Call for evidence outcome

Call for evidence: An Independent Customs Regime

Updated 25 July 2022

Summary

Subject of this consultation

This call for evidence seeks views on how we can improve the UK’s customs system as part of the government’s vision for the UK border to be the most effective in the world by simplifying processes for traders and embracing innovation.

Scope of this consultation

This call for evidence invites respondents’ views on 3 areas:

1. the customs intermediary sector

2. the Simplified Customs Declarations Process (SCDP)

3. the Transit facilitation. This evidence will support future changes to policy or processes to make it easier for traders to navigate the UK’s customs system

Who should read this

The government welcomes engagement from any individual or business with views on the future of the UK’s customs regime. This call for evidence is likely to be of particular interest to traders, intermediaries, freight forwarders, fast parcels operators and hauliers. Business representative organisations, trade bodies or customs consultancies that help traders with their customs affairs will also have an interest.

Duration

The call for evidence will run for 12 weeks starting on 7 February 2022 and ending on 2 May 2022.

Lead official

This is a joint consultation led by HM Revenue and Customs (HMRC) and HM Treasury Customs policy teams.

How to respond or enquire about this consultation

Any responses or queries about this consultation should be sent to customscallforevidence@hmrc.gov.uk

Respondents may choose to respond to some or all of the questions in this document. HMRC and HM Treasury welcome partial responses, focused on the aspects of the customs regime that are most relevant to the respondent.

Additional ways to be involved

HMRC and HM Treasury are keen to collaborate with a wide range of stakeholders and will organise a number of engagement opportunities to ensure that views are heard from across the range of sectors who interact with the customs system. Please contact HMRC using the details above if you would like to be involved.

After the consultation

The government will publish a summary of responses shortly after the call for evidence closes. Evidence submitted will be considered as part of the customs policy-making process, and this may lead to further consultation in the future.

Ministerial foreword

In December 2020, the government published the 2025 UK Border Strategy. This sets out, in ambitious terms, the government’s vision for the UK border to be the most effective in the world. Central to this vision is a UK customs system that is at the cutting edge globally in terms of its openness, dynamism and capacity to advance the UK’s status as a leading hub for international trade in goods.

The government is committed to make it as straightforward as possible for businesses to comply with customs requirements, whilst simultaneously protecting our fiscal interests and upholding the UK’s internationally recognised high regulatory and security standards at the border. The effective functioning of the UK border is dependent on a wide range of players from intermediaries to carriers, ports and software providers. The government recognises the vital role that the border industry plays - cooperation and co-design therefore sits at the heart of our ambition to create a world class customs regime.

This call for evidence sits alongside other actions the government is taking to improve the functioning of the UK border. Towards the end of 2021, the government published a discussion paper, encouraging input to shape the design of the UK’s transformational Single Trade Window and also invited industry to express an interest in taking part in a pilot under the ‘Ecosystem of Trust’ programme which looks to exploit pioneering technology.

HM Treasury and HMRC are now actively seeking views and expertise from businesses on the future of the UK’s customs system as announced at the Autumn Budget and Spending Review. This call for evidence asks industry to provide government with evidence of how three central elements of the UK’s customs system – the intermediary sector, the Simplified Customs Declarations Process and the Transit facilitation – currently work for them, to inform and shape future policy. By taking a fresh look at the fundamental building blocks of the UK’s customs system, we want to use this opportunity to gather and consider a wide range of evidence on how the customs system is working and what changes could be implemented to make it simpler, easier to navigate and more responsive to stakeholders’ needs.

This call for evidence is the first step in this process. I hope that a wide range of people and organisations respond to this open process of review, so that we can draw on the very best ideas and ensure we have a customs system that underpins the government’s ambition to make the UK the best place in the world to do business.

Rt Hon Lucy Frazer QC MP

Financial Secretary to the Treasury

1. Introduction

Since the UK’s exit from the EU and the end of the transition period, the government has taken the opportunity to do things differently - using its new-found agility, flexibility, and freedom to start a new chapter for Global Britain, both in terms of how the UK engages the world, and the way things are done at home.

The 2025 Border Strategy sets out the government’s vision for the UK border to be the most effective in the world. A border which simplifies processes for traders, improves the security and biosecurity of the UK and embraces innovation.

The UK border is an integral part of our trade policy. Our border policies and processes not only enable UK businesses to trade with other countries in a fair and competitive way, including through the collection of tariffs and duties, but also protect domestic markets and consumers from illicit goods and unfair trading practices. A robust system of controls at our border is essential to safeguard public security and health and to implement international standards for trade in goods that uphold the UK border’s reputation for integrity and fairness.

In the run up to the introduction of full customs controls on 1 January 2022, the government met with hundreds of businesses, ports, airports, trade bodies and other organisations involved in international trade to understand the impact of customs procedures on business. These meetings were invaluable in helping the development of the UK’s customs regime, and the government is committed to continuing this engagement. We would now like to hear from businesses about how we can improve the UK customs regime going forward.

When moving goods across the border, traders need to navigate the rules around what data they have to provide, how to submit it to government and when. The government needs to collect the right information at the right time, to protect the domestic market, consumers and the environment, charge the right tariffs on goods and undertake checks to protect the country from security threats, illicit trade or unsafe goods. However, we want to make it as easy as possible for traders to navigate the customs system while preventing non-compliance. Our strategy to improve the experience of traders therefore looks at the ‘what’, ‘when’ and ‘how’.

The government has committed £180 million to build a UK Single Trade Window which will streamline ‘how’ traders share information with border agencies. In December 2021, the government sought input from industry to shape the services the UK Single Trade Window will offer.

In addition, the government is looking to create an ‘Ecosystem of Trust’ which will use technology and real-time data to assure movements across the border by trusted businesses. In December 2021, we invited expressions of interest from industry to participate in a pilot that tests how transformative technologies could reform ‘what’, ‘when’ and ‘how’ trusted traders provide data.

