Since 1 January 2021, all goods imported into the UK from the EU require an import declaration. As a transitional measure, HMRC allowed businesses to make deferred Customs declarations up to 175 days (nearly 6 months) after the date of import and pay any relevant duty at that stage. For example, for goods imported on 1 March, a deferred declaration and any duty payment must be made by 23 August. However, to qualify for these rules, either the business or their freight forwarder must be authorised by HMRC to use simplified customs declarations processes and have an account to defer duty payments – registering and setting this up can take up to four months.
While these transitional rules apply for good movements up to 31 December 2021, it is vital to remember that this is only a deferral option – Customs declarations (and any duty payments) must be made at some point. With the current lack of resource amongst freight forwarders and customs agents, we are starting to see increasing incidences of deferred declarations NOT being submitted to HMRC.
Who is responsible for declarations?
Many businesses use a customs agent or freight forwarder to make Customs declarations. This avoids the business needing to be approved to, and complete, customs declarations in house. Please note however that the responsibility for ensuring that accurate and timely customs declarations have been submitted always remains with the importer, even if the process itself is being carried out by a freight forwarder or customs agent. Therefore, if you have just allowed import arrangements to roll along this year as they have in the past you may be storing up substantial financial problems.
If you do not have robust controls and checks over your freight forwarder who is making Customs declarations, how do you know whether any have been made? Ultimately, if no declarations have been made, it is not your freight forwarder that is responsible in the eyes of HMRC, it is you as the importer.
Penalties
HMRC has recently announced that is taking a firm line where goods have been imported from the EU post 1 January 2021 and no Customs declarations have been made. While many duties on goods imported from the EU are now set at zero, even if no duty is payable, HMRC has stated that it will charge penalties for failure to make declarations. Penalties can range from £250 to £2,500 for each failure to make a declaration – some regular importers could be building up large bills if they have not taken Customs declarations seriously.
ACT NOW if a Customs declaration has not been made
You are already facing a penalty if a Customs declaration has been missed but HMRC may take a more lenient approach if you act quickly to put things right. You have until 7 August 2021 to make a full import declaration (and pay any duty due) for any EU imports missed between 1 January and 6 July 2021. For import declarations missed after 7 July a one month deadline applies.
If you don’t meet this deadline and you or your agent/freight forwarder are authorised to make simplified Customs declarations, you can declare the imported goods by making a ‘non-statutory supplementary import declaration’ and pay any duty due. However, the imports you report this way are treated as ‘non-compliant’ so you cannot apply postponed VAT accounting to account for import VAT due on them. Also, there are possible wider consequences as non-compliance can render your business ineligible for UK duty reliefs and customs simplifications for up to three years after the contravention took place.
For help and advice on putting right your Customs Duty reporting please contact our Brexit taskforce team.