The following guide to the current system for Customs Handling of Import and Export Freight (CHIEF) examines the process and purpose behind CHIEF, in the context of traders importing goods into the UK — from how this online system works, and what and who it’s designed for, to the fallback options to enable importers to complete the necessary customs formalities.
What is the CHIEF system?
The CHIEF system is the current national online computer system used by HM Revenue & Customs (HMRC) to manage customs and related processes, including trader declarations. The Customs Handling of Import and Export Freight (CHIEF) system records the movement of goods into and out of the UK by land, air and sea, and allows importers, freight forwarders and exporters to complete and submit customs formalities electronically.
CHIEF is part of HMRC’s risk assessment process, identifying consignments, or goods within a consignment, which need to have their documentation examined or be physically examined. In this way, the CHIEF system gives legitimate goods, and those deemed to be a low-level risk, faster passage when they’re directly imported from, or exported to, third countries.
There are also five independent trade systems, known as Community System Providers (CSPs), that directly serve hundreds of carriers, freight forwarders and transit sheds to record and track the movement of goods within ports and airports, enabling them to operate more efficiently. CSPs are customs-approved third party service providers that directly interface with HMRC frontier systems. CHIEF expedites imports by connecting with all five CSPs.
What is the purpose of CHIEF?
HMRC is the UK’s tax, payments and customs authority where, amongst other responsibilities, it facilitates legitimate international trade, protects the UK’s fiscal, economic, social and physical security, both before and at the border, and collects UK trade statistics.
The CHIEF system is therefore designed to fulfil various key functions for HMRC:
- identification of goods which require physical or documentary examination, making use of a highly sophisticated risk profiling system
- the protection of UK society by controlling the import and export of restricted goods, and helping to effectively detect the smuggling of prohibited goods
- the accurate collection of information for international trade and transport statistics
- recording, monitoring and accounting for duties and taxes incurred by individual importers
- the collection of £billions of revenue each year.
However, for its users, CHIEF also provides a number of services and benefits, including:
- direct trader access to electronic processing of both imports and exports, including, for example, the automatic clearance of consignments coming into the UK
- the calculation of any applicable duties, currency and quantity conversions
- a means of electronic communication between customs and business users
- validation of the accuracy of data input, where the CHIEF system automatically checks for entry errors and advises users about these errors.
Who is the CHIEF system used by?
The CHIEF system is used by both importers and exporters to make trader declarations of the goods being either imported into the UK or exported out of the UK. For the time being, this is the primary means of making declarations for imported goods to clear the UK border.
Import declarations need to be made by all traders bringing commercial goods into the UK from outside the European Union (EU) and, from 1 January 2022, any businesses moving goods into Great Britain from the EU also need to submit customs declarations as goods move through ports. Import declarations through the CHIEF system will be required if either you’re importing goods to sell, process or use in your business, or — depending on the nature, value and weight of the goods — if you’re bringing in goods in your luggage, car or van, provided the goods are for commercial use. These are known as merchandise in baggage goods.
How do importers register for CHIEF?
If you’ve not submitted an import declaration before, you’ll need to register to use CHIEF. To apply to access the CHIEF system, you’ll first need a badge from one of the five Community System Providers (CSPs). You’ll then need to apply to HMRC using an online interactive form. This will require disclosure of your full contact details so that these can be linked to your CHIEF badge. To successfully access the CHIEF system, you’ll also need to provide:
- your Economic Operator Registration and Identification (EORI) number
- which CSP you’ll be using
- the badge allocated by the CSP
- the port or location in which your goods will travel through
- the Entry Processing Unit (EPU) number.
You need an EORI number beginning with GB to import goods into Great Britain (England, Wales or Scotland). You can apply online to obtain an EORI number. Even if you already have an EORI number, you’ll need a new number if your existing one doesn’t start with GB. If you’re moving goods from Northern Ireland you may need one that starts with XI.
You can hire someone to deal with the customs process and import declarations on your behalf, or you can do it yourself. Most businesses that import goods will use a freight forwarder, customs agent or broker, or a fast parcel operator. For example, a freight forwarder will arrange clearing your goods through customs. They’ll also have the right software to communicate with HMRC’s systems. However, if you’re choosing to submit import declarations yourself, rather than using a third party to do this for you, you’ll need to invest in compatible commercial software to be able to submit declarations through the CHIEF system.
How do importers use the CHIEF system?
Having completed the registration process, and invested in the necessary software, you can start submitting import declarations to the CHIEF system. Customs also permit the submission of manually completed import declarations, although electronic declarations are typically much easier, quicker and beneficial for importers.
When making an import declaration through CHIEF, you’ll need to complete a number of mandatory fields including, for example, the commodity code for any goods you import, their place of origin, their departure point and destination, and their weight, value and quantity.
