How to Use Customs Freight Simplified Procedures (CFSP)
If your business will import any goods from outside the EU (European Union) this freight must be tracked using what is called the CFSP or Customs Freight Simplified Procedures. This is an electronic system that HM Revenue & Customs (HMRC) use to help businesses in the UK import goods from countries outside the EU (called Third Countries) efficiently. If your business uses the system it will be able to transport goods to the UK and move them through customs quickly, thus saving time and money.
Your business does not have to use CFSP, but most businesses that transport freight from any Third Country find it useful. There are two basic CFSP systems your business can use:
- Simplified Declaration Procedure (SDP)
- Local Clearance Procedure (LCP)
Your business or the agent you are using to handle your imports must be authorised by HMRC. This is especially important if your business will also be claiming any customs duty relief on the freight you import. The HMRC may inspect your business’s accounts, and visit your premises. The HMRC website contains more information about how to get authorisation to use the CFSP system.
How the CFSP System WorksWhen your business transports its goods from the country outside of the UK, they will arrive at a port of entry. At this stage you should have a Simplified Frontier Declaration (SFD). In most cases your business will also have to submit to HMRC a Supplementary Declaration (SD). You or your agent can use the SD alongside the full CFSP declaration so create an efficient customs system your business. Note that in all cases HMRC treat your consignments in the same way as any other goods. If your goods need special certificates such as veterinary clearance, you are responsible for providing these when your transport your freight to the customs post for clearance.
In addition to the above, your freight should also usually travel with a completed SAD (Single Administrative Document). You can submit an electronic SAD via the CHIEF (Customs Handling of Import and Export Freight) system.
Paying Customs DutyFreight that you bring into the UK that customs have cleared will then need its duty paying in full. You can, however, set-up what is called a duty deferment account to help your business better budget for the duty payments it has to make on its imported goods. Your business will usually have to provide a guarantee of financial security that shows HMRC that your business is solvent enough to pay the duty you want to defer.
Generally, this amount is what you business would normally owe in duty or VAT for one month. You can, however, reduce these amounts if your business uses SIVA (Simplified Import VAT Accounting). The HMRC website has more information about how apply to use the SIVA system.