While new technologies have the potential to significantly transform traders’ interactions with border agencies, we know that approximately three-quarters of all customs declarations are currently made by customs intermediaries on behalf of traders (source: HMRC Trade Statistics and Customs Analysis). We expect intermediaries to continue to play a vital role in ‘how’ traders submit data to government. This call for evidence (CfE) therefore includes a section to test with business whether the services the UK customs intermediary sector currently provides are easily accessible, high-quality and cost effective.

We also know that the requirement for traders to provide information at specific time points can pose a challenge. While there is limited scope to change what data traders submit, there is more we can do to ease time constraints. The Simplified Customs Declarations Process (SCDP) already allows authorised traders to provide less data at the frontier and pay duty owed at a later point. This CfE is therefore seeking evidence on the value of increasing SCDP’s benefits, and on how we could extend the offer’s reach by making SCDP more attractive to those that do not currently use it.

Similarly, moving goods through Transit does not remove customs processes entirely, but it allows traders to temporarily suspend duties and taxes when moving goods via another customs territory. Through this CfE we are therefore looking to better understand the commercial drivers for and barriers to using Transit in order to identify longer-term simplifications and improvements to the process.

We recognise that there are more opportunities to simplify and improve our customs system. We have therefore started a programme to modernise the way government authorises traders to use facilitations and to review customs special procedures and reliefs to ensure they are as simple and cost-effective as possible to use. We are committed to engage with stakeholders to feed into future policy development.

The scope of this CfE is broad both in the elements of the customs system it covers and in the stakeholders we wish to hear from. There are some introductory questions about your business or organisation, and 3 chapters with questions for your consideration.

Not all questions will be relevant to you, but we would encourage you to read all chapters even if you do not use all of the services or facilitations covered so that we can gather suggestions on how to expand their use. Chapters 1 and 3, on the intermediary sector and Transit, signpost which questions are for the consideration of traders and which are for those who undertake movements on behalf of traders.

2. About your business

The following introductory questions will help us understand more about the nature of your business or organisation and the main interactions you currently have with the UK’s customs regime:

1.What type of business are you? (eg retailer, freight forwarder, fast parcel operator, haulier, etc) and where are you based in the UK? (England, Scotland, Wales, NI, other)

2.What is the size of your business (eg micro (0 to 9 employees), small (9 to 49 employees), medium (50 to 249 employees), large (over 250 employees)) and, broadly, how many movements do you make per year? If you are a trade representative body, please state your membership size.

3.How long has your business been importing or exporting goods, or supporting traders to import/export if you are an intermediary?

4.If you are a trader, please describe the goods that you trade, the nature of your trade (eg are they imports or exports, or both?) and where do goods move from and to?

5.If you are a trader, do you use the services of one (or more) intermediary? If so, why do you use an intermediary? If you use more than one intermediary, do you use them for different purposes?

6.If you are an intermediary, what services do you offer? Do you envisage any of the services that you offer changing, and if so, why?

7.Do you use the Simplified Customs Declarations Process SCDP (previously known as CFSP) for importing goods? Before this CfE, were you aware of SCDP (or CFSP)? Have you considered using SCDP for import and discounted it?

8.Do you use Transit? Before this CfE, were you aware of Transit? Have you considered using Transit and discounted it?

9.Are you an authorised consignor, authorised consignee or both?

10.In your experience, if you use or have used one or more facilitation (SCDP, Transit or another facilitation), which facilitation offers the greatest benefit? Have you or do you combine the use of more than one facilitation and if so, why and how?

11.How does using SCDP or Transit help or hinder coordination with other import processes, for instance Safety and Security declarations, or the movement of specific commodity groups with their own enforcement regimes, for example SPS goods?

3. Customs intermediaries

Background

Customs intermediaries are businesses that help traders to move goods across borders and are therefore a key component in the operation of the border and the facilitation of trade. They will usually complete customs declarations and may also offer other services, including providing or arranging transportation of goods or paying tariffs or import duties. However, for the purpose of this CfE, we are interested specifically in intermediaries whose services include completing customs declarations for submission into HMRC systems, including those who either only complete the declaration but do not submit it themselves, or only submit the declaration but do not complete it themselves.

These intermediaries might be customs brokers or customs agents, but also freight forwarders, fast parcel operators, warehouse operators and hauliers. Many customs intermediaries will have access to HMRC systems, and many have a high level of customs expertise, which can make the processes of importing and exporting easier and often cheaper than traders doing them themselves. Approximately three-quarters of all customs declarations for international trade in 2021 were intermediated by a third party (source: HMRC Trade Statistics and Customs Analysis).

Following the UK’s exit from the EU, more traders have sought the services of customs intermediaries as they adjust to the increased need for customs declarations. It is a government priority to ensure that there is sufficient capacity in the customs intermediary market to support UK traders, some of whom may be completing customs declarations for the first time.

For that reason, the government has already provided substantial support to the sector to ensure that it has been able to grow to meet increased demand. This has included around £80m of grant support to help nearly 5000 intermediaries with new IT systems, recruitment, and training.

Following the recent period of significant change to and scaling of the customs intermediary sector, we want to understand how the sector is performing and ensure that all traders, including SMEs, are able to access a customs intermediary at an affordable cost and that the service they receive is of high quality.

The government has also recently consulted on raising standards in the wider tax advice market. This work may be relevant to some of the activities undertaken by customs intermediaries, and some customs intermediaries and trade bodies responded to the recent consultation.

During 2022, the government will consult further on this work, when we would again welcome feedback from interested customs intermediaries and their customers. However, that consultation is separate to this CfE on the customs intermediary market specifically. The feedback received across both consultations will collectively form the basis of any future policy development.

Ease and cost of access

The government is of the view that there is now sufficient capacity in the customs intermediary market, bolstered by the funding that the government has provided and data we have gathered from the intermediaries register.

