Why are HMRC Authorisations Important for Business?

The 2nd September is undoubtedly a date for your diary – from tomorrow there are 120 days until – 31 December 2020 – the end of the transitional period for the UK leaving the EU. That figure is important, because it’s the same number of days that it takes for HMRC to process applications for a Customs Comprehensive Guarantee (CCG), something which must be in place before accessing other duty suspension authorisations. This guarantee covers the potential duty liability that a business may have to suspend at the time of importation.

Why is it worth securing these approvals? Put simply, having access to an HMRC Authorisation can secure a more advantageous market position for your business. Given the imminent legislative changes for businesses which import and / or export, having these in place could help your business to avoid potential delays and additional charges as a result of legislative changes.

Holding one of these approvals demonstrates the high standards to which your business adheres in the global market. This is crucial for securing the confidence of your business partners, something that is even more important during these turbulent times.

What’s more, some HMRC Authorisations allow for the suspension of import duties, thus assisting businesses to better manage their cash flow. While certain special procedures can be applied for as a one-off, or for regular use, depending on individual business needs.

These duty suspension Authorisations include:

Authorised Consignee – An Authorised Consignee approval allows for businesses to undertake the customs process away from the border, at an Approved Premises.  This is an efficient way of moving non-Union goods across several customs territories into the UK, while avoiding border delays.

Customs Warehouse – A Customs Warehouse approval allows for businesses to import goods into a customs warehouse with the potential duties suspended.  The goods can be stored for an indefinite period of time within the Customs Warehouse.  Duties only become payable when the goods are released into free circulation.

Inward Processing – An Inward Processing approval allows for businesses to temporarily import goods for the purpose of processing, inclusive of repair, without the payment of duties/ VAT at the point of import.

Outward Processing – An Outward Processing approval allows for the temporary export of goods for processing or repair. Upon re-importation to the UK, you are then able to claim full or partial duty relief.

Authorised Use – Formally recognised as End Use, an Authorised Use approval allows businesses to import certain goods at a reduced or zero rate of duty, provided they are put to a prescribed end use within the approved time frame.

Underpinning all of the above, a business which holds AEO (Authorised Economic Operator) status is internationally recognised for their business compliance standards, in a fashion similar to a ‘kite mark’.

Should you wish to discuss any of the above HMRC Authorisations to ascertain their suitability for your business, please get in touch – we are more than happy to help.

The New UK Global Tariff and Your Business

Brexit may have been pushed out of the headlines, but that doesn’t mean there’s been any let-up in preparations for our exit from the EU.

One of those measures is HMRC’s recently published new UK Global Tariff (UKGT) regime. This Tariff will replace the EU’s Common External Tariff (EU CET) at the end of the Transition Period on 1st January 2021.

The UKGT has been tailored to the needs of the UK economy, making it easier and cheaper for businesses here to import goods from overseas. You will not only benefit from a lower tax regime, but also from reduced red tape and barriers to trade.

The UK Global Tariff will apply for any goods being imported into the UK from any country, with the exception of those that have concluded Free Trade Agreements with the UK already, provided that the products meet the relevant rules of origin and qualify for preferential duty rates.

Certain products will be completely tariff-free under the new regime, whilst others will be subject to a reduced tariff.

So what does this mean for you? What do you need to do next?

We’re almost halfway through the year, and the 1st January 2021 will be here before we know it. There are a number of proactive steps you can take to ensure your business is ready to capitalise on the opportunities presented by the new Tariff:

• Review your current commodity codes
• Prepare for a system update where your ERP system holds classification information
• Check your commodity codes still exist in the new Tariff
• Check which codes are most applicable to your products
• Review the duty rate for the goods
• Consider contractual obligations in relation to price
• Do you need to consider a BTI if your products have gone from a positive rate of duty to a potential nil rate of duty?
• Consider if your CCG is accurately positioned to reflect these changes
• Review any HMRC Authorisations held whereby the classification forms part of the approval (such as Customs Warehouse).

If you’d like to discuss these changes, and how they may affect your business, we’d be happy to have a chat. You can get in touch with us at: info@bethancc.com.

Photos by: Grant Anderson – www.grantanderson.me / @grantandersondotme

Authorised Consignor / Consignee status – the smart way to expedite cross-border transportation

With so many uncertainties still surrounding post-Brexit trading regulations, it’s good to know there are measures available to UK businesses that will streamline the cross-border transport of goods beyond 31st December this year.

