Minutes of the Joint Customs Consultative Committee
Date of Meeting: 25th February 2015
Location: The Auditorium, 1 Horse Guards Road, Westminster, London SW1A 2HQ
Items discussed in this meeting1. / Introductions and Apologies
2. / Minutes, Matters Arising and Action Points
3. / Update on EU Harmonisation of Customs Penalties
4. / HMRC Penalties: Discussion Paper
5. / Presentation on HMG digital delivery
6. / Update on deemed Review and Appeal cases
7. / DfT FAL Directive
8. / Update on Freight Management Strategy
9. / Customer Experience
10. Tariff Classification Helpline Consultation
11. Sub –group Update
12. Any Other Business
Annexes
A – List of Attendees
B – Action Point Update
C – Update on EU Harmonisation of Customs Penalties
D – HMRC Penalties: Discussion Paper
E – Presentation on HMG digital delivery
F – Sub-group Update
1. Introductions
1.1 The Meeting was chaired by BW. A list of those attending is at Annex A.
The Confederation of British Industry (CBI) has decided to withdraw from membership of the JCCC and its sub committees because customs matters and policy are no longer core priority policy areas for its membership.
GR (Trade Flow Customs Consultancy) who represented CBI continues to represent the Food & Drink Federation.
JO from Airline Operations Committee for cargo UK (AOCC) has replaced BG.
The chairman welcomed new members to the JCCC;
International Meat Trade Association (ITMA) – K D
UK Trade & Investment (BIS) – B C
UK Trade & Investment (BIS) - S M
JM from CITEX, HMRC attended the meeting as an observer.
2. Minutes, action points and matters arising
2.1 Minutes October 2014
The minutes for the last meeting were accepted.
2.2 Outstanding Action Points
All outstanding action points from the last meeting were discharged.
Please see Annex B.
AP7 (AS to facilitate discussion between BF,BIFA and AICES on BF issues) has been discharged however, meetings will be ongoing.
It was felt that BF needed to attend all JCCC subgroup meetings and CSP felt that meetings should be extended to other groups that might be affected so that there is a level playing field and a more consistent approach.
A recent meeting between BF and LHR proved productive. BF will continue to have meetings to help identify and resolve specific locational issues.
AP9 from October’s meeting was for JCCC members to send comments on TORS to JCCC Secretariat. Comments have been received and collated. JCCC members will receive the updated TORS via correspondence.
AP11 from October’s JCCC was for members to receive a presentation on digital delivery. This is a substantive item on agenda.
AP13 for AS to provide an update on SME interaction with Customs has been postponed until after the General Election.
3. Update on EU harmonisation of Customs Penalties
Nadia Sharif
NS (HMRC) provided JCCC members with an update on the state of play of negotiations of the European Commission’s 2013 Directive on Customs Sanctions and Infringements.
The Commission objective is unacceptable from a UK prospective. All MS oppose the proposals which restrict MS compliance strategies. Some MS see benefits but think that proposals are badly drafted.
The UK will continue to play a key role in the debate and is keen to work with industry to ensure that the Commission remains mindful of the need to develop legislation that promotes rather hinders economic development.
HMRC encouraged UK trade associations to lobby through their European trade associations.
Paper is at Annex C.
BW (HMRC) agreed that it is a poor piece of legislation, which would be difficult to implement within UK justice systems. The proposals are not proportionate in penalising genuine errors. It will be difficult to get off the Cion agenda and one tactic would be for the Cion to bring to the table a watered down compromise proposal, potentially acceptable to most MS. The UK were alive to this and remained implacable in our position to kill this dossier or as a minimum render it toothless.
British International Freight Association (BIFA) felt that following the implementation of UCC the legislation may be applicable in some cases. They urged industry and Customs to continue to resist and to be vigilant for the dossier to reappear from another DG.
BW (HMRC) agreed. Cion have been having unsuccessful ‘divide and rule’ bi-laterals to break MS coalition but the UK and the Netherlands have taken a hard line approach in demanding that the current proposal be scuppered.
Community Systems Providers (CSPs) welcomed HMRC’s position on not penalising genuine errors.
