What is CDS? And how does it compare to the old, and soon-to-be extinct, CHIEF system?

Customs expert Arne Meilken discusses the new challenges facing UK businesses involved in exporting, importing and the transporting of goods.

What is CDS? And how does it compare to the old

Importers, exporters, customs managers and designated customs agents submit customs declarations – not business owners. However, business leaders will be the ones who suffer the consequences of getting these declarations wrong. Unsatisfied customers, unfulfilled orders, delays, and high costs are all starting to appear on the horizon.

The current customs filing system, called CHIEF (Customs Handling of Import and Export Freight), is being decommissioned over the coming months. In its place will be the CDS (Customs Declaration Service), which businesses must use when declaring goods for customs purposes. Therefore, the moment has arrived to learn about this new CDS system. It’s time to train staff and prepare agents to comprehend the magnitude of the changes involved.

In this article, I will look at the key steps that every company involved in making customs declarations should undertake right now. So what exactly does the implementation of CDS mean for British business and why should companies and entrepreneurs feel concerned?

Customs declaration summarisation is prone to error

Customs declarations have to be submitted via HMRC when importing, exporting or transporting goods to and from or through the UK. Importers, exporters, customs managers and designated customs agents typically submit these declarations.

When submitting a customs declaration, the form has to thoroughly illustrate the precise flow of the goods being declared. It also needs to describe their characteristics, origin, value, transport details, arrival date and time, along with licensing requirements, plus much, much more. The current system, known as CHIEF, will not exist after March 31st, 2023 and is being replaced by the CDS. This will be the UK’s new platform when declaring goods for customs purposes.


Before complete shutdown, HMRC will reduce CHIEF services as follows:

• Regarding CHIEF, new import declarations will be closed by September 30th, 2022.

• On March 31st, 2023, CHIEF will be closed to new export declarations.

What businesses must do and how they should do it

HMRC has advised businesses to take the following five steps immediately:

1: Obtain an EORI (Economic Operator Registration and Identification) number.

2: Apply for a taxpayer ID number.

3: Create an account on the UK Government Portal.

4: Sign up for the Customs Declaration Service (CDS) and notify your software provider to grant access.

5: Instruct your customs agents on how to declare goods using CDS.

Some businesses have already moved in this direction as they prepare for significant changes to the current system – and perhaps some upheaval too.

Comparing the two systems

There are significant differences between CHIEF and CDS: The latter collects and stores data in a slightly different manner. However, the biggest difference, in my opinion, concerns data entry. For users, the CDS is a much more rigid system. Users will need to familiarise themselves with the new, more detailed, coding formats.

Depending on the type of data required, you may need to provide more information to the CDS than the old CHIEF. This can be difficult if you are not experienced at collecting and processing information and data on a regular basis.

And what will you do if critical data is unavailable by October 1st, as stipulated by HMRC. Businesses are advised to send relevant employees on training courses, in order for them to understand the scope of the changes involved. They should also speak to brokers about how best to overcome these new challenges.

CDS dress rehearsal

HMRC has launched a service to test the new system and educate businesses on how to use it correctly. It is a ‘virtual replica’ of the CDS, that will allow businesses to practice data entry and understand the system’s requirements, but without having to submit an official customs declaration. This will allow businesses to make mistakes without suffering any consequences. Practice makes perfect and I recommend that you make use of this ‘virtual’ offering from HMRC.

Instructing brokers

Because extensive knowledge of customs requirements is required, it can often be difficult to instruct a customs agent. Key performance indicators (KPIs) must be established to correctly control your imports and exports, while standard operating procedures (SOP) must be documented properly. Therefore, please contact us if you are uncertain about how to effectively manage your agents.

All about the cash

Payments for customs’ duties (and other taxes) will be handled differently when using the CDS. You may have different options depending on the method of payment you select. It is often more convenient to use a cash account. Deferment accounts can still be used, but may require re-authorisation. Therefore it’s best to make your decision, on how to pay HMRC, by October 1st, 2022.


The change from CHIEF to CDS is significant and must not be underestimated. The agent is only as good as the information you provide them with. And they are only as effective as the instructions they receive. Your imports and exports will suffer if any of these fail.

This is crucially the best moment to learn everything you can about customs declarations. You must understand the importance of submitting them on time, correctly and comprehensively. Only then can you establish a global enterprise for long-term import and export growth.

Arne Mielken
Arne Mielken

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