13th January 20233 customs duty updates you need to be aware of

As you may be aware, the shutdown of the CHIEF system was due to be finalised in the first quarter of 2023. However, recent updates from HMRC have extended this timeframe. Gerry Myton, Tax Partner, shares an update on 3 Customs Duty changes you should be aware of going into the new year.

  1. CDS Update

HMRC is replacing the Customs Handling of Import and Export Freight (CHIEF) system with the Customs declaration Service (CDS). The shutdown of CHIEF will be done in two phases – the first phase has already been completed with the shut off of Customs Import declarations on 30 September 2022.

On 15 December 2022, HMRC announced that they will be extending the deadline for the second phase following a consultation with the border industry. The original plan was for CHIEF to be shut off for export declarations from 31 March 2023. However, HMRC have now made the decision to extend this by 8 months to 30 November 2023. After this point, CHIEF will no longer be in use, and exporters will be required to submit export declarations via CDS.

For more information on CDS, please see Customs Declaration Service – The New CHIEF.

  1. Alcohol Duty Reforms

HMRC will be making changes to the duty structure for alcohol duty in an effort to standardise the tax. Businesses involved in manufacturing, distributing, holding or sale of alcohol will be affected by these changes.

With effect from 1 August 2023, new standardised bands are being introduced across all types of alcoholic products, with tax rates being calculated based on the nature of product and litres of pure alcohol. HMRC will also be introducing new reliefs and a temporary easement:

  • Small Brewers Relief Scheme is being replaced and extended – small businesses who produce any alcoholic products with ABV of less than 8.5% will be eligible for reduced rates of alcohol duty on qualifying products
  • Draught Relief will reduce duty on draught products under 8.5% in large containers holding at least 20 litres.
  • A temporary easement for some wine products, to treat all wine ‘of fresh grape’ between 11.5% and 14.5% ABV as if it is 12.5% ABV for calculating duty. This will be in place for 18 months from the 1 August 2023 and is aimed to assist wine producers in managing the new alcohol duty rates.
  1. Trader Support Service – Update

The Trader Support Service was set up to assist businesses with understanding the new rules on movements of goods between Great Britain and Northern Ireland. The service offers guidance and training on the Northern Ireland Protocol, and provides a call centre for traders.

A key element of the Trader Support Service includes a facility to complete customs import declarations and safety and security declarations on behalf of traders. HMRC have confirmed that they will be extending the Trader Support Service until the end of December 2023.

To discuss any of these changes in detail or how they impact your specific circumstances, please contact Gerry Myton

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