One thing we do know is that regardless of the eventual outcome of the EU exit negotiations, the UK will remain a member of the Common Transit Convention (CTC) – a customs procedure that’s available to businesses, enabling them to move goods across borders or territories without paying customs import duties until they arrive at their final destination.

Not only does this deliver cash-flow benefits, it also helps transport goods across the border without delay at the point of importation into the UK, and when exporting from the UK.

Businesses which transport cargo across several borders can expedite this process even further by applying for certain customs simplifications, including authorised consignee and/or consignor status. If you’re regularly moving goods using Transit, you can apply for authorised consignor or consignee status. This will allow you to start (authorised consignor) or end (authorised consignee) transit at your own premises rather than at a customs office, saving a great deal of time and inevitably costs.

If approved, this status effectively puts the business in the place of the customs authorities as either the Office of Destination or Departure. You can apply for both authorised consignor and consignee status. You should bear in mind that in order to be eligible to apply for either or both of these authorisations, you will need to demonstrate a good standard of business practice.

With either or both of these authorisations in place, you’ll be in a position to take advantage of quicker and more efficient import and export transactions, regardless of how the cross-border trading landscape looks after 31st December this year.

If you feel your business could benefit from these authorisations, let’s have a chat. Whether it’s taking a look at your systems to ensure they achieve the required standards, or supporting you through the application process, our team of specialist customs consultants is on hand to help.

Photos by: Grant Anderson – www.grantanderson.me / @grantandersondotme

Customs specialist welcomes HMRC measures to support firms with compliance amid COVID19 disruption

A leading North-east customs specialist has welcomed measures from HMRC to support businesses during this period of economic turbulence caused by the global COVID-19 pandemic, but warns that firms must maintain responsibility for meeting their compliance obligations.

Nicola Alexander, Managing Director of Bethan Customs Consultancy in Oldmeldrum, said that while HMRC are taking into account the financial impact of the pandemic, businesses must be proactive in contacting their supervising office as soon as they’re aware of any potential problems in making payments.

Support measures include the potential to delay making payment of deferred customs duties and import VAT if COVID-19 has impacted on a business’ finances and cash flow. In addition, registered importers who pay cash or an equivalent can contact HMRC to request an extension to their payment deadline.

Ms Alexander said: “While we understand that the focus for business-owners right now absolutely needs to be on looking after the health and well-being of staff and working hard to stay afloat, it is nonetheless vital that they keep on top of compliance obligations. HMRC are offering support to businesses during these turbulent times, but will still actively engage in the verification of customs activities, just by electronic means instead of visiting in person.

“Businesses need to continue complying with their customs authorisations, inclusive of the submission of Bill of Discharge reports. The terms and conditions of individual HMRC authorisations are laid out within the authorisation itself. However, if a company is no longer able to comply with a condition of the authorisation because of COVID-19, they should seek permission from their supervising office in HMRC or Border Force to temporarily vary the conditions of their authorisation.”

Ms Alexander also highlighted an important update regarding the dual running of the CHIEF and Customs Declaration Service (CDS) payment declaration systems: “HMRC have decided to extend the migration timelines and keep CHIEF open beyond December 2020. However, there are various steps that businesses must take to prepare for this (if they haven’t done so already), including ensuring that they can provide the additional mandatory data set of elements which may not be required in CHIEF.”

Finally, businesses should be mindful, she points out, that Brexit will still be going ahead regardless of the current situation, with the UK set to formally leave the EU on 31st December this year as things currently stand. “Brexit has been enshrined in law, and negotiations will still be taking place, albeit remotely. With this in mind, now is the time to be applying for authorisations such as Authorised Economic Operator, as there may not be time to complete these prior to our exit date otherwise.”

Photos by: Grant Anderson – www.grantanderson.me / @grantandersondotme

Changes to Customs Authorisations

If you are no longer able to comply with a condition of your authorisation because of the coronavirus (COVID-19), you must get permission from your supervising office in HMRC or Border Force to temporarily vary the conditions of your authorisation. Link below details which conditions may be considered for variation:



North East Seafood sector must process impact of Brexit

Photos by: Grant Anderson – www.grantanderson.me / @grantandersondotme

The fact that the UK exports most of the seafood we catch, while we import most of the fish that we eat is a paradox that is not lost on the fish-processing sector in the North-east.

