New year brings new VAT & Customs rules Shipleys Tax Advisors

ON THE FACE of it, the UK left the EU on 31 December 2020. From 1 January 2022 there were additional customs rules to be aware of for businesses trading with the bloc, our former partners in the EU.

In today’s Shipleys Tax brief we look at what these rules are and how Shipleys Tax can help.

What is Customs Duty?

Customs duty is payable on goods imported into the UK. The rate of customs duty payable is determined by the tariff classification of those goods.

Customs duty cannot be recovered, therefore where payable, it is a cost to businesses resulting in reduced profit margins.

Following Brexit, all imports to mainland Britain (England, Scotland and Wales) from overseas may be subject to import duties. Certain processes, mainly regarding paperwork, were not initially required in order to allow affected businesses time to get used to the new relationship with their customers. These have now taken effect:

Customs duty cannot be recovered, therefore where payable, it is a cost to businesses resulting in reduced profit margins.

  • full customs import declarations are needed for all goods at the time a business or the courier/freight forwarder brings them into Great Britain
  • customs controls at all ports and other border locations
  • the possible need for a suppliers’ declaration proving the origin of your goods (either UK or EU) if using the zero tariffs agreed in the UK’s trade deal with the EU
  • commodity codes, which are used to classify goods for customs declarations, are changing.

As such, it is now pivotal for importers to proactively consider their customs duty position.  

How can Shipleys Tax help? Can your business benefit from customs duty planning to make tax savings?

Shipleys Tax can provide guidance to importers on many aspects which drive the duty rates payable on imports, using our experience to identify opportunities to optimise the duty position as follows:

  • Tariff Classification – The commodity code used for imports drives the import duty payable on those goods to HMRC. Establishing which code to use can be a complex task and can result in significant variations of duty paid to HMRC. Using our expertise, we can identify saving opportunities by using appropriate tariff codes and where necessary, obtain rulings from HMRC to confirm the treatment.
  • Preference – Preferential trade agreements (i.e. the EU trade deal with the UK post Brexit) exist between the UK and its key trading partners. What this means is that where goods are imported from trade partners (i.e. the EU), preferential duty rates can be claimed, resulting in savings. We can establish where and how preference can be claimed to make tax savings for your business.
  • Valuation – We can advise on the appropriate customs valuation method used for goods imported into the UK.  
  • Customs Special Procedures – Customs special procedures allow businesses to suspend, relieve, reduce or defer customs duty payable on imports. We will establish whether these special procedures offer customs duty or cash flow savings for your business and use our experience to assist in their implementation.

Shipleys Tax can provide guidance to importers on many aspects which drive the duty rates payable on imports, using our experience to identify opportunities to optimise the duty position.

HMRC claims

Our reviews often result in opportunities for three-year backdated claims for overpaid customs duty. We will manage the claim process for your business, liaising with HMRC to obtain the duty refunds your business is due!

Get in touch

With wholesale changes impacting importers following the UK’s departure from the EU, now is the ideal time to ensure you are seeking advice from the experts, to ensure you pay no more customs duty than is due, whilst remaining compliant with HMRC rules.

At Shipleys Tax we have experienced indirect tax advisers and are well placed to ensure that your business is operating as effectively as possible, while remaining compliant with the duty regulations in this area.

If you are affected by any of the issues above and would like more information, please call 0114 272 4984 or email info@shipleystax.com.

Please note that Shipleys Tax do not give free advice by email or telephone.