Posted: Fri 24th Jun 2022
One of the major changes to customs rules in 2022 is that all businesses must now submit customs declarations when moving goods between the UK and the EU. A customs declaration is a legal document that provides details of goods that are being imported or exported.
We explain the submission process in another blog, Customs declarations: How to submit them when importing or exporting goods. But one key decision you have to make is whether to submit customs declarations yourself or entrust the task to a third party.
In this blog, we cover who these third parties might be and the benefits of using them. We also look at what's involved if you want to keep the entire process in-house.
Like many small and medium-sized businesses, you might want to use an intermediary to submit your customs declarations. A third-party customs agent (or broker) would be one example.
This is a company that specialises in submitting customs declarations and has the necessary electronic access to customs systems (like CHIEF and CDS), experience and knowledge of current rules and regulations.
What's the best way to select a third-party customs agent? How do you know which one is most suitable for you?
The GOV.UK website has a list of several customs agents. You can typically choose any of them, but be aware that many are very busy and oversubscribed at this time due to the rule changes and the higher number of businesses needing their services. Always plan well in advance.
Once you've chosen an agent, you then need to agree the terms of your arrangement. On pricing, don't be afraid to query costs and negotiate.
Also discuss the type of agreement you're entering into. For example, is the agent acting in your name, as your direct representative? Or acting for you but in their own name, as an indirect representative? Whichever route you follow, the onus is on you to provide accurate customs information.
In this case, you're solely responsible for making sure all the customs information is accurate and correct and that you've paid whatever customs duty and import VAT is due.
You'll need the agent to act as a direct representative if you intend to use any customs special procedures such as inward or outward processing, temporary admission or customs warehousing.
If you're bringing goods into the UK and entering into any of those types of services, you'll need a direct representative, and you'll have to agree this with your agent beforehand.
When acting as your direct representative, the agent can:
use their own authorisation to submit simplified declarations
use your authorisation, if you have one
Again, you'd need to agree this with the agent in advance. It's likely they'll ask you to sign some form of paperwork to indicate exactly how your arrangement will work.
An indirect representative is when the third-party customs agent acts for you but in their own name. In this situation, they become equally responsible for the accuracy of the information and for making sure customs duty and VAT payments are made.
They can use their own authorisation (if they have one) to submit simplified declarations. However, if you plan to use any customs special procedures such as inward or outward processing, temporary admission or customs warehousing, an indirect representative can't act for you. They must be a direct representative.
If you work with a courier, haulier or freight company (a freight forwarder, for example), you may choose to have it submit declarations on your behalf, in the same way a customs agent would. Obviously, this means you'd have to supply all of that information to the company first.
Charges for this service can vary. In some cases, you might expect to pay £50–£60 per entry, although it's definitely worth shopping around for the deal that best suits your budget.
If you decide to submit your own customs declarations, be aware that the process can be quite complicated and it helps to have some experience of customs rules and regulations and how it all works. You also need to have the right software to be able to connect to the online systems used to submit declarations.
Consider whether you have the expertise in-house to submit customs declarations yourself, without any help. You need to understand what information is required, what to fill in, what the correct codes are for the goods you're moving, and so on.
Consequently, you might need to undergo some training or employ someone new who has this expertise and can do the job for you.
You'll also need to buy or subscribe to a specialist software package that can connect to HMRC's digital systems and submit declarations electronically. This software generally makes the whole submission process easier and more straightforward.
It's also typically less expensive than paying to use a third-party agent or broker, although that will ultimately depend on the number of declarations you need to submit.
Once you have the software and you're confident in using it, you need to apply for access to the Customs Declaration Service (CDS). This is HMRC's computer system for recording the movement of goods by land, air and sea.
HMRC is in the process of phasing out its old CHIEF system, replacing it fully with CDS. CHIEF is set to be discontinued for imports from 1 October 2022 and for exports from 1 April 2023.
Finally, you'll need to apply for a duty deferment account. This allows you to delay paying whatever customs duty is due on the goods you're importing, until the 15th day of the following month.
The application process is straightforward and you can do it online at GOV.UK. Having a duty deferment account reduces your admin and means you don't have to make customs duty payments right away.
If you're based in Northern Ireland, the government's Trader Support Service can help and submit customs declarations on your behalf. It's a very useful service and definitely worth considering for Northern Irish businesses.
Advice and information on how small businesses can successfully import, export and expand overseas, provided by Enterprise Nation in collaboration with Deloitte. Take me to the hub
Take the first step to successfully starting and growing your business.