We understand from conversations with businesses that the cost of using the services provided by customs intermediaries broadly offers value for money and that the market is competitive, with traders able to compare and choose from a range of intermediaries to find the most appropriate service for them. Whilst we believe this is generally the case, we are keen to test this assumption and to explore how the sector might evolve to better serve traders in the future.

We would also like to explore whether there are any other circumstances that make it difficult or impossible to access an intermediary, for example being unable to find an intermediary that deals with the goods that you trade or because you trade infrequently.

Additionally, we wish to explore whether there are any barriers that may be limiting customs intermediaries from expanding their services and expanding their capacity.

If you are a trader or an intermediary:

12.In your experience, do you agree that there is sufficient capacity within the customs intermediary sector? If not, please provide evidence.

If you are a trader:

13.Do you use the services of an intermediary and, if so, which services do you use? Are there any intermediary services that you do not use, or circumstances where you do not use particular services (eg completing a declaration)? Are there any circumstances where you currently use intermediary services, but you would prefer not to (eg circumstances where you might complete a declaration by yourself)? Please provide details to explain your answer.

14.Have you been able to compare and choose from a range of intermediaries to find the service(s) you require? Do you feel that the cost of an intermediary is proportionate to the services offered, and do you have a clear understanding of the cost of each service that an intermediary offers and what specific services you require? How easy is it to change the intermediary that you use? Please provide details to explain your answer.

15.Other than capacity and cost, are there reasons why you have not been able to engage an intermediary or access particular services offered by an intermediary? If so, please provide details.

If you are an intermediary:

16.Do you offer all of your services to all existing or potential clients, including smaller or infrequent traders? If not what, prevents you from offering these to all existing or potential clients and what would remove that barrier? What, if anything, is preventing you from expanding your business or taking on new employees and/or customers?

17.What are the key factors that drive your pricing, and do you envisage any of those factors changing? Please explain your answer.

Quality

For traders to benefit from using an intermediary, the intermediary needs to provide a high-quality service and make moving goods easier. High-quality intermediaries do that by helping traders to navigate and comply with customs processes, ensuring that their goods move as quickly and smoothly as possible across the border. Whilst we believe that many intermediaries do provide high-quality services to traders, we are aware that in a newly expanded and emerging market, this may not have been every trader’s experience. In your response to the below questions, please do not identify specific intermediaries by name.

If you are a trader:

18.If you have used an intermediary, which type of intermediary have you used (eg freight forwarder, fast parcel operator, customs agent, etc) and how would you describe the service provided? If you have used more than one, please provide evidence for all.

19.If you have used an intermediary, as far as you are aware, were there any issues that arose as a result of your customs declarations being incorrect or incomplete? If so, please provide details.

If you are an intermediary:

20.What, if any, are the barriers to you providing a higher quality service? What would remove those barriers?

21.Have you seen evidence of poor-quality services being provided in the market? Please provide details to explain your answer.

The future of the customs intermediary sector

The customs intermediary sector has undergone significant transformation in recent years, having risen to the challenge of scaling to support UK Transition. The government believes that there is scope and ambition within the sector to continue to innovate and improve the services that intermediaries provide.

The government wants to continue to work with the sector to find market-led solutions which reduce cost, increase innovation and ensure that the UK continues to grow a dynamic and high-quality intermediary sector, including learning from systems or approaches that work well in other countries where relevant.

22.Are there any barriers that prevent customs intermediaries from innovating? What would remove those barriers? Where do you see the greatest scope for innovation?

23.Are there international examples that you would like to draw to our attention and which you would want to see applied or not applied to the UK market? If so, why?

4. Simplified Customs Declarations Process (SCDP)

Background

SCDP (previously known as Customs Freight Simplified Procedures or CFSP) is a two-stage electronic declaration process which moves fiscal and statistical controls inland. Traders provide less data than a full customs declaration at the frontier and then a supplementary declaration later. This gives flexibility to traders and supports the flow of trade at the border. These benefits are reflected in HMRC figures: for both EU and non-EU imports in 2021, HMRC received more supplementary declarations for imports than full frontier customs import declarations.

When using SCDP to clear goods through ports on import (the first SCDP stage), traders will use one of two different options:

• Simplified Declaration Procedure: used for releasing goods at the frontier to most customs procedures, including free circulation and special procedures, by submitting a reduced data set

• Entry in Declarant’s Records (EIDR): also used for releasing goods at the frontier, but allows traders to retain data in the declarant’s own records rather than sending it to HMRC. EIDR cannot be used for controlled goods, and at inventory-linked ports, a C21 customs clearance request is required to release goods

After goods cross the border, a supplementary declaration is then made within a month of import to complete the process. Any tax or duty owed is not paid until after the supplementary declaration is submitted to HMRC. Duty can be paid through a duty deferment account (DDA) whilst VAT can either be paid through a DDA or accounted for on a trader’s VAT return using postponed VAT accounting.

To use SCDP the trader needs to apply for authorisation from HMRC. Traders can be authorised to use Simplified Declaration Procedure, EIDR, or both. An intermediary can also apply for authorisation and use this on a client’s behalf (see further details on appointing someone to deal with customs on your behalf).

Simplified declarations are also available for export. However, the relative benefits of the full customs export declaration – which can also fulfil pre-departure safety and security declaration requirements – often make it the preferred option for traders. HMRC’s data shows that significantly more full declarations than supplementary declarations are submitted for exports.

The temporary facilitation, ‘delayed declarations’, which was introduced as part of the introduction of Staged Customs Controls following the UK’s exit from the EU, has now ended except for movements from the island of Ireland (see Border Operating Model December 2021). With the end of the transitional arrangements for most customs declarations in December 2021, we are asking here about the SCDP arrangements following 1 January 2022. We want to know how SCDP is working now and how it could better serve UK traders.

The questions below are structured in chronological order from the perspective of someone using SCDP to import: awareness of the offer and its benefits, authorisation to use SCDP, frontier processes for moving goods, and the supplementary declaration process. The final section asks about other related processes.

We want to make the offer more attractive and accessible, including for those that do not already use it. If you have not used SCDP before, the first questions (24 to 27) will be most relevant.

