HMRC offers more time for NCTS5 migration - what should firms know?

MIC Products | | MIC Customs Solutions |

What should firms be aware of when moving their electronic customs declarations to NCTS5?

Last month, the UK's HM Revenue and Customs (HMRC) confirmed it would be giving businesses more time to complete their implementation of the latest phase of the New Computerized Transit System (NCTS), with traders now having until the middle of next year to ensure they are ready for the technology.

Phase 5 of the system was initially scheduled to go live on 16th November 2023, but HMRC has responded to concerns from multiple countries that this deadline comes too soon. It has therefore put in place an extension until 1st July 2024.

The delays are said to be primarily the result of the need for additional software development and related testing in order to ensure businesses can remain compliant with the updated system.

A spokesperson for HMRC’s Joint Customs Consultative Committee, which made the decision, wrote in a letter to industry representatives: "From listening to the views of stakeholders, it is clear that there is now strong support for a later implementation date to give industry additional time to prepare.”

What does NCTS5 offer?

The NCTS has been developed by the EU in order to facilitate the management of goods shipments between signatory countries to the Common Transit Convention (CTC). As well as the 27 members of the EU, this covers Norway, Iceland, Switzerland, North Macedonia, Serbia, Turkey, the UK and Ukraine and aims to eliminate many of the complexities and associated paperwork involved with the movement of goods across international borders.

It offers simplified rules, such as mutually recognized financial guarantees for customs transit and fewer controls, helping to cut down on costs for businesses and provide greater flexibility in determining the point of clearance into the EU.

Among the new and improved features of phase 5 are two transit declaration types - standard and pre-lodged - and an Office of Incident Registration that aims to facilitate the electronic reporting of any incidents that take place in transit.

This will allow users to make any necessary amendments to pre-lodged transit declarations made for countries covered by the CTC before shipments take place. There will be a 30-day window in which traders can lodge a declaration ahead of a goods movement.

There will also be an ability to Interface with AES to support ‘Export followed by Transit’ scenarios, while safety and security data will also be included on the outbound Transit Declaration. This will mean all transit declarations will receive an electronic risk analysis to assign a category (green, yellow, orange or red) with supporting documentation submitted via NCTS5.

How can firms ensure they are compliant?

While the delay gives businesses more time to ensure they are up-to-date with the new requirements for NCTS5, it will still be incumbent on firms to ensure they have the right systems in place. NCTS is a legal declaration, so any inaccurate or incomplete information could lead to a range of issues, such as delays in customs clearances.

To ensure firms are prepared, it pays to have comprehensive customs software solutions to facilitate digital declarations. HMRC maintains a list of providers that offer solutions for compliance with NCTS - including MIC, which is certified for use in most European CTC countries as an authorized consignor and authorized consignee.

MIC's electronic transit procedure software offers a range of benefits, including time and cost savings, as well as full transparency into the entire shipment process.