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.