CDS risks remain, says National Audit Office

Risks remain to the delivery of HM Revenue & Customs new CDS computer system, said the National Audit Office (NAO) in a progress report updated published on 28 June. However, it acknowledges that progress has been made. CDS (Customs Declaration

Service) is HMRC’s replacement for the Chief computer system which is being implemented between now and early 2019 – just weeks before the UK is due to exit the European Union. The NAO report said that

while testing of CDS is continuing, HMRC will not know whether it works in live service until it has implemented all the functionality in December 2018. However, the late release of functionality and migration of users increases the risk that there would be insufficient time to resolve any issues identified with the last release – not to mention any problems that emerge in the live environment, as is common with IT systems, it said. HMRC is unlikely to complete

the migration of all users to CDS in January 2019, the report continued, as traders who export goods will only have one month to complete the process. HMRC is considering whether it can bring forward its November and December releases or reduce the time available to some users to migrate on to CDS. However, this may not be possible if the development of the CDS system continues to progress at its current rate, or if CDS users are not able to respond quickly enough. Traders will continue to have

access to Chief, which will continue running alongside CDS, for a period aſter January 2019. However, this could actually delay completion of

migration as traders may continue to use Chief for longer than necessary. Key organisations that need to

change their soſtware and business processes to use CDS may also not be ready. According to a NAO survey in February and March, community system providers (CSPs) and customs soſtware suppliers are not yet confident that the full scope of CDS will be ready by January 2019. NAO adds that the change in

release strategy means that HMRC will now be developing and testing the new system at the same time as it migrates users. This increases the risks to the programme because traders involved in the first release will have to support a further two releases and associated changes to their own systems and processes before the end of the year. NAO says that it is critical that

HMRC fully tests and scales- up its contingency option over the summer of 2018, supports delivery partners such as CSPs and soſtware providers to make necessary changes to their own systems, communicates effectively with traders about new customs processes and migrates them successfully on to CDS. While HMRC’s communication has been generally good, technical information has consistently arrived late, and has not always been complete or sufficiently detailed. In March, four out of five CSPs and 14 out of 19 customs soſtware suppliers surveyed were uncertain

about exactly what

changes they needed to make to their soſtware and therefore when their systems would be ready for users to submit customs

All hail to the new customs computer chief

HMRC’s 1980s-vintage Chief computer system has served the trade well in the quarter century since it was introduced in 1994, but now is the time to move on, BIFA policy and compliance advisor Pawel Jarza told a seminar on its replacement, CDS (Customs Declaration Service). The Union Customs Code (UCC),

introduced in 2016, spelled the end for Chief, he told the event, jointly organised by BIFA, HMRC and

soſtware house ASM. UCC introduced the EU Customs

Data Model (EUCDM), itself based on the earlier, internationally agreed World Customs Organisation Customs Data Model (WCOCDM), Jarza explained: “EUCDM will be the basis of every customs declaration, and aims to standardise everything we do, and the responses from Customs.” M o re ove r , EUCDM also

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declarations. HMRC has started to

communicate with existing traders and other users who regularly engage with Chief but there is a lot more to do. In particular, it has not yet started communicating with at least 145,000 EU-only traders

Issue 5 2018 - Freight Business Journal

about CDS, who may need to make customs declarations once the UK leaves the EU. In light of the continuing uncertainty about the customs arrangements that


apply from March 2019, HMRC has prepared, but not yet started, a communications campaign for these traders, which it is keeping under review. HMRC is confident that Chief will be able to handle the 255 million declarations that might be required aſter the UK leaves the EU,

but scaling it significantly beyond this would be more difficult. The report says that HMRC should ensure it has the system capacity to handle customs declarations no matter what the outcome of negotiations between the UK and the EU, noting that the ageing Chief system would be too expensive and difficult to upgrade to meet the long-term requirements of the Union Customs Code. The report also highlights difficulties in integrating CDS with

HMRC’s main finance

3 system,

which has been more complex than expected and was not completed in April 2018 as planned. Instead, it will initially integrate CDS with the legacy finance system currently used for indirect taxes (CECAS) which, HMRC says, offers all the functionality that CDS requires in the short term. It continues to work on integrating CDS with its main finance system and expects to complete this work by January 2019.

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