich
  • Humber Region
  • Liverpool City Region
  • Plymouth
  • Solent
  • Teesside
  • Thames

From October 2021, the Teesside Freeport has begun operations, though in its infancy. The government want Freeports to help regenerate economically deprived areas of the UK., and they have claimed that it will ‘level up’ the country in the process.

Supporters of freeports say that they can help increase manufacturing and encourage jobs/investment in areas that struggle to attract both. According to Sunak, these special economic zones will make it ‘easier and cheaper to do business’. They will also bring ‘investment, trade, and jobs to regenerate the regions across the country that need it most’. The name, however, has caused the most confusion.

‘Free’ ports?

Don’t take the word ‘free’ literally. The term ‘freeport’ does not mean that UK businesses shipping goods in and out of these designated ports can bypass VAT and duty obligations. They are not ‘free’ in this sense.

Even though these zones are within the UK geographically, they are legally outside of the country’s border for tax purposes. This means that they are not part of the UK’s Customs Zone. Once any goods you’re importing pass the freeport border, however, you must still pay for the VAT/Duty on those goods as normal.

There are ways to pay less on VAT/Duty, such as Inward (IP) and Outward (OP) Processing measures. An article on Inward (IP) and Outward (OP) Processing is available here. The standard importer’s goods, however, are not exempt from VAT/duty just because they were imported through a freeport.

Additionally, freeports don’t stop you from having to supply the correct documentation that you normally would when trading internationally. Rules of origin, SPS/POAO checks, CPC codes etc, are all still very important for importing and exporting, regardless of the port of entry.

Laws surrounding what can legally be traded internationally also all still stand. So too do the usual licenses required for certain goods, as well as trade embargos and sanctions against trading with certain countries.

What’s their purpose, then?

You might be thinking, if the usual rules still apply, then what’s the point? How can they stimulate the economy? Well, economic benefits are provided for those companies that operate within these freeport zones.

Tax reliefs for freeports include full business rates relief for all new businesses for five years, tax-free capital investment in plant and machinery, and national insurance relief for employers. Companies operating within freeport zones can benefit from deferring payment of taxes until their products are moved elsewhere. They can also avoid them altogether if they bring in goods to store/manufacture on site, before exporting them again.

These regions are also hailed as being able to provide jobs for those living near freeport zones and will hopefully stimulate the economy in that way. A report by consultancy group Mace has indicated that freeports might boost trade by £12 billion a year, creating 150,000 new jobs, however, there are concerns that freeports will simply move activity and jobs around the region, rather than creating new value.

Brexit. What changes next?

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In this blog, chartered accountants and business advisers Baines Jewitt explain what the current timeline looks like for the movement of good, rules of origin and conformity marking.

Though last-minute announcements alter the timetable for import checks and controls, 1 January 2022 still sees significant new compliance requirements.


Goods coming from the EU

The government has decided to phase in checks and controls on imports from the EU over a longer period. The Border Operating Model had set out major new requirements from 1 October 2021 and 1 January 2022, some with particular repercussions for the agri-food sector. This timetable is now revised.

Delayed: The new timetable pushes the start date of some new requirements into 2022. This affects pre-notification of what are called sanitary and phytosanitary (SPS) goods: export health certificates: and phytosanitary certificates and physical checks on SPS goods at border control posts.

It also impacts the timetable for the introduction of safety and security declarations on imports. We should be pleased to advise in more detail if this is relevant to you. It should be noted that the easements do not apply to imports to Northern Ireland.

Still on track: The revised timetable doesn’t do away with all change from 1 January 2022. Full customs controls and customs checks are still being introduced from this date, and the year-long easement allowing businesses to make delayed customs declarations ends. Unless you or your agent are authorised to use Customs Freight Simplified Procedures, you may need to pay relevant tariffs.

Northern Ireland: In another change, it has been announced that current processes for moving goods from mainland Britain to Northern Ireland will continue. For traders moving goods from the mainland into Northern Ireland, this means that the grace periods and easements currently in force are extended.


Rules of origin: check compliance now to ensure ongoing tariff-free trade

To access tariff-free trade with the EU, the onus is on businesses to demonstrate that goods qualify by originating in the UK or EU.

