Points to ponder as we reach the end of the deferment period

Elaine Lownds

Since the 1st January 2021, HMRC have allowed UK businesses to defer making import declarations, in a bid to help them adapt to our new trading relationship with the EU and the inherent additional requirements.

The 1st July brings this period of transition to an end, and with it the need to make decisions about how to proceed.

To defer or not to defer? That is the question.

If your business imports controlled goods, i.e. those which are subject to a regulatory control such as alcohol and tobacco products, you will not be able to use the deferred system.

However, if this doesn’t apply to you, then the first point is to consider is whether there is a commercial benefit– does the deferring of entries work for your business? Does your company import perishable goods? Do you utilise just-in-time ordering? Do you work in the manufacturing sector? Do you import a high volume of goods?

Deferring import declarations can be extremely helpful in these cases, where goods need to be imported and moved to the business premises quickly to ensure business continuity.

What to do next if the answer is yes

If you have been deferring declarations, and you do wish to continue doing so after 1st July, your business must have an approval in place with HMRC. Given that the timescale for the approval process is 120 days, your application should already be lodged with HMRC so as to be effective by this date.

When considering applications for approvals, HMRC look for reassurance that your internal business systems for controlling imports are both robust and reliable. They will carry out due diligence, so it’s important for you to demonstrate that you have clear customs processes and controls in place, particularly in relation to how you file and store documentation.

Consider the potential impact on duty / VAT

The nature of deferment is that at some point further down the line these declarations will require to be made, and any applicable duties will require to be paid. This could potentially entail not only a significant volume of labour, but also large sums of payment due. So it’s important to consider the implications carefully. Does this work for your cash flow? How will it impact on your VAT returns?

Keep the channels of communication open

A key partner throughout this process will be your freight agent or the company submitting the declarations to HMRC on your behalf. A good working relationship with your customs / freight agent is essential.

Set a system in place with them. Check whether they will have the capacity to deal with the volume of entries at the end of the deferred entry period. Open and honest communication from the outset will ensure that they can meet the expectations detailed in the customs approval.

NB This information is correct at the time of going to print. Please visit: https://www.gov.uk to ensure you are responding to the most recent regulatory advice.

Elaine Lownds is a Customs Manager with Bethan Customs Consultancy. Based in Oldmeldrum, the independent firm provides customs and supply chain support, as well as online training, to businesses across the UK. The Bethan team work closely with their clients, tailoring support and helping them to navigate their way through customs legislation, ensuring compliance at every step.

Brexit Top Tips

Lights! Camera! Action!

Our MD Nicola Alexander recently caught up with Innes Cameron, Director of Clarksons Port Services over a Zoom call to chat about all things #Brexit.

We know that this year has been a challenging one for businesses who import and export.

We wanted to do our bit to help, and here it is! The first in our series of videos featuring Nicola and Innes offering their top tips on navigating the new customs landscape.

Keep your eyes peeled for the next instalment…

A day in the life of…. Bethan Compliance Executive, Stuart Wood

Stuart Wood, Compliance Executive

Today I’m working as a dedicated resource for one of our clients. In ‘normal’ times I’d be in-situ at their business premises, but due to COVID restrictions, we’re providing remote support for the time being.My working day starts at 8.30am, so first things first, while the laptop is warming up I make that all-important coffee. 😊

My first port of call is always the Bethan Project Management system, where I have oversight of our client’s requirements for the day ahead, as well as the liaison needed with the rest of the Bethan team to meet these. This client is in the process of applying for Authorised Economic Operator (Customs) status (AEOC) so providing support for this application is my priority for today.

This is swiftly followed by the highlight of my day 😉 – the morning Teams call with my Bethan colleagues to discuss the day ahead and our planned workloads.

Having received a copy of the Import MSS Reports directly from HMRC today on behalf of our client, I carry out a reconciliation between their Import Register and the MSS Reports to ensure they match and that Compliance Checks have been carried out against each entry.

We’re always on hand to help, so when our client calls regarding an import that is stuck at the border, I concentrate on helping them resolve this business-critical issue. We talk through CHIEF error codes, discuss the root cause of the problem, and work together to review and amend their Standard Operating Procedure requirements so as to streamline any future imports.

Before I know it, it’s lunchtime. 😊 After my ham sandwich – the food of kings! – I generally make time for a stroll in the fresh air, which sets me up for the afternoon ahead.

After lunch, I have a scheduled Teams call with our client to review the AEO questions sent by HMRC. We work together to prepare their responses, as well as to review specific supply chain processes where there may be a customs impact to ensure compliance in line with the latest legislation.

I also liaise with the Finance Director and Managing Director to review the core business model of their import and export supply chain transactions, giving consideration to whether a Special Procedure approval would be useful for them.

At the end of another busy day I log back onto the Bethan Project Management system – keeping this updated with completed tasks and those planned for my next dedicated client day maintains business continuity and transparency within Bethan.

At 4.30pm I close my laptop, and set off for my evening job – dad’s taxi services! 😊

Customs clearance and couriers

Nicola Alexander

Since 01.01.21 businesses have been required to import and export products between the EU and UK. It goes without saying that the work involved in the necessary customs clearances for this have significantly increased – issuing clearance instructions, obtaining customs declarations and carrying out customs compliance checks on this documentation all need to be completed on each consignment.

The key to completing these in an accurate and timely manner is twofold: ensure that efficient processes are in place, and capture any irregularities at source. This will go a long way towards supporting already stretched teams with their increased workload. You can read our guide on getting the basics right at: https://bethancustomsconsultancy.com/customs-consultancy-advise-back-to-basics-approach-to-tackle-brexit-concerns/

That said, we at Bethan have been made aware of a further potential complication for many companies in relation to the process surrounding Fast Parcel Operators. A number of pressing concerns seem to come up time and again, and we felt it would be helpful to highlight some of these common issues and provide some top tips to help ensure compliance within your organisation.

These include:

1. Goods being delivered without the request for clearance instructions;
2. Customs entries being completed, but not in line with clearance instructions;
3. Difficulty obtaining copies of the customs entries;
4. Additional fees incurred by use of Fast Parcel Operators deferment accounts to pay any duties and VAT to HMRC, over and above standard transportation costs.

1. As we’ve said previously, goods just turning up at the door should not and cannot be considered as having reached the end of their journey. They still must be customs cleared, along with confirmation of that clearance. Whether they have been cleared without your knowledge, or fall under the deferred entries category, it is your responsibility to ensure that you are aware of the process that has been followed to ensure accurate reporting to HMRC.

2. As part of your compliance checks on entries, you should take the appropriate action with HMRC if you identify any irregularities.

3. Our advice would be to subscribe to the HMRC MSS Reports to ensure that your records match exactly those of HMRC. These reports will allow you to establish which Fast Parcel Operators have entered goods against your EORI, and will detail the declarant reference to allow for the documents to be requested.

4. Communications is key. Liaising with your Fast Parcel Operator key account manager to establish the key notes that are held against your company will help to ensure that your instructions are followed. For example, you’ll be able to request that clearance instructions are obtained prior to clearing the goods. Working together in this way will allow for the request, and provision of your company’s written clearance instructions, inclusive of your deferment account or the customs regime that you wish the goods to be cleared under.  No one likes unexpected costs, and by establishing these ground rules you can easily avoid them.

Photo: Jonathan Addie Photography – https://www.jonathanaddie.com/