KR (HMRC) confirmed that this is what HMRC is working on. We must maintain a flexible approach and penalise when necessary.
BW (HMRC) said that at the moment we have a comprehensive majority of MS who do not support the core measures proposed in the legislation. Therefore, the MS coalition must continue to stay strong and the UK will continue to work with other MS on this dossier.
4. HMRC Penalties: Discussion Paper
Jon Evans (HMRC)
John Evans from HMRC’s Tax Administration Policy Team updated JCCC members on a recently published consultation on HMRC penalties. Paper at Annex D.
The document is made up of five main sections:
1. HMRC is changing: becoming digital-by-default with services are designed around our customers enabling a ‘single view’ of their tax obligations.
2. The work also should be seen in the context of HMRC’s Compliance Strategy ‘Promote, Prevent, Respond’ with upstream activity helping customers ‘get it right first time’ to focus compliance activity on the deliberately non-compliant.
3. Penalties play an important role in the compliance strategy both promoting compliance whist discouraging non-compliance, showing that it doesn’t pay.
4. HMRC is aware that many people are frustrated by current issues with penalties, and gives examples of some that have been raised with us. Does industry agree with issues identified so far? Are there any more?
5. Our future approach to penalties will be focused around five principles, with some ideas for the future taking into account HMRC’s future vision. Does industry agree with the principles and ideas discussed in the document? What else does HMRC need to consider?
The document has been published at Stage 1 of the tax consultation process seeking a wide range of views to inform ongoing thinking. As and when more detailed proposals are developed, these will be published for consideration in the usual way.
Industry have an opportunity to present their views and have until 11th May to provide written feedback.
The discussion document can be found at:
https://www.gov.uk/government/consultations/hmrc-penalties-a-discussion-document.
CSPs stated that there was an overlap with other initiatives such as tariff classification and asked for the JCCC Secretariat to send the link to him so that it can be circulated to trade for comment.
BIFA requested Gov.UK link for email alerts.
AP1 Secretariat to record in JCCC minutes the Gov.UK link for email alerts and twitter link for HMRC Penalties: a discussion document
Society of Motor Manufacturers and Traders (SMMT) felt that a consistent application for penalties is a key issue for many people.
5. Presentation on HMG: Digital Delivery
Beverly Martin (HMRC)
Beverley Martin provided a presentation on HMG’S digital delivery strategy and HMRC’s digital strategy, which is due to be published in the summer.
HMRC is working with customers to develop the strategy which puts customer needs at the centre of the strategy. The strategy will allow the honest majority of customers to control their tax affairs on-line enabling HMRC to direct compliance resource where it is most needed.
CSPs found the presentation useful but felt the focus is on personal tax rather than customs. CSPs asked for a twitter address for the strategy and also asked how customers reported security issues such as spoof accounts.
External customers should forward any suspicious emails to:
Also, available is HMRC’s guidance on recognizing scams to assist in deciding whether an email is suspicious.
British Association of Ship Suppliers (BASS) welcomed the presentation but wanted to know how it affected trade working in the custom’s sector.
AS (HMRC) confirmed that customs is involved in developing the digital strategy however, the roll out is focusing on other departmental priorities at the moment e.g. PAYE. In time though customs will migrate to business tax accounts. All customs material has now been removed to GOV.UK and HMRC is working with UKTI and BIS to streamline the navigation of the information that has been transferred across.
Association of Freight Software Suppliers (AFSS) stated that from a trade perspective more needs to be done in order to keep customs IT running. As HMRC becomes more dependent on digital delivery, some services are falling and there are too many planned outrages.
MC (HMRC) felt that they had a valid point and as CDS move to common components HMRC do not want to lose access when other taxes go down. They are working with the technical and infrastructure design team to insure that the new infrastructure architecture addresses this.
CSPs said that they understood that the government gateway was to be replaced with Application Programme Interfaces (API) so there was no single pinch point.
SC (HMRC) confirmed that CDS are working towards a digital infrastructure and are undertaking user engagement as part of the discovery phase.
