Businesses need to be aware that customs authorities may levy additional charges, and should prepare for those.
Businesses need to be aware that customs authorities may levy additional charges, over and above those that the business has calculated on the import declaration. Businesses need to be well prepared and have robust controls in place. Failure to do so may result in incremental charges and border delays.
Customs authorities can challenge the volume and value, category or origin of goods being imported. Any one of these can result in additional duties or VAT being payable. See our individual pages on each topic for more.
- Value your goods for customs
- Classify your goods using commodity codes
- Determine where your goods "originate"
In addition, penalties can also be levied. Reasons for penalties include:
- infringements of customs regulations;
- failure to comply with any customs-related approval, authorisation, registration or licence;
- failure to comply with a customs procedure;
- failure to produce information;
- failure to keep records;
- inaccurate returns or documents; or
- unauthorised removal of goods from customs supervision.
There are few acceptable defences to these charges, so businesses need to be well prepared for compliance.
In addition to any unpaid duty, VAT and any penalties that may apply, customs authorities can also apply other charges. These include the following.
Customs authorities will select shipments for inspection. In some cases, more extensive examination and testing will be carried out. Customs authorities may seek to recover the cost of these inspections from the importer.
Where HMRC has concerns that goods may have been misdeclared on import, they have the power to inspect goods and supporting documentation at an importer’s premises, this includes the right to require any container to be opened and unpacked.
If goods are significantly delayed at port, due to lack of customs clearance or other reasons, additional costs may need to be paid. Shipping companies may charge "demurrage" for containers held at port. They typically allow containers to be held for a short period (perhaps five or seven days) for free and will charge beyond this point. The port may in addition charge its own "port rent".
Where goods are unpacked by customs authorities for inspection, this will be into a bonded section of a warehouse called an "External Temporary Storage Facility" (ETSF). While goods would usually pass through this stage rapidly and without additional cost, if they are unduly delayed warehousing costs will be levied. These may be significantly more than the equivalent cost paid for warehousing outside of an ETSF.
Why do goods get delayed?
There are several reasons why goods may get held up at port. Businesses that only trade between the UK-EU may not currently have to manage any of these processes and therefore may have a higher risk that they get things wrong, at least initially. For importers to the UK, the temporary "simplified procedures" could help, but businesses will need to be eligible to use them.
Common issues include:
- insufficient cash to pay customs and clear the goods;
- importer not being ready for the arrival of the shipment;
- customs documents not received in time;
- errors in documents or incorrect documents supplied;
- shipments held up for inspection;
- not having an EORI number.