With intra-EU trade – fish caught and processed within Europe – making up the majority of EU exports (77%), it’s little wonder that there is a palpable sense of uncertainty in an industry which employs around 7000 people (Seafish UK, Seafood Processing Sector Labour Report 2018) across the North of Scotland.

While the next year will see a period of transition, from 1st January 2021, the fish processing sector will need to adopt and become conversant with a raft of new legislation, if they are to continue exporting to the EU.

However, as with most situations, doing your homework and being prepared will go a long way towards alleviating potential disruption to your business and/or supply chain.

Currently, UK fish processors can export their produce to the EU with minimal paperwork – a straightforward invoice is all that’s required. However, from 1st January 2021, the UK will be classed as a third country and will need to adhere to the rules applicable to non-EU states – incurring potential delays and additional costs in the process.

The first step should be to ensure you have all the relevant approvals in place in the UK and the EU. Have you registered for Fish Export Approval? Are you aware of UK Catch Certificate criteria? Are you registered to buy and sell fish by the UK competent authority?

Catch certificates must outline detailed information, such as: the value of the fish to be exported, the vessel which landed it, as well as the weight and classification of each species of fish in the consignment. Similarly, before an Export Health Certificate is awarded, the produce must be examined by a vet.

As well as making sure the paperwork boxes are ticked, businesses should also investigate whether they can still use their customary route and landing port. Post our official exit from the EU we will only be able to land at specific ports in the EU, which are authorised to allow border inspection to take place.

This will be a crucial consideration for those exporting perishable goods such as processed seafood. The need for more paperwork, combined with a greater volume of ships landing at fewer ports, could potentially lead to a perfect storm of delays in consignments clearing customs. Outstaying our welcome in these ports could also incur penalty charges.

When it comes to contracts, the devil is in the detail. Fish processors exporting to the EU should consider which commercial terms they have signed up to with their customers. Who is liable for any additional payments due to delays or more paperwork? What are the consequences of a worst-case scenario where a consignment is deemed unfit for import to the EU? It is a prudent business that carefully checks the terms of their contracts with their EU counterparts.

The waters may be choppy at the moment, but be proactive in making sure your procedures are water-tight, and there should be no reason why your business can’t continue to cast its net across the EU.

Trade Assurance Visits – What You Need to Know

Photos by: Grant Anderson – www.grantanderson.me / @grantandersondotme

When HMRC call to arrange a visit to your business, it can be a daunting prospect. However, as with most things, once you have done your homework, and de-mystified the process, you are more than half-way there.
So why do HMRC want to pay your business a visit? To check that company records and systems concerned with the import and/or export of goods are sufficient to provide the information required by EU regulations. They will also want to verify that the value of goods declared for import duty and VAT purposes is in line with EU regulations, and that the amounts of import duty and VAT declared are correct.
An initial call outlining the reasons for the visit will be followed up with written confirmation, containing: an opening letter with the name of the visiting officer (and whether they will be accompanied), the proposed date, time and location of the visit. HMRC will also provide a schedule of information and documents needed to carry out the relevant checks, as well as a list of entries to be tested for verification. These entries will be targeted and, depending on the business activities, will include import and exports. Finally, a compliance check information document will also be included.
Companies will be expected to reply in writing accepting the visit, although you are entitled to request a rearranged date, time or location of visit, provided you have a sound reason.
To prepare for the assurance visit, you will be expected to have all relevant documentation that relates to your customs activities readily available. This will include copies of incorporation documents, authorisations and any licences the business may hold in relation to their customs activities.
From the entries selected by HMRC, the visiting officer will want to see all documents for the order selected, from placement of order, to receiving the goods into the company warehouse and records, to the goods being stored and subsequently removed from the warehouse.
The actual visit will, in essence, be split into three different sections: a tour of the premises, paying particular attention to the storage of products; a review of the documentation and testing of these documents for the entries selected, and the completion of a detailed questionnaire that will check and confirm the operation, performance and suitability of the business.
At the conclusion of the visit, a close-out meeting will be held with all relevant stakeholders in the customs activities of the business. During this meeting, the visiting officer will advise if they require any documentation to be sent to them to allow them to complete their report.
Once the visiting officer has completed their report, they will send you a written copy. This report will include any penalties or demands for payment of duty that are applicable. There will be a right-to-be-heard period, should you wish to appeal, and also details of how to make payments, should you wish to accept the charges unchallenged.
My colleagues and I at Bethan work with clients at every stage of the process. From the outset, we provide advice and support, right from how to reply to the HMRC officers’ request, to the preparation and formulation of documentation for the audit, and analysis of gaps prior to the audit. We support clients with filling these gaps, and advising/of any possible penalties that may arise. We can also take the lead or assist during the audit itself. Following the audit, we can prepare a report, helping to answer any queries that arise, and to challenge or respond to any HMRC penalties, right through to close-out and lessons learned for the future.

