IMPORT & CUSTOMS CONTROLS
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What are customs controls?
Chargeable goods are under HMRC control from the time of importation. Customs control allows HMRC to determine whether customs law has been complied with in relation to the movement of goods between the UK and other countries. This would include the ability to inspect goods and means of transport, verify declaration data and related documents and make inquiries.
Goods that are declared for the free-circulation procedure and are released to that procedure (released for free circulation), cease to be under the control of a customs officer (ceasing to be chargeable goods and becoming domestic goods). Goods are released to free circulation on payment of the import duty or, if an approved guarantee or other approved payment arrangement is in place (Duty deferment), when the declaration is accepted.
If goods are declared for a special customs procedure, they remain under the control of a customs officer. The goods are released to the special customs procedure when HMRC accepts the declaration (or, if later, the time when the declarant is authorised to use the procedure), whereupon the goods become subject to the special customs procedure rules until the procedure is discharged. A special customs procedure is discharged if the goods are declared for another customs procedure and HMRC accepts the declaration.
What are domestic goods?
Generally, domestic goods are:
Goods that are wholly obtained in the UK (grown, produced or manufactured only in the UK).
Goods that have been imported into the UK and were declared for, and discharged from, the free-circulation procedure or an authorised use procedure.
If goods are exported from the UK, they cease to be domestic goods. Goods that are in the UK are presumed to be domestic goods unless the contrary is shown. However, HMRC has significant powers in relation to defining what are domestic goods, including power to specify cases in which goods will (or will not) be regarded as domestic goods and reversing the presumption that goods are domestic goods.
What is a customs declaration?
Chargeable goods presented to customs on import must be declared for a customs procedure by making a customs declaration.
Goods may be declared for the following customs procedures:
The free-circulation procedure. If the declaration is accepted, this triggers any import duty liability and the goods are released for free circulation in the UK when the duty is paid. If an approved guarantee or other approved payment arrangement is in place, release is on acceptance of the declaration.
A special customs procedure (meaning, a storage procedure, a transit procedure, an inward processing procedure, an authorised use procedure or temporary admission procedure: see Special customs procedures. For goods released to a special customs procedure, import duty is reduced or postponed (depending on the procedure for which the goods are entered).
A declaration can be made for another customs procedure even though the goods are already entered to a different customs procedure. For example, goods declared and entered for the temporary admission procedure may subsequently be declared and entered for free-circulation. However, goods may not be subject to two customs procedures simultaneously. With one exception, the first customs procedure must be discharged before the goods can be declared and entered for another customs procedure.
It is important that the data that is required to be included in the customs declaration is complete and accurate. The amount of data required will depend on the customs procedure for which the goods are being declared.
Until the end of the Brexit transition period, movements of goods between the EU and the UK have not required customs declarations. After the transition period, subject to unilateral transitional rules, customs declarations will be required.
Who makes the declaration?
A customs declaration may be made by any person who is able to present, or secure presentation of, the goods to customs on import. This will normally be the customer or the supplier or an agent acting for one of them. A customs declaration may be made up to 30 days before the goods are imported. A customs declaration must be made within 90 days of presenting the goods to customs. However, if the goods are lawfully exported within the 90-day period, the obligation to make a declaration is extinguished. If an obligation to make a customs declaration within the 90-day period is not complied with, the goods are liable to forfeiture, which triggers a liability to import duty.
How is a customs declaration made?
Normally, the customs declaration must be made, and made available to HMRC, electronically in accordance with provision made by public notice. Therefore, in most cases, electronic declarations must be made through CHIEF (or CDS). However, declarations may be made in writing, orally or by conduct in accordance with provisions specified by public notice. Regulations also provide for matters concerning non-electronic declarations.
What does a customs declaration include?
A customs declaration in respect of any goods must contain information, and be accompanied by documents, of a description specified by HMRC in a public notice. The declaration must also include a declaration by the person making it that the declaration is, to the best of the person's knowledge, correct and complete.
Detailed guidance on how to complete import (and export) entries is currently contained in Volume 3 of the Integrated Tariff of the UK, which it is assumed will be continued (with any appropriate modifications) after the transition period. The data fields are designed to collect all the data necessary to determine the status of the goods being imported. This information is required to determine the duty payable and also how the goods are to be treated after they have been presented to customs.
The data required in a declaration for the free-circulation procedure includes:
The consignor and consignee (the sender and recipient of the goods). The consignee's Economic Operator Registration and Identification (EORI) number must be included as if it is not, the C79 import VAT certificate will not be issued.
The name of the declarant.
The 10-digit commodity code for the goods covered by the declaration. This is crucial in determining whether duty is payable and, if so, the amount payable.
A code signifying the method of shipment (for example, sea), information concerning the means of transport and where the consignment of goods was shipped from.
The country of origin of the goods, which may differ from the country of shipment. This is in the form of a two-letter code (see HMRC: UK Trade Tariff: country and currency codes). This allows customs to assess whether the goods may be subject to special rules for example, whether the goods are eligible for preferential rates or could be subject to economic sanctions.
The value of the goods for customs purposes. This is required not only for ad valorem duties, but also if the amount of duty is calculated by reference to the weight or other measure (and not dependent on the value of the goods). This is because the value for VAT purposes is based on the customs value. However, the weight of goods must also be included.
A full description of the goods and information about packaging (for example, container).
The customs procedure code (CPC). CPC's identify the customs (and/or excise regimes) that goods are being entered into and removed from (if applicable). The CPC is seven-digit code. The first two digits identify the procedure for which goods are being entered (for example, 40 for the free-circulation procedure). The second two digits identify any CPC for a previous procedure (that is, the procedure from which the goods are being released. If there is no previous CPC, the code is 00. The third three digits is national coding to provide more detail. For information about the existing Single Administrative Document (SAD) (the electronic import declaration) and the information required. Whilst changes may be made to it for use after the transition period, the information requirements are unlikely to change.
Will Brexit affect imports?
The UK has now left the European Union, so from 1 January 2021, customs declarations are required when importing goods from the EU. These rules previously applied when importing goods from the rest of the world.
Andrew Skinner advises clients on all customs matters, including;
Customs clearance procedures
Preferential trade arrangements
Valuation of goods
Importer of record
Customs procedure codes