An electronic customs system to allow the faster import of third country goods from countries that are not members of the European Community
Administered by HM Revenue & Customs (HMRC), Customs Freight Simplified Procedures (CFSP) is an electronic customs system for imported third country goods. It allows faster release of goods from countries that are not members of the European Community (EC) at the frontier or inland, the use of simpler customs declarations and cashflow benefits to importers.
CFSP isn’t compulsory but you may find it useful. There are two CFSP procedures. The Simplified Declaration Procedure (SDP) is used for releasing goods at the frontier to most customs procedures. This may be useful if you are importing perishable goods. The Local Clearance Procedure (LCP) is used for moving goods from the frontier to storage and then releasing them to a customs procedure. This guide shows you how to become authorised for CFSP, how its accounting systems and customs procedures work, whether an agent could help you, and how to find expert help.
CFSP eligibility and restrictions
CFSP are electronic customs declaration processes for speeding up the importation of goods from third countries. You can opt to use either the SDP or LCP. In both cases you submit the declaration in two stages. Either of these procedures can be used independently or they can be combined to suit your purpose.
Eligibility of goods for CFSP
CFSP is suitable for most goods from third countries. However, controlled goods may only be released from the frontier using SDP - ie you cannot use LCP to release controlled goods inland, with certain exceptions.
Licensing - controlled goods and CFSP
Controlled goods are subject to licensing and/or certification and/or special safety or environmental controls and as such must be placed under customs control at the frontier. You will have to use specific CFSP frontier Customs Procedure Codes (CPCs) for them and complete additional boxes in the SFD. Examples of controlled goods include:
- ammonium nitrate in solid form and in quantities above 500 kilogrammes
- controlled drugs
- drugs precursor chemicals
- rough diamonds
- goods subject to sanctions and arms embargoes
- excise goods with the exception of alcohol and tobacco goods
- ozone depleting substances
Fresh produce and live or endangered species are also controlled for CFSP purposes.
The following goods are excluded from CFSP and must not be included in a consignment covered by a CFSP declaration:
|Hydrocarbon oils||cannot be entered using LCP or removed from a Customs Warehouse|
|Goods controlled by Customs under certain simplified authorisation procedures||goods that are imported or removed from Customs Warehouse under TA, IP, or PCC simplified authorisation procedures. CFSP may be used where a specific or full authorisation is held (or in some cases where an application has been made) for TA, IP, OPR, End Use or PCC|
|ATA carnet goods||as the carnet also acts as an entry, goods imported under ATA procedures are not eligible|
|Goods removed from a Customs Warehouse that are to be||Exported|
|Personal effects||Non commercial imports and personal effects subject to C3 declarations|
How the process works
CFSP is based on processes around authorisation, accelerated removal/release, electronic reporting and auditing.
When CFSP goods arrive at the frontier from outside the EC, an initial declaration, known as a Simplified Frontier Declaration (SFD), has to be electronically submitted by the trader to allow the release of the goods.
Complete details of the consignment - as a supplementary declaration (SD) - are then due to HMRC within a set time. This means you don’t have to submit full details before the goods are cleared and that you or your representative can deal with HMRC alongside other trading procedures such as licences or warehouse procedures. You may either remove goods from the frontier to your premises for clearance, or release them into free circulation or another customs procedure. See the guide on Supplementary Declarations for import.
HMRC treats goods imported under CFSP in the same way as goods entering the UK under normal procedures. On arrival, UK Borders Agency staff may check the goods for anti-smuggling, animal and plant health, and standard import prohibition and restriction controls.
Traders then submit an SD as an electronic Single Administrative Document (SAD) via the Customs Handling of Import and Export Freight (CHIEF) system. The supplementary declaration contains details of the shipment and its liability for tax and duty within a certain time. HMRC has powers to audit your records, systems and paperwork after the goods have cleared so they can be sure any duties and taxes are properly accounted for.
SDP and LCP
CFSP can be used by authorised traders in two ways:
- SDP for releasing goods at the frontier to another customs procedure (though special provisions may apply to customs warehousing)
- LCP for removing goods from the frontier under transit arrangements to designated storage premises inland, then release to a customs procedure such as processing under customs control; this process is carried out using either the Community or National Transit system, for which you need to be authorised
You or your agent needs to be authorised by HMRC to operate CFSP. You must also obtain the authority to use the duty relief schemes such as customs warehousing or inward processing that are often used with CFSP.
