From 1st January 2021 UK importers of non-controlled goods will have access to a process known as CFSP EIDR (Customs Freight Simplified Procedures, Entry In Declarants Records) formerly known as Local Clearance Procedure (LCP). CFSP EIDR will be accessible to Traders without the need for authorization until 30th June 2021. If a Trader decides to use CFSP EIDR after this date they would formally need confirm this to HM Revenue & Customs (HMRC), as this will not be freely available after 1st July 2021.
CFSP is an existing electronic customs declaration system to enable smoother and quicker customs clearance.
Entry in Declarants Records (EIDR) allows traders to release goods to a customs procedure for imports from a third country. EIDR can be used to enter goods into Free circulation, Customs Warehousing, Processing, Specific Use or for Export / Re-Export purposes.
All goods can be imported using EIDR unless they fall under the following categories:
§ Hydro Carbon Oils
§ Items on the Controlled Goods List – this also includes Common Agricultural Policy (CAP) goods, excise goods, un-manufactured tobacco and tobacco refuse.
When using EIDR under Simplified Procedures the following benefits can be achieved:
§ The ability to enter goods to a customs procedure without providing a full customs declaration at the point of entry.
§ The ability to move goods between certain customs procedures via an entry in the declarant’s commercial records
§ Quicker release of Trader shipments at the frontier.
§ Cash flow improvements for a Trader, as import VAT and Duties would not be paid until a later date.
§ The ability to process supplementary declarations electronically either for individual shipments or in bulk.
§ The ability to use an intermediary to submit electronic declarations on the Traders behalf.
By using this simplified procedure, a Trader can enter goods into their own commercial records and send a supplementary declaration to UK Customs no later than the 4th working day the month after. For any goods that will be imported from the EU from the 1st January until 1st July 2021, the supplementary declaration can be completed up to 6 months after the date the goods were imported.
What must a Trader do?
§ All Traders using this simplification method must maintain records for all declarations under CFSP EIDR for no less than 4 years. The specific records that need to be kept can be viewed in Customs Notice 760.
§ Supplementary declarations (SDI) must be made by the agreed time frame with HMRC, quoting the relevant Customs Procedures Codes (CPC).
§ Traders must define who, what, where, when and how the CFSP EIDR records will be maintained.
§ Traders must keep a clear audit trail, and ensure your records are backed up and kept secure.
How does a Trader account for Import VAT under EIDR?
On the 1st January 2021 the UK will introduce Postponed VAT Accounting also known as PVA. This is a deferred import VAT scheme being introduced by the UK government. This permits UK VAT registered businesses can ease business cash flow by not having to make Import VAT cash payments upon import, as it allows them to pay import VAT on their regular VAT return.
This option will cover 3rd country import VAT.
UK imports will be able to account for import VAT under PVA in the following circumstances:
§ The goods imported are for use in the importers business
§ When an importer includes their EORI number and VAT number on the customs import declaration
Postponed VAT reporting will be mandatory for Traders using EIDR from the 1st January 2021 to 1st July 2021.
Postponed VAT Accounting users will need to register using their government gateway ID, this will provide the Trader with monthly reports on Import VAT due. This report will show all customs import declarations that have been submitted for the previous month into Postponed VAT.
PVA monthly statement will show the correct amount of import VAT due on that declaration. They will then be able to adjust any estimates and account for any difference on the next VAT Return.
This will enable Traders to pay import VAT as part of their VAT return. No authorization will be needed to use Postponed VAT Accounting however a Duty Deferment Account will be required for paying any Customs Duties.
Although EIDR will allow faster release of goods, use of simplified customs declarations and create cashflow benefits to Traders; this can be out-weighed by the cost of implementing CFSP software.
Many businesses find using an intermediary a cost-effective and efficient way to deal with customs formalities.
With any decision a Trader would make, it would need to be clearly understood and identify what the business requirements are under EIDR along with the cost implications to be incurred?
Comments