Awareness of SCDP and its benefits

24.Do you think there is a good level of awareness of SCDP (or under its old acronym, CFSP) amongst those traders that could benefit from it? Please explain your answer.

Please provide us with your overall assessment of current SCDP arrangements, following the end of Staged Customs Controls for most goods at the end of 2021. Please specify whether your answers relate to EIDR or Simplified Declaration Procedure where applicable.

25.If you use SCDP, please explain its value, providing evidence if possible. If you do not use SCDP, please explain why.

26.Whether or not you use SCDP already, what changes would you want to see to make it more attractive?

Applying to use SCDP

To use SCDP a trader or representative needs authorisation from HMRC. This is assessed on specific written information from the applicant eg about their record keeping procedures. These requirements enable HMRC to confirm an applicant’s suitability and to conduct compliance activity if required. Separately, and relating to customs authorisations more widely, HMRC is acting on industry feedback to reduce the number of different application processes and to make processes easier to use. For this reason, we do not ask in this CfE about the process for submitting the relevant (C&E48) form for SCDP.

27.Do you have suggestions for changes to the SCDP authorisation requirements? Please explain how your proposals would provide assurance of an applicant’s suitability and enable HMRC to conduct compliance activity.

28.If you are not authorised, does the SCDP authorisation process deter you from accessing SCDP? If so, how could this barrier be reduced?

At the border: Using Simplified Declaration Procedure or EIDR

These questions, and those in the ‘After the border: Supplementary Declarations’ section, will be most relevant for users of SCDP for import. If you do not use SCDP, skip to the ‘SCDP: other’ section.

29.If you are familiar with Simplified Declaration Procedure and EIDR, which do you prefer to use? Why is this? Are they beneficial in different instances?

30.Is keeping information in your records (EIDR) just as burdensome as submitting it to customs? Would allowing more information to be kept in traders’ records, rather than being submitted, provide any benefit to you? Please provide examples where possible.

31.SCDP should enable goods to pass through ports more quickly compared to goods moved with a full customs import declaration. If you have used SCDP, has this been your experience? Does this vary for the Simplified Declaration Procedure compared to EIDR, or by different port systems?

32.When using EIDR, businesses use a C21 form to clear goods through inventory-linked ports and an Economic Operator Registration Identification (EORI) number at GVMS ports. If you are familiar with these processes, do you have a preferred approach? Please provide any evidenced feedback or suggested improvements for each process.

After the border: supplementary declarations

Supplementary declarations must be accepted and finalised by the end of the monthly reporting period in which the goods crossed the border. For most traders, this means supplementary declarations must be submitted by the end of the fourth working day of the month following the date of import. The data elements on a supplementary declaration are needed for compliance activity, trade statistics reporting, to calculate duty, and to meet international obligations.

33.Do you wait until the fourth working day before submitting your supplementary declarations? What are the benefits to you, if any, of being able to submit declarations up to a month after goods cross the border?

34.If you use an intermediary have you experienced confusion over who is responsible for completing the supplementary declaration? If so, why is this?

35.What would be the benefit to you, if any, of moving to a longer reporting and payment period? Please give details and evidence in your answer.

Traders can reduce the number of declarations submitted to HMRC by aggregating multiple consignments of goods into a single supplementary declaration, even when the goods cross the border separately. There are 3 types of aggregation: daily; across tax point; and custom period.

• Daily aggregation is particularly popular where many removals from customs warehousing occur at different times of the same day. These removals can be rolled up into an aggregated message.

• Across tax point aggregation allows declarations to be rolled up to a maximum message size of 3MB. This allows consignments imported over a number of days to be accounted for on the same supplementary declaration.

• Customs period aggregation allows supplementary declarations to be combined where the tax point falls within the same 10-day period of the month. These aggregation periods are: day 1 to day 10; day 11 to day 20; day 21 to month end.

Additional guidance on making import supplementary declarations using aggregation is available on GOV.UK.

36.Do you use aggregation when submitting supplementary declarations? If you use aggregation, please explain which type you use and the value it provides to your business? If you do not use aggregation at all, why not?

37.Please provide any suggestions, with detail and evidence, for how any of the types of aggregation could work better for your business?

38.Would it benefit your business to be able to aggregate consignments over a period longer than 10 days when using ‘customs period’ aggregation? If so, please provide evidence for this.

Following the submission of supplementary declarations, HMRC provides the trader with a statement of the customs duty they owe. Under a potential alternative process, known as ‘self-assessment’, the trader could take responsibility for assessing their liability and provide less information to HMRC as a result. We are currently exploring this idea with a ‘proof of concept’ pilot.

39.Would you consider taking responsibility for self-assessing your customs duty and import VAT and keeping more information in your records if it allowed you to submit less data on your supplementary declaration? You should note that under this approach you could be held responsible for mistakes made when calculating what you owe. Please provide evidence and detail for how you see ‘self-assessment’ working.

SCDP: Other considerations

40.Do you use SCDP to declare goods into or out of a customs warehouse? If so, what works well about this, and could anything be improved? Could we learn from this process to improve the way SCDP works in other areas?

41.Do you use SCDP for export? If you do use it, where can the process be improved? If you do not use it, why not? What improvements could be made so you would use it?

42.Do you use duty management software or other specific software to support your use of SCDP? How does this support your use of SCDP? Do you consider specific software to be necessary to access SCDP?

5. Transit

Background

The questions in this chapter relate to businesses that move goods using Transit either directly, or indirectly via a third party. We would also welcome responses from traders and businesses who have considered, but decided against, using Transit.

If you are a business that moves your own goods, or you use a third party to move your goods under Transit, then please consider questions 43 to 47 and questions 54 to 57. If you are a business that moves goods for other businesses (eg as a haulier, an intermediary or a fast parcel operator) then please consider all of the questions in this chapter (ie questions 43 to 57).