BW (HMRC) concluded that CDS is part of the HMRC digital strategy. We are moving into a completely different world and HMRC needs to inform trade how this impacts on customs.
The slides used for the presentation on digital delivery is available at Annex E.
6. Update on deemed Review and Appeal cases
Karen Rourke (HMRC)
At the June JCCC the Customs Practitioner Group (CPG) produced a paper on the current procedure of dealing with deemed R&A cases and the issue that the Review and Appeals Team have been unable to complete formal departmental review within 45 days.
KR (HMRC) provided an update and said that there have been significant changes. They have recruited a new team manager and three new review officers.
They have review 470 cases this financial year. 70% have been dealt within the 45 day deadline and 30% of cases have been completed by the extension date.
It takes about two years for new officers to become fully experienced however, the team are always happy to listen and resolve any issues that trade have.
BASS requested a one pager crib sheet which set out step by step the review and appeal process.
AP2 KR to contact Central Policy to establish if a ‘step by step’ chart exits for Review and Appeal cases
CPG confirmed that their members have noticed a marked improvement on the treatment of review and appeal cases.
7. DfT FAL Directive Karen Rourke (HMRC)
KR (HMRC) updated JCCC members on the proposed solutions emerging from the DfT FAL Directive.
The Directive which is coming out this year aims to simplify and harmonise maritime declarations. IMA FAL forms and cargo declarations are within the scope of discussions to move to an electronic, advance, single window environment.
There will be a many channels into the single window sitting alongside legacy channels and DfT is talking to HO about using their collaborative business portal. Ft.’s view is that this is the first stage of a longer term programme.
Association of International Courier and Express Services (AICES) questioned how the Directive fitted with cargo data e.g. ICS.
KR explained that there is no change for customs systems and this is a DfT led project. However, information captured from FAL data will be used by HMRC. There is no link with UCC as this is maritime ship’s arrival data not manifest data. Ship’s stores data will continue to come to HMRC but electronically.
Chamber of Shipping (COS) said they have had no contact from Ft. A lot of the data is of no interest to customs and there is tension among members regarding the ship’s reporting requirement. The Directive is about ‘how’ not ‘what’ and intra EU requirements don’t always exist. They are aware that DfT is leading on this and what is important is that the Directive is delivered sensibly and properly.
The DfT contact is:
8. Update on Freight Management Strategy
Sally Thurlow (HMRC)
Sally Thurlow (HMRC) provided an update on the Freight Management Strategy.
This piece of work is being undertaken jointly with BF. The proposition was endorsed by HO and HMT ministers in September 2014.
There is on-going engagement with DfT, BIS and DEFRA. The steering group is chaired by Bill Williamson and Phil Duffy.
The strategy is based on four pillars:
Pillar 1 – Co-ordinated border management
There are between 21-23 different agencies operating at the border which makes co-ordination difficult. HMG needs to operate more effectively and cooperatively at the border.
Pillar 2 - Data improvement and targeting based on Intel and risk assessment.
There are a significant number of systems which need to be able to work more effectively. This will improve on targeting, intelligence and risk profiles making intervention more effective and precise.
Pillar 3 – Supply Chain and border security based on customer compliance.
Maximising the use of trusted traders. BF has concerns about human trafficking and terrorism, and are looking at voluntary disclosure of intra-community data to tackle this and screen out innocent traffic.
Pillar 4 – Regeneration of customs capability
BF and HMRC both have demographic issues so are now looking to develop a succession plan and develop a customs career path across BF and HMRC. This will include commercial awareness.
BW (HMRC) confirmed that due to Purdah HMRC is unable to share more information at this time. A series of proposals will be submitted to the new Government.
AP3 Agenda Item for June JCCC – Update on Joint Freight Management Strategy
CSPs felt that there was not enough engagement with trade. There is a big responsibility on trade systems to provide support.
MC (HMRC) said that this will be pursued after the election. Cross government view needs to be established first. Then political backing before fully engaging with trade.
ST (HMRC) confirmed that the aim is to co-ordinate with all government agencies. There are different challenges and they are looking to test the target operating model concept. We need to validate our thinking and enhance our ideas. Communication with trade will increase.