Have you reviewed your procedures for instructing your customs clearing agents lately? If not it could be costing you more than it should in unnecessary import duty, VAT and agents fees.
When a shipment arrives from outside the EU to the UK it will require clearance through UK Customs. If you do not have a nominated or pre-instructed clearing agent you should be contacted for customs clearance instructions. This is when you should instruct the clearing agent how you would like the shipment cleared through customs.
At this stage you should advise:
- Customs procedure code
Why is the shipment entering the country? is it just a straight forward commercial purchase shipment? Or is the shipment coming in for repair, exhibition or another reason? Each import scenario has a specific customs procedure code (or CPC). Depending on why they shipment s coming into the country will affect how it is cleared through customs and how the Duty and VAT should be paid. If you are using the wrong procedure you could be paying too much.
- Tariff Heading / Commodity code
All goods can be classified as a tariff heading (also known commodity code or HS number). This number defines the import duty rate and how VAT is applied for the goods. If you do not already have or know what tariff heading your goods are classified under you should check with your local customs office. You can also investigate online via the customs website here. If the wrong tariff heading is being used you could be paying the wrong amounts of duty and VAT
- Duty Deferment details
Do you have a duty deferment account? If so you can authorise the clearing agent to use it for payment of the import duty and VAT. If you use the agent’s deferment account they will charge you a percentage fee so avoid this where possible.
- Delivery instructions
Do you need the shipping agent to deliver your shipment? If so, get a quotation first. You may be able to collect the goods to avoid paying a delivery cost. Shipping agents often moved cleared freight to their own warehouse to avoid airline storage costs so you could collect from them.
Points to check
- Preferential Trade and Trade Agreements
Are the goods being imported from India, Turkey or Israel? These countries (among others) have preferential trade agreements with the UK.
Check for preferential documents such as:
- GSP (generalised system of preference) form
- REX (registered exporter) statement on the commercial invoice
- EUR1 form
- ATr form
With these you can pay a reduced percentage amount of import duty (often zero).
Many countries have trade agreements with Europe to pay a reduced (often zero) amount of import duty. You still need to declare your goods are eligible and of preferential origin (from the country with the trade deal) to get the reduced rate.
In both cases – if you do not declare this on your import entry you will pay the full duty rate.
- Returned or Temporary Import Goods
If the goods are being returned to the UK you can provide proof of the original export and clear the goods as returned goods to avoid re-paying import duty and VAT.
If the goods are only temporarily staying in the UK you can clear the goods as a temporary import and put the import duty in suspension for you to claim back upon proof of re-export.
I had a delivery but wasn’t contacted
If you have a shipment delivered:
- that has been cleared through customs
- and you were not been contacted for clearance instructions
You should contact the shipping company to ensure the correct procedures have been met. You can also request a copy of the import customs entry if you have not already been sent one.
Remember: your clearing agent in acting under ‘direct representation’ of your company. If an error is made by your instruction (or lack of) your company is liable.