As the UK’s customs authority, HMRC is driving changes to initiate and keep pace with the latest developments in international trade and customs processes. The government recognises that Transit is a key facilitation for trade and wants to ensure that Transit meets industry needs and is as accessible as possible.

Transit is a customs special procedure which is governed by the Common Transit Convention (CTC). The CTC allows goods to move under duty suspense across multiple customs territories until the goods arrive at their final destination, at which point customs duties and VAT become applicable.

Transit can provide benefits to businesses moving goods to/from other contracting parties where the route crosses the EU. It may also benefit businesses moving goods to and from the EU where they want to carry out customs formalities away from the border.

It should be noted that Transit doesn’t remove customs processes entirely. Customs declarations are still required in the countries in which the movement begins and ends. In addition, safety and security requirements still apply for goods being moved using Transit.

The CTC has a trusted trader scheme (authorised consignor or consignee (ACC)) that allows traders to start and end the export or import of goods at their own premises rather than at a Government Office of Departure or Destination. Nearly half of all outbound and inbound Great Britain (GB) transit movements start and end at an ACC’s approved location.

The use of Transit to date

The UK Transit system went live on 1 January 2021. In the first 12 months, 1.26 million Transit movements departed from GB, and approximately 700,000 movements arrived in GB (source: NCTS data). We have observed outbound transit movements increase on average by 4% month on month and inbound movements increase by 6% month on month. The average number of monthly outbound GB Transit movements in 2021 was 105,000, and 57,995 for inbound Transit movements.

In the same period, outbound Transit movements have ranged from 12% to 15% of all outbound GB-EU traffic, while inbound Transit movements have ranged from 7% - 8% of all inbound GB-EU traffic (source: NCTS data). This gap was to be expected given the application of Staged Customs Controls to imports during 2021. Inbound Transit movements are expected to increase during 2022 following full customs controls being introduced from 1 January 2022.

As noted above, nearly half of all GB Transit movements start and end at an ACC. The growth in the number of both businesses with ACC status and approved locations has been encouraging, particularly in time critical industries such as pharmaceuticals, large supermarkets and manufacturing.

We want to build on the data collected since January 2021 and stakeholder engagement completed over Summer 2021 to further understand the commercial drivers and barriers to using Transit and identify longer-term simplifications and improvements to the process.

The costs and benefits of using Transit

While some stakeholders cite faster clearance times of their goods as the key benefit of Transit, others suggest it is the ability to move goods under duty and VAT suspense. The costs of using Transit are likely to vary for each business, but the government have been told that obtaining a financial guarantee, purchasing or accessing IT software, seeking expert advice and applying to be an ACC are some of the main investments. We would like to understand how these costs affect businesses’ decisions to use Transit and what government may be able to do to reduce them.

For all users of Transit:

43.If you use Transit, what are the benefits of using Transit for your business? Please provide details.

44.If you use Transit, what are the one-off and ongoing costs that you have incurred? Please provide details.

45.If you use a third party to move your goods using Transit, what services are you being charged for (eg use of their guarantee or ACC premises)? Please provide an indication of how much these charges are.

Help and advice on Transit

To make Transit as accessible as possible it is important for help and advice to be simple, pitched at the right level, and user friendly. Understanding how to target traders and send the correct messaging is key to achieving this. HMRC continues to provide a range of communications, guidance, and engagement to ensure Transit users have access to the information they need, and is taking steps to improve this further. This includes working towards a more customer focussed information and guidance strategy and ensuring that traders are made aware of when Transit may be an option that could benefit them. HMRC will also use the customer understanding generated from this CfE to improve the user journey for Transit guidance and make it easier for traders to quickly find the information they need.

A key aspect that underpins this strategy is understanding who the audience for our guidance is and what they are using it for.

For all users of Transit:

46.On which aspect(s) of the Transit process do you seek advice and guidance, and where do you get this from?

47.How could HMRC improve its current Transit guidance and communications to make it the main source of information you would refer to?

Sector-specific feedback (for intermediaries, hauliers, and fast parcel operators)

Current evidence suggests that Transit is mainly used by hauliers and intermediaries (such as logistics businesses) who specialise in moving goods on behalf of others. Transit is also commonly used directly by medium to large sized businesses (eg food retailers and manufacturers) who have the scale and capacity to transport their own goods. However, we want to test our understanding of who the main users of Transit are.

Given the prominent role of intermediaries, hauliers, and fast parcel operators in the customs process, we would like to get a better understanding of their role in the Transit end-to-end process, and if there are any processes government could improve to enable these sectors to perform their Transit services more effectively.

If you are a business that uses Transit to move goods on behalf of others:

48.What services do you offer in respect of Transit? (eg transporting goods; completion of Transit documents; the use of your financial guarantee and/or ACC premises).

49.Under what circumstances do you use or recommend the use of Transit? For example, are there particular journeys or types of goods for which Transit is beneficial?

50.What proportion of movements do you make using Transit?

51.Which sectors do your Transit customers fall under? Please provide proportions of your total customer base if possible.

52.Is there anything preventing you from expanding your use of Transit? If yes, please explain.

53.Do you use Transit to move groupage loads and if so what proportion of goods are moved this way?

The future of Transit

The government has engaged with industry throughout 2021 to understand how users of Transit are experiencing new border processes and to identify opportunities to improve the Transit end-to-end process. This has focused on the growth of the consignor/consignee market, improvements to the authorisation process, and the use of GVMS. HMRC is committed to delivering the New Computerised Transit System Phase 5 (NCTS 5) by December 2023 which should also introduce process enhancements for CTC movements, including enhanced data quality checks which will reduce the risk of Transit movements ending in enquiry, and the ability to use electronic Transit accompanying documents (TADs) for CTC countries.

While signatories to the CTC must implement the rules that are prescribed by the conventions, including the specifications for NCTS in each country, the service offering differs between countries. The government is committed to learning from best practice from other CTC signatories and adopting process improvements.

For all users of Transit:

54.Are there aspects of the Transit process that could be improved or simplified? Please provide details.   