This is administratively complex. Proof of originating status relies either on what is called importer’s knowledge, or on an exporter’s statement on origin. In the latter case, suppliers’ declarations can form part of the audit trail. Since 31 December 2020, there has been an easement in place, meaning businesses don’t need a suppliers’ declaration in place when goods are exported to claim preference – though they must be confident that the goods do meet the preferential rules of origin set out in the Trade and Cooperation Agreement.

Time is now running out. The easement ends on 31 December 2021. From 1 January 2022, suppliers’ declarations are needed, and there may be retrospective checks on transactions since 1 January 2021. Make sure you have everything in place in your supply chain to enable ongoing access to tariff-free trade.


New EU export health certificates: new timetable

The EU has delayed the use of new Export Health Certificates (EHCs).

Originally due to come into force from 21 August 2021, the start date is now 15 January 2022. Current EHCs, signed before 15 January 2022, can be used until 15 March 2022 for goods en route to the EU. Exporters are, however, encouraged to start moving towards use of the new EHCs so as to be ready for full implementation in January.

The EHCs are needed to export all products of animal origin, live animals, germinal products and composite products to the EU. They are also needed for movements from mainland Britain to Northern Ireland.


Extra time for product conformity marking

Great Britain (England, Scotland and Wales) has had a new domestic goods regulation regime in place since 1 January 2021, with a new product marking: the UKCA (UK Conformity Assessed) marking.

The UKCA marking is used for manufactured goods placed on the market in Great Britain, and covers most cases where the CE marking would have been used previously. It is also used for aerosol products that used the reverse epsilon marking.

To give businesses time to make the necessary changes, there is a temporary concession allowing the CE marking to continue to be used in many cases. This was due to expire on 31 December 2021. The government, however, has recently announced that it will not now mandate use of the UKCA marking until 1 January 2023 – though it encourages its adoption as soon as possible.

It should be noted that the CE marking is only valid in Great Britain for areas where rules are the same as those in the EU. Should EU rules change, the UKCA marking might need to be adopted earlier.

There may be steps you need to take to make sure products are compliant in order to continue selling them in Great Britain from 1 January 2023. If, for example, your business manufactures, imports or distributes goods that need to be tested by a conformity assessment body, you need to factor in the time for the testing process to be sure you will be ready on time.

Sales in the EU: Products for sale in the EU need a CE marking. The new UKCA marking is not recognised there.

Northern Ireland: There are different rules for product conformity marking that apply to Northern Ireland.

For more information and insights from Baines Jewitt, please visit their website.

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Import Declaration Update: Goods arriving in Great Britain since 01/01/2021

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All goods arriving in GB since 1st January 2021 must have an import entry completed.  As part of the post-Brexit easements, from 01/01/21 goods can enter GB before the import entry has been arranged, from 01/01/22 this easement will be removed and all imports into GB must have an import entry raised to be allowed to be transported to the GB frontier.

Since 01/01/21 import entries can be declared as full declarations or as simplified declarations utilising the Entry in Declarants Records (EIDR).

HMRC produced further guidance on 6th July 2021 on the timescales that should be adhered to for arranging import declarations into GB whilst the easement regarding import declarations is in place.

In summary, any goods that have been imported since 01/01/21 but not declared must have an import declaration submitted by 06/08/21 and declarations must be made within one month of the goods arrival in GB for the entry to remain compliant. 

There is now guidance on timescale limitations for utilising postponed VAT accounting and when full declarations and EIDR should be used and also of where HMRC will apply civil penalties if non-compliance for import customs entries are found for imports into GB during 2021. 

The full HMRC guidance can be found: https://www.gov.uk/guidance/goods-arriving-in-great-britain-without-an-import-declaration-cip-1?utm_medium=email&utm_campaign=govuk-notifications&utm_source=dcc4d24f-accf-4cdd-92c3-142c3f8ce3f7&utm_content=daily 

For any further support on this please contact [email protected] or if you would like any information or to utilise the Chamber’s ChamberCustoms Brokerage service please contact [email protected]