Traders authorised to use simplified procedures will be issued with an authorisation letter. To apply for CFSP download the C&E application form C&E48.
How to get authorisation to use CFSP
Trading businesses or their representatives must receive authorisation from HMRC to operate CFSP.
To qualify, you must:
- be registered as a sole trader, a partnership, or a limited company
- have access to an electronic reporting system
- have a registered Economic Operator (EORI) number, which HMRC supplies
- declare third country goods regularly against your EORI
- have a good record of compliance with customs and other official bodies
- be financially solvent
- maintain a set of documented procedures which accurately describes the accounting and logistical processes of your business and enables customs to perform audit-based controls
- be able to use your duty deferment facility or that of a third party for payment and security purposes (payments go through the CHIEF so traders cannot pay in cash or other methods)
You can find out about EORI and CHIEF in the guide on UK’s import and export processing system CHIEF.
For information on how to apply for your EORI number, see the guide on the Economic Operator Registration and Identification (EORI) Scheme.
Traders may also have to meet extra conditions, which their authorising officer will tell them about.
If you want to combine CFSP with other customs procedures such as customs warehousing or Inward Processing (IP), you must also be authorised by Customs, and need to apply separately for these procedures. See the guides on temporary admission, Community Transit, inward processing and processing under customs control (PCC).
The authorisations traders and third parties need
Traders, particularly small businesses, often use agents or freight forwarders to process their goods under CFSP, not least because these have the necessary software.
You can complete the process online yourself if you are authorised to use the system. This is called self-representation. There are two other kinds of representation:
- direct representation, where a third party (such as an agent) acts in your name and on your behalf. You remain responsible for customs debts and you need to be authorised to use CFSP, although the third party does not
- indirect representation, where a third party acts in their name but on your behalf - you and the third party share liability for the customs debt; you don’t need to be authorised to use CFSP, but the third party does
To be authorised to use CFSP, traders and agents will have to show that they meet a range of conditions regarding accounting systems and records, customs compliance and financial solvency. These criteria will need to be in place in your business before HMRC can grant authorisation - authorising officers will visit your premises to verify your systems and paperwork. You will need to complete form C&E 48 to apply for CFSP.
CFSP payment and security requirements
Under CFSP, all duties and VAT that traders owe for goods have to be paid using a duty deferment account. This procedure is operated through the HMRC Customs Handling of Import and Export Freight system. The advantages for traders include up to a month’s credit facility and the ability to pay by BACS (banks automated clearing system).
Duty deferment and security guarantees
Both traders and their representatives (such as agents, if CFSP-authorised) must pay by duty deferment account. Granting duty deferment facilities depends on traders providing a guarantee of financial security. Security will take the form of a blanket authority to debit the authorised traders’ deferment account. Guarantees cover the overall maximum amount in any calendar month of your liabilities. You can find out about deferment in Notice 101: deferring duty, VAT and other charges.
Setting up a duty deferment account
The amount in the duty deferment account has to be enough to cover your duty and VAT liability for one calendar month.
You can reduce the amount you’ll need to keep in the duty deferment account if you belong to the Simplified Import VAT Accounting (SIVA) system or apply for a reduced security facility. To find out about SIVA deferring, read the guide on VAT and import duty: reducing financial guarantees.
To apply for a duty deferment account, you need to complete and submit specific HMRC forms:
- [https://www.gov.uk/government/publications/import-and-export-deferment-arrangements-application-for-approval-c1200) (Application for Approval of Deferment Arrangements)
- find form C1202 (Duty Deferment - Instruction to Bank or Building Society to Pay Direct Debits)
- find form C1207N (Standing Authority for Agents to request Deferment of Duty against Importers Deferment Approval Number)
If you have CFSP authorisation and you pay some or all of your duties and taxes to HMRC through a third parties duty deferment account, you may be able to reduce the amount of security you provide. The security is reduced from a month’s dues to what you would owe over eight to ten days. However, it should still cover your own and any clients’ liabilities for all goods imported under the scheme. Your duty deferment account should still cover a full month’s worth of revenue payments.