Once submitted, and provided your import declaration is accepted, HMRC will send you an acceptance message, changing the status of your declaration to “accepted”. This will be followed by a release message, changing the status of your declaration to “completed”.
What is the Management Support System?
The Management Support System (MSS) is an interfacing database with CHIEF. This contains archive data for all cleared customs declarations for imports, allowing importers to purchase an annual subscription, or one-off report, to keep accurate records of their consignments.
MSS reports provide clear proof of what import data has been declared, so can be useful for customs audits. They can also reduce the amount of administration needed to be undertaken by importers, for example, the system contains the total duty paid against the value of goods entered for imports. The MSS offers a sample report of one month’s recent import data to enable importers to assess if a subscription to the scheme will be of benefit to them. It also offers standard reports covering import item, import entry and import tax lines, as well as customised reports containing additional data items or historical data.
As an importer, it’s your responsibility to correctly declare imported goods, even when using an agent. Larger traders with multi-site operations can find it especially difficult to keep records of imports due to the number of different locations and customs agents, so paying for the MSS can be an effective way of simplifying and improving the accuracy of import records.
What happens if CHIEF is unavailable?
There may be times where the CHIEF computer or the local computerised inventory control systems are not available. If unavailable, there are two main types of fallback procedures available to importers: short-term, where the CHIEF system isn’t available for up to 24 hours, and long-term, where the system isn’t available for more than 24 hours.
Short-term procedures during fallback allow for the manual processing by HMRC of import declarations and other documents, and for the clearance of goods, but still require that the declaration information is sent electronically once the system is operational again. In contrast, long-term procedures don’t require that the import declaration information is keyed into the computer system at a later date. The relevant forms must be headed “Fallback” in red ink, and importers must also keep copies of all forms that they fill in under the fallback procedures.
When connectivity to the CHIEF system is unavailable for just a short period, any fallback measures will not necessarily be invoked by HMRC. However, once it’s been confirmed that some available routes have been out of use for at least half a working day, and expected to be unavailable for the foreseeable future, alternative fallback options may be invoked, albeit only to enable entry procedures for users of the affected access routes.
What support is available when using CHIEF?
There are plenty of links available online through GOV.UK for help in accessing and using CHIEF, together with various support options from HMRC. However, given the importance of making correct import declarations — where errors can lead to the seizure of goods and the imposition of penalties — plus the cost of buying specialist software to complete your own declarations, you may prefer to instruct someone else to deal with the customs process.
Before you get help in transporting goods and/or making import declarations, you’ll need:
- an accurate description of the goods you’re importing into the UK
- documentary evidence of the goods you’re importing, for example invoices or contracts
- any appropriate licences or certification for goods which are restricted
- your EORI number.
You’ll also need to check with the person or business dealing with customs for you whether you need to provide anything else. Finally, you’ll need to confirm in writing the terms and conditions of your representation and keep a copy of this agreement for your own records.
When hiring someone else to act on your behalf, you’ll still be liable for keeping records, the accuracy of any information provided on your customs declarations, and for any customs duty or import VAT due. It’s therefore vital that you provide any freight forwarder, customs agent or other intermediary with the correct information and keep clear records of this.
What is the Customs Declaration Service?
The Customs Declaration Service (CDS) will be the long-term replacement for the current CHIEF platform. HMRC has announced that the CDS will become the UK’s single customs platform with effect from 31 March 2023, when it will close its’ CHIEF system. However, the functionality of CHIEF will be withdrawn in two stages: import declarations will close on 30 September 2022, followed by the closure of export declarations on 31 March 2023.
The CDS is currently used for import declarations on goods movements from Northern Ireland, but will soon be the permanent replacement system for all import declarations. Detailed guidance on preparing to use this new declarations system can be found at GOV.UK.
UK import licence FAQs
What is CHIEF system?
The Customs Handling of Import and Export Freight (CHIEF) system records the movement of goods by land, air and sea: allowing importers, exporters and freight forwarders to complete customs formalities electronically, and automatically checks for entry errors.
What is the difference between CDS and CHIEF?
CHIEF (Customs Handling of Import and Export Freight ) is HMRC’s current online system for trader declarations, whilst CDS (Customs Declaration Service) is the proposed permanent replacement to record the movement of goods by land, air and sea.
How much is the CHIEF system?
Customs don’t charge for use of the CHIEF system, although you can pay someone to submit declarations on your behalf, for example, a customs agent or freight forwarder. To complete your own declarations, you’ll need to pay for specialist software.
How do you use the CHIEF system?
To use the CHIEF system to submit import or export declarations electronically, you’ll first need to register with HMRC. You’ll also need compatible commercial software to be able to interact with HMRC’s online system.
The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.