HMRC’s guidance begins with a warning, that they expect importers to make correct and compliant declarations, for goods arriving in future and this will be monitored, in order to deal with repeated non-compliance.
Where goods have been imported without submission of a customs declaration, this is non-compliant and civil penalties could be charged, where HMRC considers it appropriate. Depending on the goods imported, a liability to import VAT may have been incurred, plus a customs, or excise duty liability.
Submission of a retrospective declaration is not the legally correct way to regularise the position, however, in order to satisfy the obligation to pay any outstanding liabilities, importers or their agents have two options, where the second option is available if the first cannot be used.
Neither option will result in a legal import declaration, as it will be a non-statutory declaration, but it will allow the importer to settle any outstanding liabilities. Settlement of liabilities will be a significant factor in HMRC’s decision as to whether civil penalties should apply.
Submit a full import declaration to free circulation, as soon as possible
Since goods have been imported non-compliantly, it will not be possible to declare goods to a customs special procedure, or an excise duty suspension arrangement. The importer should submit a full non-statutory import declaration, within one calendar month of the goods being imported into Great Britain. If the importer is already in this position at the time of publication of the guidance (7 July 2021), the timeframe is one calendar month from the date of issue of the guidance.
Since CHIEF and CDS cannot accept retrospective declarations, the date of submission of this non-statutory declaration, will be the date for which any tax or duties due on imports will be calculated.
To ensure that the right amount of any tax or duties due on imports is charged, the importer should:
- Check to see if HMRC exchange rates have changed in the period between the actual date of import and the date of declaration (intervening period). If so, the importer must convert any non-Sterling values at the exchange rate at the date of actual import
- Check to see if the rate of any tax or duties due on imports has changed. This should be checked for the dates starting and ending the intervening period, using the Trade Tariff tool. If no rate change, the full import declaration can be submitted
If a full import declaration cannot be submitted as above, option 2 must be used.
Again, since goods have been imported non-compliantly, Postponed Import VAT Accounting (PIVA) cannot be used, to account for import VAT on the VAT return. Import VAT must therefore be paid, when the non-statutory declaration is submitted.
Submit a supplementary declaration to HMRC, as soon as possible, showing the correct date of import
Option 2 requires the importer to be authorised for Simplified Declarations for imports, or to appoint an authorised agent. If already authorised, or using an authorised agent, the importer is expected to make the non-statutory supplementary import declaration, as soon as possible.
If not authorised, the importer is expected to use an authorised agent, or become authorised as soon as possible after the need to make the declaration was identified. HMRC expect this to take no longer than four months. Evidence of steps taken to pay outstanding liabilities should be retained, in case the goods movements become subject to compliance checks, in the period before the supplementary import declaration is made.
Note that, if the importer wishes to make a tariff rate quota claim, this needs to be included in the declaration submitted.
Option 2 can also be used to declare goods to free circulation, in a case where a transit movement has not been correctly closed. Submission of the non-statutory declaration can be used as evidence that the correct duties have been paid for these movements, which should help get the movements discharged, in the country of origin. Non-statutory declarations will not, however, retrospectively close the transit movement.
As for Option 1, PIVA cannot be used.
The above guidance is useful, but also demonstrates that HMRC will be taking non-compliance seriously, so if any importers are in this position, they are strongly advised to take the necessary action to regularise the position and pay any import taxes owing.