HCR Law Events

30 July 2020

New guidance for importing to the UK in 2021

As the UK prepares for the end of the Brexit transition period, new HMRC guidance has been issued to importers, with several different options on offer, depending on the type of goods being imported and the eligibility of the importer. In all cases, importers may use customs intermediaries, but if they choose not to, the requirements vary in complexity. Sarah Woodall looks at the key points and their advantages and drawbacks.

Importing goods through Deferred Declarations – for non-controlled (standard) goods, this allows the importer to keep records of the goods they are importing and delay submitting a full customs declaration and paying customs duties for up to six months after import.

The advantages of this new approach include that importers have the potential to improve cash flow, because they will have had the chance to sell the products they have imported before having to pay the duty. If goods are released more quickly because the administrative burden is delayed, that could also benefit the importer, and there could also be time or money saving benefits because multiple declarations could be made at once.

But businesses will have to rethink their business plans to enable delayed payments, not every importer or every type of good will be eligible and there is room for error through the self-recording of imports; new quality assurance processes may be needed, which will cost time and money.

Importing goods through standard import procedures

This approach does not require a highly detailed import record to be kept (though that might be wise) – it is simple and it applies to all goods; no duty deferment account is needed (which allows you to pay duty at a later date but for which you must apply). But it could hit cash flows because duties have to be paid immediately, and this could also be less efficient than administering multiple imports at once within the first six months after import. The release of goods could also be slower.

For some controlled goods, the importer may wish to consider using the Simplified Declaration procedure. They would need to be authorised to use this process. They can also use this process for standard goods.

To be eligible for this, an importer must have a good customs compliance record, including VAT returns and duty deferments, and must have quality assurance procedures in place. But the process needs less information than for a full declaration, goods can be released more quickly – useful if they are perishable – and it could aid cash flow because duties and VAT are not paid until the following month when the supplementary declaration is submitted.

If an importer is moving goods through multiple territories or wants to complete their customs formalities away from the border, they may use the Transit procedure. This has the advantage of suspending the payment of duty while the goods are in transit, and using deferred declaration process will add further delay to that. Customs clearance formalities take place at the goods’ destination, rather than at a border, which could add delay in releasing them. But it is much more complex process – various applications are needed, along with a guarantee to secure potential customs debt. It also places a greater potential burden on the exporter.

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About the Author
Sarah Woodall, Head of Tax, Partner (Barrister)

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