55.Are there examples of enhancements to the Transit process offered by other CTC contracting parties that you think could be adopted in the UK? If so, please provide details of the process, and explain why they could be beneficial.

56.Are there particular areas of NCTS that you find hard to use, or which cause you difficulties? If so, can you explain how these areas are causing you difficulties.

57.Are there additional easements or process changes we could introduce to increase the take up of authorised consignors/consignees?

6. Further suggestions

HM Treasury and HMRC are interested in hearing other ideas from a wide range of stakeholders about how the UK customs system could be reformed to make it simpler, easier to navigate and more responsive to stakeholders’ needs.

58.Are there any further suggestions that you have for how the UK customs system could be reformed?

7. Summary of consultation questions

Chapter 2: About your business

Question 1: What type of business are you? (eg retailer, freight forwarder, fast parcel operator, haulier, etc.) and where are you based in the UK? (England, Scotland, Wales, NI, other)

Question 2: What is the size of your business (eg micro (0 to 9 employees), small (9 to 49 employees), medium (50 to 249 employees), large (over 250 employees)) and, broadly, how many movements do you make per year? If you are a trade representative body, please state your membership size.

Question 3: How long has your business been importing or exporting goods, or supporting traders to import/export if you are an intermediary?

Question 4: If you are a trader, please describe the goods that you trade, the nature of your trade (eg are they imports or exports, or both?) and where do goods move from and to?

Question 5: If you are a trader, do you use the services of one (or more) intermediary? If so, why do you use an intermediary? If you use more than one intermediary, do you use them for different purposes?

Question 6: If you are an intermediary, what services do you offer? Do you envisage any of the services that you offer changing, and if so, why?

Question 7: Do you use the Simplified Customs Declarations Process SCDP (previously known as CFSP) for importing goods? Before this CfE, were you aware of SCDP (or CFSP)? Have you considered using SCDP for import and discounted it?

Question 8: Do you use Transit? Before this CfE, were you aware of Transit? Have you considered using Transit and discounted it?

Question 9: Are you an authorised consignor, authorised consignee or both?

Question 10: In your experience, if you use or have used one or more facilitation (SCDP, Transit or another facilitation), which facilitation offers the greatest benefit? Have you or do you combine the use of more than one facilitation and if so, why and how?

Question 11: How does using SCDP or Transit help or hinder coordination with other import processes, for instance Safety and Security declarations, or the movement of specific commodity groups with their own enforcement regimes, for example SPS goods? 

Chapter 3: Customs Intermediaries

Question 12: In your experience, do you agree that there is sufficient capacity within the customs intermediary sector? If not, please provide evidence.

Question 13: Do you use the services of an intermediary, and if so which services do you use? Are there any intermediary services that you do not use, or circumstances where you do not use particular services (eg completing a declaration)? Are there any circumstances where you currently use intermediary services but you would prefer not to (eg circumstances where you might complete a declaration by yourself)? Please provide details to explain your answer.

Question 14: Have you been able to compare and choose from a range of intermediaries to find the service(s) you require? Do you feel that the cost of an intermediary is proportionate to the services offered, and do you have a clear understanding of the cost of each service that an intermediary offers and what specific services you require? How easy is it to change the intermediary that you use? Please provide details to explain your answer.

Question 15: Other than capacity and cost, are there reasons why you have not been able to engage an intermediary or access particular services offered by an intermediary? If so, please provide details.

Question 16: Do you offer all of your services to all existing or potential clients, including smaller or infrequent traders? If not what, prevents you from offering these to all existing or potential clients and what would remove that barrier? What, if anything, is preventing you from expanding your business or taking on new employees and/or customers?

Question 17: What are the key factors that drive your pricing, and do you envisage any of those factors changing? Please explain your answer.

Question 18: If you have used an intermediary, which type of intermediary have you used (eg freight forwarder, fast parcel operator, customs agent, etc.) and how would you describe the service provided? If you have used more than one, please provide evidence for all.

Question 19: If you have used an intermediary, as far as you are aware, were there any issues that arose as a result of your customs declarations being incorrect or incomplete? If so, please provide details.

Question 20: What, if any, are the barriers to you providing a higher quality service? What would remove those barriers?

Question 21: Have you seen evidence of poor-quality services being provided in the market? Please provide details to explain your answer.

Question 22: Are there any barriers that prevent customs intermediaries from innovating? What would remove those barriers? Where do you see the greatest scope for innovation?

Question 23: Are there international examples that you would like to draw to our attention and which you would want to see applied or not applied to the UK market? If so, why?

Chapter 4: Simplified Customs Declarations Process (SCDP)

Question 24: Do you think there is a good level of awareness of SCDP (or under its old acronym, CFSP) amongst those traders that could benefit from it? Please explain your answer.

Question 25: If you use SCDP, please explain its value, providing evidence if possible. If you do not use SCDP, please explain why.

Question 26: Whether or not you use SCDP already, what changes would you want to see to make it more attractive?

Question 27: Do you have suggestions for changes to the SCDP authorisation requirements listed? Please explain how your proposals would provide assurance of an applicant’s suitability and enable HMRC to conduct compliance activity.

Question 28: If you are not authorised, does the SCDP authorisation process deter you from accessing SCDP? If so, how could this barrier be reduced?

Question 29: If you are familiar with Simplified Declaration Procedure and EIDR, which do you prefer to use? Why is this? Are they beneficial in different instances?

Question 30: Is keeping information in your records (EIDR) just as burdensome as submitting it to customs? Would allowing more information to be kept in traders’ records, rather than being submitted, provide any benefit to you? Please provide examples where possible.

Question 31: SCDP should enable goods to pass through ports more quickly compared to goods moved with a full customs import declaration. If you have used SCDP, has this been your experience? Does this vary for Simplified Declaration Procedure compared to EIDR, or by different port systems?