Under this scheme you must submit Supplementary Declarations regularly within a shorter time (a minimum of eight days), and complete a Final Supplementary Declaration within four working days of the end of each duty period.
To apply, contact your local Customs office. You can find your local Customs office by contacting the HMRC Excise & Customs Helpline on Telephone: 0845 010 9000.
The CFSP Simplified Declaration Procedure
There are two main ways that traders can use CFSP. SDP and Local Clearance Procedure.
Once your goods reach the frontier, you can use SDP to release goods to free circulation, Inward Processing, processing under customs control, end use, temporary importation, a Free Zone or customs warehousing.
The SDP process is carried out through the CHIEF system in two stages.
The trader provides minimum details of the consignment at the frontier using a SFD. The date on the SFD creates the base date for submitting the supplementary, more detailed declaration. Unless the goods are entering a warehouse, it also establishes the tax point for paying the duty and taxes. You may have to present additional documents for controlled goods, as below.
The trader submits the Supplementary Declaration Import before the end of the fourth working day of the month following the month of acceptance of the SFD. To ensure your goods are released quickly, you must fully and accurately complete the declaration and use the correct CPCs.
Extra requirements for controlled goods
For controlled goods, including those which are subject to special health or environmental conditions, you will have to send import licences or certificates with the hard copy of your SFD to the National Clearance Hub in Salford. In addition, you must use one of the specific CPCs and complete additional boxes on the SFD.
For civil-use explosives with a health and safety certificate from the Health & Safety Executive, you must send the certificate and supporting documentation with the SFD. For carcinogenic substances you need to produce the exemption certificate and supporting paperwork.
For imports of goods requiring a Rural Payments Agency licence or a drugs licence, you must produce either a paper licence or an e-licence. You must supply the paper licence with a hard copy of the SFD to Customs. For e-licences, you should complete the licence/document code, details and status on CHIEF and send hard-copy SFD and supporting documentation to HMRC.
The CFSP Local Clearance Procedure
Under LCP you may use either Community Transit (CT) or National Transit procedures to move the goods from the frontier to designated inland premises for clearance. You cannot import controlled goods under LCP, however, goods subject to Horticultural Marketing Inspectorate conformity certificates and Plant Health material may be imported under LCP if you are authorised by HMRC and the Department for Environment, Food and Rural Affairs or the Forestry Commission.
To use LCP you need additional authorisation for transit procedures as well as authorisation for CFSP. You must be authorised to hold a comprehensive guarantee or a guarantee waiver and become an authorised consignee. You need to complete[an application form C1343 to use transit simplified procedures.
Transit movements are discharged on arrival at inland premises, after which the goods may remain in temporary storage for up to 20 days. See the guide on using the New Computerised Transit System (NCTS) to move goods across the EU and EFTA countries. You can also view information on CT in the guide on Community transit procedures.
Traders can use LCP to release goods to a customs procedure in five stages.
The trader provides minimum details of the consignment to CHIEF at the frontier using a Form C21 for Community transit, or a SFD for National Transit.
The trader uses either Community or National Transit to move the goods to designated premises inland. Once the transit movement is ended, the goods are considered to be under the Temporary Storage procedure and can be stored for up to 20 days before being entered to a customs procedure.
The trader uses Local Clearance records to enter goods to a customs procedure. The date of entry will set the base date for submitting the Supplementary Declaration Import (SDI) via CHIEF. Unless goods are entered to a customs warehouse, it also establishes the tax point.
The trader submits the SDI before the end of the fourth working day of the following month.
The trader also submits a Final Supplementary Declaration before the end of the fourth working day of the month following the month of acceptance of the SFD. CHIEF will validate your SFDs to make sure you are authorised to use the procedure.
You can read Notice 760 for more information about CFSP.
You can’t use LCP to release excise goods at the frontier, but you can use the procedure to release goods from warehousing and Free Zones using LCP removals. You must submit your supplementary declarations according to the excise reporting periods.
If you need a transit guarantee, you will need to comply with additional conditions.
CFSP and customs warehousing
Traders can use CFSP to import goods using customs warehousing to suspend duty payments.
