5 Key Questions on Customs Compliance

28 February 2022

We're working with many businesses who are finding Customs Compliance increasingly challenging.

Here are some of the most common queries we receive:

  1. What are my responsibilities when it comes to imports and exports?
  2. HMRC have contacted me to audit my customs declarations.  What do I do?
  3. What is a C88?
  4. We do not have anyone who deals with customs so where do I start?
  5. What information do I need to retain for my imports?

If you have thought about any of the above, you will need our assistance to comply with the complex Customs regulations.  Our Indirect Tax Team are available to assist UK businesses to navigate the processes and produce the documents required.

Read on below for just one example on how Customs Compliance can impact businesses:

Business Case Study:

A UK business had been subject to a HMRC Customs Audit where tariff classification was questioned on specific products resulting in a substantial customs debt.  This decision on the commodity codes affected the long term viability of the product but the business did not have the knowledge to question the decisions made by HMRC. 

Our Customs Team were engaged to establish whether the commodity codes provided by the HMRC Customs Officer were correct.  Our team liaised with the business to obtain the specifications and samples for the affected products.  This was analysed against the customs tariff, legislation and also prior tribunal case law, which identified a potential precedent that affected the accuracy of the HMRC decision. 

As a result of the written submission to  HMRC’s Review team, the original decision was withdrawn and the customs debt cancelled, much to the relief of the business.

The above scenario could have been avoided if the correct procedures had been implemented within the business.  We appreciate that this is not always an option so this is where MHA can assist the business in maintaining its customs compliance.

Under UK legislation, HMRC are empowered to inspect UK importers and exporters records to confirm that the customs declarations are accurate.

If a UK business is selected by HMRC, they will receive contact confirming the start of the audit. Generally, SME’s do not have the resources or expertise to manage the customs processes of the business so any HMRC audit is likely to identify errors and subsequent duty assessments and even penalties.

MHA can support businesses, to ensure that they can maintain their customs compliance, by providing our Customs Compliance Audit service.  This involves a review of your current customs processes and, if necessary, upskilling and establishing new procedures to meet HMRC’s requirements.

Depending on the level of customs activity, our audits of import and export declarations will also be completed at agreed periods (e.g. monthly, quarterly, annually).  Using risk-based audit techniques, we will review the supporting documentation against customs declarations to assess the level of compliance.

We will also arrange for any adjustments to the declarations to be submitted to HMRC.  This will provide HMRC with reassurance that the business is acting correctly, thus reducing any potential increase in audits from other areas of HMRC.

Got a question? Get in touch for key advice

If you would like our team to contact you to discuss the options available for conducting an initial compliance audit, please get in touch

Look out for more articles in this series of topics on international trade from our specialist Indirect Tax Team.

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