Question 32: When using EIDR, businesses use a C21 form to clear goods through inventory-linked ports and an Economic Operator Registration Identification (EORI) number at GVMS ports. If you are familiar with these processes, do you have a preferred approach? Please provide any evidenced feedback or suggested improvements for each process.

Question 33: Do you wait until the fourth working day before submitting your supplementary declarations? What are the benefits to you, if any, of being able to submit declarations up to a month after goods cross the border?

Question 34: If you use an intermediary have you experienced confusion over who is responsible for completing the supplementary declaration? If so, why is this?

Question 35: What would be the benefit to you, if any, of moving to a longer reporting and payment period? Please give detail and evidence for your answer.

Question 36: Do you use aggregation when submitting supplementary declarations? If you use aggregation, please explain which type you use and the value it provides to your business? If you do not use aggregation at all, why not?

Question 37: Please provide any suggestions, with detail and evidence, for how any of the types of aggregation could work better for your business?

Question 38: Would it benefit your business to be able to aggregate consignments over a period longer than 10 days when using ‘customs period’ aggregation? If so, please provide evidence for this.

Question 39: Would you consider taking responsibility for self-assessing your customs duty and import VAT and keeping more information in your records if it allowed you to submit less data on your supplementary declaration? You should note that under this approach you could be held responsible for mistakes made when calculating what you owe. Please provide evidence and detail for how you see ‘self-assessment’ working.

Question 40: Do you use SCDP to declare goods into or out of a customs warehouse? If so, what works well about this, and could anything be improved? Could we learn from this process to improve the way SCDP works in other areas?

Question 41: Do you use SCDP for export? If you do use it, where can the process be improved? If you do not use it, why not? What improvements could be made so you would use it?

Question 42: Do you use duty management software or other specific software to support your use of SCDP? How does this support your use of SCDP? Do you consider specific software to be necessary to access SCDP?

Chapter 5: Transit

Question 43: If you use Transit, what are the benefits of using Transit for your business? Please provide details.

Question 44: If you use Transit, what are the one-off and ongoing costs that you have incurred? Please provide details.

Question 45: If you use a third party to move your goods using Transit, what services are you being charged for (eg use of their guarantee or ACC premises)? Please provide an indication of how much these charges are.

Question 46: On which aspect(s) of the Transit process do you seek advice and guidance, and where do you get this from?

Question 47: How could HMRC improve its current Transit guidance and communications to make it the main source of information you would refer to?

Question 48: What services do you offer in respect of Transit? (eg transporting goods; completion of Transit documents; the use of your financial guarantee and/or ACC premises).

Question 49: Under what circumstances do you use or recommend the use of Transit? For example, are there particular journeys or types of goods for which Transit is beneficial?

Question 50: What proportion of movements do you make using Transit?

Question 51: Which sectors do your Transit customers fall under? Please provide proportions of your total customer base if possible.

Question 52: Is there anything preventing you from expanding your use of Transit? If yes, please explain.

Question 53: Do you use Transit to move groupage loads and if so what proportion of goods are moved this way?

Question 54: Are there aspects of the Transit process that could be improved or simplified? Please provide details.    Question 55: Are there examples of enhancements to the Transit process offered by other CTC contracting parties that you think could be adopted in the UK? If so, please provide details of the process, and explain why they could be beneficial.

Question 56: Are there particular areas of NCTS that you find hard to use, or which cause you difficulties? If so, can you explain how these areas are causing you difficulties.

Question 57: Are there additional easements or process changes we could introduce to increase the take up of authorised consignors/consignees?

Chapter 6: Further suggestions

Question 58: Are there any further suggestions that you have for how the UK customs system could be reformed?

8. Glossary of terms

Aggregation

When using the Simplified Customs Declaration Process (SCDP), traders can reduce the number of declarations submitted to HMRC by aggregating multiple consignments of goods into a single supplementary declaration, even when the goods cross the border separately

Authorised Consignor/Consignee (ACC)

Authorised consignor/consignee status enables a trader to start/end movement of goods under transit at their own premises. To apply for authorised consignor status requires a customs comprehensive guarantee. To apply for authorised consignee status requires an approved temporary storage facility.

Customs Freight Simplified Procedures (CFSP)

Now known as SCDP, this is a two-stage electronic declaration process which moves fiscal and statistical controls inland. Traders provide less data than a full customs declaration at the frontier and then a supplementary declaration later. See page [11] for further detail.

Controlled goods

Specific goods subject to additional customs controls. The government maintains a public list of controlled goods.

Common Transit Convention (CTC)

The CTC is used for moving goods between the EU member states, the EFTA countries (Iceland, Norway, Liechtenstein and Switzerland) as well as the UK, Turkey, Republic of North Macedonia and Serbia. The UK is a member of the Common Transit Convention (CTC), ensuring simplified cross-border trade for UK businesses exporting their goods.

Customs intermediary

Customs intermediaries help traders to move goods across borders. Most traders hire a person or business to deal with customs on their behalf. Examples of intermediaries include freight forwarders, customs agents, brokers or fast parcel operators.

C21

A Customs Clearance Request or C21 form is required by traders in order to request the release of goods at a location with an inventory system.

Duty Deferment Account (DDA)

Duty deferment allows the payment of charges due to be delayed. This includes import VAT, customs duties, excise duties and some other charges.

Entry in Declarant’s Records (EIDR)

When using SCDP to clear goods through ports on import (the first SCDP stage), traders will use one of 2 different options, including EIDR. EIDR is also used for releasing goods at the frontier but allows traders to retain data in the declarant’s own records rather than sending it to HMRC.  

EORI number

An Economic Operators Registration and Identification (EORI) number is required for all businesses moving goods into or out of the UK. You can find further information, including a how to apply for an EORI number on GOV.UK.

Government Office of Departure or Destination

The customs office where declarations placing goods under the Transit procedure are accepted (Office of Departure) or presented in order to end the Transit procedure (Office of Destination).

Guarantee

Financial product required to use the common transit procedure, to ensure that customs duties and other charges are collected by the customs authorities.

