Preparing for a UK Customs Audit

Whether you are a trader, Importer or Exporter of goods, transport company, government body, or Customs Broker, no one escaped the new way of working. As the dust has settled, the reality of the UK’s customs environment is being discovered. 

The UK government decided to apply easements as part of the BREXIT transition, being mindful of the change in traders. The main easement created the ability to delay declarations for goods imported into Great Britain between January 1 – July 1, 2021. On March 16, 2021, this was later extended to run to December 31, 2021.

Based on this easement alone, it is estimated that there could be up to 400 million customs declarations not made post-implementation, equating to around £30bn of unpaid VAT. It remains unclear what this actual figure is.

Some of the reasons why the traders failed to declare could be:

• Lack of customs experience
• Misunderstanding of what the easement was – new traders to customs procedures assuming the easement meant that they didn’t have to do anything for the first six months
• Customs controls not managed before BREXIT

With BREXIT and the COVID-19 pandemic well out of the way, HMRC are now looking retrospectively at the work that has or has not been done by traders. In the form of Customs audits and inspections, HMRC is reactively coming after any unpaid VAT. With an article published by HMRC on February 22, 2023, they are reminding businesses about unpaid VAT, penalties, and interest on outstanding amounts.

Five things a trader needs to consider when preparing for a Customs audit:

1. Have you declared everything during the easement period between January 1 – December 31, 2021?
2. How accessible are your Customs records with your appointed broker?
3. Do you have proof of Export, if applicable, for goods that have left the country? (Including EXW shipments).
4. Do you have a robust Customs program?
5. What are your Customs accuracy and compliance like? Commodity code classification, licensing requirements, etc.

How can we help?

Expeditors Customs Brokerage services are designed to offer end-to-end seamless Customs compliance. Whether it be visibility and accessibility to Customs documentation or guidance on the ever-changing world of Customs, our program brings global consistency with local knowledge. 

Need help with Product classification?

Our consulting firm, Tradewin, assists in the detailed role of product classification, ensuring that you not only classify your goods correctly but also comply with the latest Duty and VAT rates.

For more information on the UK Customs audit, please fill out the form below or reach out to your local Customs contact.