Goods can be entered into customs warehouses using CFSP in one of two ways:
- Simplified Declaration Procedure, a Simplified Frontier Declaration is followed by a Supplementary Declaration Import (SDI) to enter imports to a customs warehouse
- LCP - goods are removed from the frontier to designated premises under transit procedures and move into a period of temporary storage - on removal from temporary storage you will need to enter the goods to customs warehousing in your local clearance (LC) record and subsequently submit a SDI
Traders who’ve placed their goods in customs warehousing can remove them using LCP with a Supplementary Declaration Warehouse (SDW) removal declaration or the standard paper warehousing procedure.
If you choose LCP to remove the goods, you should:
- make an entry in your LC record which will set the tax point and base date for the submission of a SDW - the SDW deadline is the end of the fourth working day of the month following the month of the entry into the records
- remove goods from the warehouse
- submit the SDW
- submit a Final Supplementary Declaration by the end of the fourth working day of the month following the month of the entry into the local clearance records
You can find out about using customs warehousing in Section 7 of Notice 760.
For more general guidance read the guide on customs warehousing.
Using CFSP agents
Many businesses find using third-party service providers a cost-effective and efficient way to deal with customs formalities. You may make savings by avoiding costs for specialist staff and the software required for customs procedures, including CFSP.
Freight forwarders, customs agents and brokers may offer CFSP clearance. Freight forwarders, whose principal business is to move goods to be transported from one country to another, also generally provide customs clearance facilities. Customs agents and brokers only handle paperwork at customs points or frontiers for you.
If you wish to use a third party service provider for CFSP, they must either be authorised or hold authority to act on your behalf. You should also make sure that you provide them with full and accurate information.
To be authorised to use CFSP, agents will have to show that they meet a range of conditions regarding accounting systems and records, customs compliance and solvency.
Paying duty through a third party
There are three types of representative - self, direct and indirect. The most common, a direct representative, acts in your name but isn’t liable for your customs debt. An indirect representative acts in their own name and on your behalf. Indirect representatives are held jointly and severally liable for your customs debt.
To pay your CFSP duty and taxes, you can use your own or your representatives duty deferment account. However, if you use an indirect representative they will have to provide security for your duty and VAT liability for one calendar month unless they are approved for reduced security.
If you are an existing CFSP trader and wish to act as an agent for another trader, you must gain agreement from your customer to use their deferment account. See form C1207N Standing Authority for Agents to request Deferment of Duty against Importers Deferment Approval Number. You must then notify your CFSP authorising office. They will amend your authorisation to allow use of your customer’s deferment account.
You can view information for third parties about completing CFSP declarations in Notice 760.
Sources of help and support for CFSP
The Excise and Customs Helpline provides help and support to traders. You can call the HMRC Excise & Customs Helpline on Telephone: 0845 010 9000.
For specific queries about your CFSP declarations and submissions, or if your supplementary declarations will be late, email the HMRC CFSP National Assurance Team at CFSP_COPE@hmrc.gsi.gov.uk
You can also contact:
CFSP National Assurance Team (CNAT)
Peter Bennett House
Fax number: 0113 389 4490
Large Business Service (LBS) traders should contact their Client Relationship Manager with application queries.
Other businesses should send CFSP applications to:
CFSP & SASP
HMRC Authorisations and Returns Team
Peter Bennett House
Leeds LS16 6RQ
Customs civil penalties apply to breaches in the rules and regulations in customs procedures. Traders may receive a warning letter or have to pay fines.
Customs civil evasion penalties may be imposed when it can be established that a trader has deliberately evaded the payment of a duty or import VAT.
HMRC can also seize goods when the correct duty and or import VAT has been evaded, and traders may face prosecution.
You can find out how customs penalty schemes work in the guide on customs seizures and penalties.
If you have a complaint or suggestion, you should try to resolve it with your local Customs office first. You have the right to a formal departmental review at HMRC. You may also have the right to ask for a hearing at a Tax and Duties Tribunal, which are based in London, Manchester and Edinburgh.
If the issue isn’t resolved to your satisfaction, you can ask the Independent Adjudicator to look into it. You can call the Adjudicator’s Office Enquiry Line on Telephone: 0300 057 1111.
Adjudicator’s Office Enquiry Line
Telephone: 0300 057 1111
HMRC Central Deferment Office Enquiry Line
Telephone: 01702 367 425