Groupage

A mixed load of consignments of different importers’ goods contained within one vehicle. It can also refer to a scenario where multiple product lines are brought together into a single consignment.

Goods Vehicle Movement Service (GVMS)

This is a UK government IT platform for moving goods into or out of Northern Ireland and Great Britain (England, Scotland and Wales).

New Computerised Transit System (NCTS)

EU IT tool for managing and controlling the transit system.

Simplified Customs Declarations Process (SCDP)

This is a two-stage electronic declaration process which moves fiscal and statistical controls inland. Traders provide less data than a full customs declaration at the frontier and then a supplementary declaration later.

Simplified Declaration Procedure (SDP)

When using SCDP to clear goods through ports on import (the first SCDP stage), traders will use one of 2 different options. One option is the Simplified Declaration Procedure, which is used for releasing goods at the frontier to most customs procedures, including free circulation and special procedures, by submitting a reduced data set.

Sanitary and Phytosanitary (SPS)

SPS import controls relate to animal and plant-based goods which are imported into the UK. Full SPS import controls will commence from 1 July 2022 and will be phased in.

Staged Customs Controls

At the end of the Transition Period, the government announced that it would implement Staged Customs Controls for EU imports. Under this approach, known as transitional EIDR, traders importing non-controlled goods from the EU could enter the information on the goods into their own records and then submit a supplementary declaration within 175 days of arrival. Staged Customs Controls ended on 1 January 2022.

Transit Accompanying Document (TAD)/electronic TAD

Document printed from NCTS to accompany the goods, setting out details of the transit declaration.

Transit

See ‘Common Transit Convention’.

9. The consultation process

This consultation is being conducted in line with the Tax Consultation Framework. There are 5 stages to tax policy development:

Stage 1: Setting out objectives and identifying options.

Stage 2: Determining the best option and developing a framework for implementation including detailed policy design.

Stage 3: Drafting legislation to effect the proposed change.

Stage 4: Implementing and monitoring the change.

Stage 5: Reviewing and evaluating the change.

This call for evidence is taking place during stage 1 of the process. The purpose of the call for evidence is to seek views on the policy design and any suitable possible alternatives, before consulting later on a specific proposal for reform.

How to respond

A summary of the questions in this consultation is included at chapter 7.

Responses or enquiries should be sent by 2 May 2022, by email to customscallforevidence@hmrc.gov.uk.

Please do not send consultation responses to the Consultation Coordinator.

Paper copies of this document or copies in Welsh and alternative formats (large print, audio and Braille) may be obtained free of charge from the above address. This document can also be accessed from HMRC’s GOV.UK web pages. All responses will be acknowledged, but it will not be possible to give substantive replies to individual representations.

When responding please say if you are a business, individual or representative body. In the case of representative bodies please provide information on the number and nature of people you represent.

Confidentiality

HMRC is committed to protecting the privacy and security of your personal information. This privacy notice describes how we collect and use personal information about you in accordance with data protection law, including the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act (DPA) 2018.

Information provided in response to this consultation, including personal information, may be published or disclosed in accordance with the access to information regimes. These are primarily the Freedom of Information Act 2000 (FOIA), the Data Protection Act 2018, UK General Data Protection Regulation (UK GDPR) and the Environmental Information Regulations 2004.

If you want the information that you provide to be treated as confidential, please be aware that, under the FOIA, there is a statutory Code of Practice with which public authorities must comply and which deals with, amongst other things, obligations of confidence. In view of this it would be helpful if you could explain to us why you regard the information you have provided as confidential. If we receive a request for disclosure of the information we will take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances. An automatic confidentiality disclaimer generated by your IT system will not, of itself, be regarded as binding on HMRC.

Consultation privacy notice

This notice sets out how we will use your personal data, and your rights. It is made under Articles 13 and/or 14 of the UK General Data Protection Regulation.

Your data

We will process the following personal data:

Name
Email address
Postal address
Phone number
Job title

Respondents will not be asked to submit this data, but may send this passively to Her Majesty’s Government via email signatures in responses sent to the Consultation mailbox.

Purpose

The purpose(s) for which we are processing your personal data is: An Independent Customs Regime.

Legal basis of processing

The legal basis for processing your personal data is that the processing is necessary for the exercise of a function of a government department. It is covered by the HMRC Commissioners’ powers as necessary as part of the functioning of the customs regime.

Recipients

Your personal data will be shared by us with HM Treasury.

Retention

Your personal data will be kept by us for 6 years and will then be deleted.

Your rights

You have the right to request information about how your personal data are processed, and to request a copy of that personal data.

You have the right to request that any inaccuracies in your personal data are rectified without delay.

You have the right to request that any incomplete personal data are completed, including by means of a supplementary statement.

You have the right to request that your personal data are erased if there is no longer a justification for them to be processed.

You have the right in certain circumstances (for example, where accuracy is contested) to request that the processing of your personal data is restricted.

Complaints

If you consider that your personal data has been misused or mishandled, you may make a complaint to the Information Commissioner, who is an independent regulator. The Information Commissioner can be contacted at:

Information Commissioner's Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF

0303 123 1113
casework@ico.org.uk

Any complaint to the Information Commissioner is without prejudice to your right to seek redress through the courts.

Contact details

The data controller for your personal data is HM Revenue and Customs. The contact details for the data controller are:

HMRC
100 Parliament Street
Westminster
London
SW1A 2BQ

The contact details for HMRC’s Data Protection Officer are:

The Data Protection Officer
HM Revenue and Customs
14 Westfield Avenue
Stratford, London E20 1HZ

advice.dpa@hmrc.gov.uk

Consultation principles

This call for evidence is being run in accordance with the government’s Consultation Principles.

The Consultation Principles are available on the Cabinet Office website: Consultation Principles Guidance.

If you have any comments or complaints about the consultation process, please contact the Consultation Coordinator using the following link: Submit a comment or complaint about HMRC consultations

Please do not send responses to the consultation to this link.