Compliance with customs obligations doesn’t necessarily need detailed expert knowledge of all things customs (though it helps!), and on a practical level, few businesses have the resources to devote to managing customs compliance to a gold standard level. It is, however, important for a business to recognise that a) compliance is essential, and b) there is help available.
Where the risks often arise working with customs agents
Most UK importers rely heavily on the services of their carrier / customs agent. In reality, the vast majority of these intermediaries are focused on getting shipments cleared and delivered as efficiently as possible, which is fine, but it leaves the importer responsible to HMRC for the accuracy of import declarations made in their name. Many businesses rely of their agent, but few have a watertight procedure to provide accurate clearance instructions to an agent, or to check the declarations made on their behalf. Unsurprisingly, one of the first questions raised in a customs audit is a request for evidence that a business has strong controls over its interactions with its authorised customs intermediaries.
Documented instructions to agents is a great line of defence in the event that an error is made, and in any case is very much best practice. But good compliance goes further than that:
The key details which need to be communicated to agents, in order for them to submit an accurate customs entry, include:
Commodity code
How can you be sure this is accurate?
Customs value
This might not necessarily be the invoice value of the goods – there could be additions or deductions to consider, especially if buying from a related party.
Country of Origin
For preference purposes, there are detailed rules of origin for goods. Spoiler alert – it’s not always the same as the country of despatch!
Customs duty reliefs
Are the goods eligible for relief from customs duty and/or import VAT? If so, make this clear to your agent.
As mentioned above, it’s not essential to have in-house expertise in all these areas, but an awareness of the importance of these subjects, and where to get help is a really good starting point.
We can help reduce risk and duty costs
Menzies’ Customs team can deliver training, can review and analyse customs data, can support with implementation of meaningful procedures and advise on wider supply chain matters. Our aim is to help clients to comply with their customs obligations, whilst avoiding overpayments of duty. When things go wrong, for whatever reason, we can support with resolving any HMRC enquiries. If you would like to understand how Menzies’ Customs team can help your business, please contact our Customs Director, Ian Worth at iworth@menzies.co.uk
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