Stuart Wood
Bethan Customs Consultancy

Flourishing Aberdeenshire customs consultancy has clear vision for 2020

Photos by: Grant Anderson – www.grantanderson.me / @grantandersondotme
2019 – the year that was dominated by the ‘B’ word. But for one Aberdeenshire firm sharing the same initial letter, 2019 was less dogged by controversy, and more gilded by success. Oldmeldrum based Bethan Customs Consultancy celebrated its 4th birthday with an expanding client base, boosted turnover, and an-ever growing team.

With experience across all areas of customs, logistics and supply chain, the resolutely independent firm supports businesses in international trade and compliance, helping clients to navigate the complexities of HMRC Authorisations and customs regimes. Bethan’s client base spans a wide range of sectors, from oil and gas to food and drink and retail.

2019 has been a pivotal year on a number of fronts for the firm. Bethan’s turnover has tripled between the end of year one and year four, while their client list has multiplied five-fold during the same period. Their geographical reach has also grown, with several clients based in the south of England, and plans in the pipeline to push further afield.

Over the last 12 months, 19 new clients have come on board, following a similar number the previous year. The Bethan team have secured 17 Authorisation approvals for their clients, and provided support on trade compliance and HMRC audits for a further five clients.

The training arm of the business continues to go from strength to strength. Bethan offers bespoke training packages and mentoring support for businesses, with the subject matter being derived from in-depth market research. Over the past year the team has run 12 fully subscribed training courses, via a combination of bespoke in-house courses, as well as those run at Bethan’s HQ covering more general topics such as the Customs impact of leaving the EU to supply chain security and compliance awareness.

In order to meet demand for the firm’s independent, bespoke service offerings, and expand capacity for dedicated in-house and remote customs consultancy, Founder and managing director, Nicola Alexander, has grown her team with a number of key appointments. The most recent addition is well-known former HMRC Higher Officer, George Laing, with plans well underway for further recruitment in 2020.

In line with this expansion, Nicola has also re-structured the team. Customs Consultant, Elaine Lownds, has been promoted to the newly created position of Customs Manager, opening up further opportunities for Bethan to expand their suite of customs related service offerings in both scale and geography.

Reflecting on the past year, Nicola said, “2019 has been a phenomenal year for the business. Our success is due in no small measure to the amazing Bethan team, each of whom brings a wealth of experience, and shares my solution-driven ethos. The number of Authorisations and audits which we have helped our clients to successfully secure is testament to their hard work, knowledge and skills. I am very much looking forward to continuing our journey together into 2020.

“Plans are already well underway to expand our team further – we are currently recruiting for another customs consultant. We have grown and developed a great deal over the last year, and so I am keen to embark on a period of consolidation, and optimisation of our current processes. Longer term we have lots of exciting plans and aspirations to expand our geographical reach and embark on more specialised project work, while continuing to support our clients.”

Exciting Times Ahead

Bethan Customs Consultancy has promoted specialist Customs Consultant, Elaine Lownds, to the newly created position of Customs Manager. The role will see Elaine lead Bethan’s team of Customs Consultants in line with the firm’s business practice and ethos.

Elaine’s promotion and the re-structuring of the team opens up a myriad of opportunities for Bethan to expand their suite of customs related service offerings for clients, both in scale and geography.

The firm’s director and founder, Nicola Alexander, said: “Elaine has brought so much value to the company since joining in March last year, and this well-deserved promotion reflects her hard work, loyalty and commitment. Not only is she a wealth of knowledge and experience in all matters customs, but she is also well-liked and respected by colleagues and clients alike. I look forward to working with Elaine in her new role, and am confident she will do a fantastic job.”

Elaine added: “I’m thrilled to step into this new position at what is an exciting time for Bethan, and an interesting time for the UK as a whole. Our impending exit from the Union Customs Code (UCC) and the European Union (EU) will have major implications for businesses which import and export, and I look forward to working with our clients and continuing to support them during this period of unprecedented change.”

Photos by: Grant Anderson – www.grantanderson.me / @grantandersondotme