HMRC announces interim Transitional Simplified Procedures for Customs

Wed 06 Feb 2019

In a move to ease business fears over a no-deal Brexit, HMRC have  announced an EU trade simplification which goes further than its initial proposal on ‘postponed Import VAT accounting’ – which would have seen import VAT deferred for all business bringing goods in from the EU.

The Transitional Simplified Procedures (TSP) for Customs are intended to make importing goods from the EU after 29 March 2019 easier and also, it can be reasonably deduced, to ease the potential for gridlock at the Calais/Dover border and our various ports.  HMRC anticipate that the TSP will be in place for a period of more than one year, although it will review the effectiveness of the scheme after 3-6 months of it being implemented.  After any review period, HMRC say they will give businesses a further 12 month notice period until the normal Customs procedures will require to be adhered to.

In summary, the new procedures will cut the amount of information that an importer is required to give in an import declaration when goods are crossing the border.  Importers will be able to defer:

• Giving a full declaration until after the goods have crossed the border; and
• Paying any duty until the month after import.

It will, however, be necessary to have the commodity codes and customs values identified at the point of import.  A direct debit will be required if you wish to use TSP, and the goods that you import attract a positive rate of duty.  This is clearly an attractive cashflow and administrative easement being offered by HMRC.  Applications to use TSP will open from 7 February 2019. Businesses can register for TSP if they:

• have an EORI number (HMRC have reminded businesses that an EORI is required if you will continue to trade with the EU after Brexit.  You can apply here)
• are established in the UK
• are importing goods from the EU into the UK

However, if you currently use one of the existing Customs special procedures, such as the Customs Freight Simplified Procedure (CFSP), or you only import goods from outside of the EU, then you will not be eligible to apply for the TSP.  CSFP status also offers deferred reporting and payment in a similar way to TSP, but without the obligation to have commodity codes and customs values identified at the point of entry.  Those considering operating under the TSP should also consider alternatively whether they can be authorised under CSFP.

HMRC state that they have written to over 145,000 businesses to outline the scheme, however if you have not received this then a copy of the full correspondence can be viewed here.

Please get in contact with the Mazars indirect tax team  if you would like to discuss the TSP, or other tax related import matters in more detail.