BIFAlink


Policy & Compliance CDS methods of payment


Following the announcements in April about the revised implementation schedule of the Customs Declaration Service (CDS), more information regarding the technical aspect of the system is becoming available


In previous issues of BIFAlink we looked at the CDS tariff and how it differs from the CHIEF tariff. As more specific technical information is available, BIFA will be looking at individual functionalities of the new system. One of the key functionalities of any customs


system is the duty/tax payment mechanism. Today, CHIEF operators in general use two main methods of payment of import taxes, namely the Duty Deferment Account for deferred payment and the Flexible Accounting System for immediate payment of customs duties. CDS will, in principle, replicate this


arrangement although there will be a number of differences and new features available in this upcoming system are not currently available in CHIEF.


Customs Comprehensive Guarantee The Duty Deferment Account will in principle function in a very similar manner to how it operates in CHIEF. Most importantly, users will still have to secure a Customs Comprehensive Guarantee as this is a legal requirement unrelated to the duty processing system. Migrated users will also have the enhanced ability to check deferment details on gov.uk. This will include the ability to view the balance/limits on a deferment account(s) or download duty deferment periodic statements and C79 certificates. What will, however, distinguish CDS from the


legacy system is the Deferment Account Top-up functionality, which will allow users to make an interim payment into their DAN to cover for an unexpectedly high output. This functionality is not currently available in CHIEF and many users


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will welcome the introduction of such a facility. Users will, however, still need to be cautious


because there will be one fundamental difference in the payment module between the two systems. Once a customs declaration submitted to CDS has been accepted, the submitter will not be able to change the method of payment. As we can see, the above top-up functionality is being introduced in part to remedy this potential inconvenience caused by that restriction, but traders will still have to be more aware of the funds available when the deferred payment method is used. Further changes will apply to the immediate


payment system, which in CHIEF is done via the Flexible Accounting System (FAS) and in CDS will be done through the Cash Account. Although again in principle the two systems will be very similar, the Cash Account should be able to offer more flexibility than the legacy system. Like FAS, the Cash Account can only be used for frontier declarations and it will not be possible to prioritise declarations for clearance. But unlike FAS, it will not be limited to DTI traders but will


be created automatically when a new user is subscribed to the CDS service. CDS users will then be able to control their Cash Account through the digital dashboard accessible online.


Authorisation procedure This new functionality will also mean that, similar to the use of DAN, agents using their customers’ Cash Account will need to be authorised to use it either on specific, time limited or standing basis. Cash Account holders will be able to handle the authorisation procedure through the digital dashboard and authorised traders will also be able to check the authorisations they hold. CDS will verify this at the point of declaration submission. As it may be evident from the above


comparison, the payment functionality in CDS will largely resemble the system CHIEF users are familiar with today. There will be a number of differences though which may require traders to adjust their processes and procedures. Members should be aware of those and when ready for migration act accordingly.


May 2020


www.bifa.org


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