Why your business should audit its imports and exports

As Bethan Customs Consultancy knows, any business that imports or exports goods is open to review by HMRC. Customs authorities have the right to examine declarations, documentation and processes to confirm that goods have been declared correctly and that the right amount of duty has been paid.

With this in mind, it is worth asking a simple question: If HMRC reviewed your customs declarations tomorrow, would you be confident everything is correct?

An independent external audit. 

An external audit carried out by Bethan provides an impartial review of your customs processes, helping you understand where things are working well and where improvements may be needed before issues become more serious.

“Before issues become more serious” is the key phrase here as there are plenty of hidden risks in customs declarations as even when goods are moving across borders without disruption, this does not always mean the underlying customs data is correct. Errors can remain unnoticed for long periods of time.

Common areas where issues can arise:

• tariff classification of goods
• customs valuation
• origin declarations and supporting evidence

These are technical areas of customs compliance and mistakes are often not immediately visible in day-to-day operations. In many cases, they are only identified when a detailed review of declarations and supporting documentation takes place.

Understanding the potential risk exposure.

When HMRC carry out a customs audit and identify errors, they will review historic activity. In the first instance, customs authorities will typically go back three years when assessing declarations and duty payments. Do you have all your import and export records going back to March 2023?

If discrepancies are identified, businesses will likely be required to pay any underpaid duty, and in some cases penalties may also apply. If HMRC believes the duty loss resulted from deliberate behaviour, they can use extended recovery periods of up to 20 years.

For businesses trading at volume, even small classification or valuation differences can accumulate into significant financial exposure over time. How would three years’ worth of underpaid duty affect your profit & loss?

An independent audit helps identify potential risks early so that businesses can address them proactively.

Why an independent audit matters.

Many businesses carry out internal checks on their customs activity, which is a sensible step. 

However, internal reviews can sometimes overlook issues simply because teams are too close to the processes involved - what’s the point in checking your own homework?  An independent audit brings a fresh perspective and having an external customs specialist review your declarations and supporting documentation can highlight risks, inconsistencies or opportunities that may not be obvious internally.

How Bethan approaches clients audits of import and exports.

At Bethan, our audits are designed to provide an independent perspective on your import and export processes. We review how your declarations are being completed, assess key compliance areas and identify where there may be potential risks or opportunities for improvement.

Lengthy reports can sometimes make it difficult to quickly understand the key messages and, to avoid this, the Bethan audit findings are delivered in two ways:

• a detailed written report outlining the areas reviewed, the findings identified and practical recommendations for improvement
• a short video summary highlighting the key areas of risk and the priority areas your business should focus on

This allows senior stakeholders to quickly understand the outcome of the audit and the actions that may be required. Our aim is to make audit findings clear, practical and accessible so that businesses can move quickly from identifying risks to addressing them.

Where to start to review your customs processes?

If your business imports or exports goods and hasn’t reviewed its customs declarations recently, an independent audit can provide clarity, reassurance and a clear plan of action.

If you would like to understand the risks and opportunities within your customs data, get in touch with Bethan to discuss how an independent customs audit could support your business.