News and updates

UK duty suspensions application window now open

On 8 May 2024, the UK duty suspensions window opened for 2024, allowing UK manufacturers to apply for temporary removal of customs duty on imports of certain goods for use in manufacturing. In this way, the suspensions are designed to support UK manufacturers in remaining competitive in the global marketplace, where sufficient UK production of comparable product does not exist.

The current window will remain open for applications until 3 July 2024, at which point the government will start to assess which inputs will be eligible to benefit from a duty suspension, factoring in the interests of the UK and its producers. Successful applications will result in a two-year tariff suspension.

To qualify for a duty suspension, the applicant must: 

  • be based in the UK 
  • be able to demonstrate a lack of UK supply of the requested commodity 
  • provide evidence and calculation of the duty impact the suspension would have for the business.

Additionally, the imported goods must be for use in manufacturing or for further processing – finished goods are not eligible for suspension.

In 2023, the government granted new duty suspensions to 126 commodity codes and extended duty suspensions on 11 others.

Crowe’s customs team recently supported a client in obtaining duty suspensions for five of their imported products, resulting in expected duty savings amounting to several million pounds in the coming years.

If you are currently being impacted by customs duty on imports of materials or components which are otherwise not available in the UK, and would like to explore whether a duty suspension application may be viable for your products, please contact Ian Worth or your usual Crowe contact.

HMRC lose Inward Processing tribunal case

In a judgement released at the end of March 2024, an Upper Tribunal (UT) overturned the First-Tier Tribunal (FTT) decision from November 2022 which held that ThyssenKrupp Materials UK Limited (ThyssenKrupp) was liable to pay a £8.8 million duty demand due to non-compliance with the conditions of its Inward Processing (IP) authorisation.

Specifically, the FTT ruled that a single error on an import entry on a Bill of Discharge (BoD), or mismatches between the BoD and customs data, may give rise to a customs debt. Notably, the FTT highlighted that the materiality of the error does not carry any significance, in response to the business’ proposition that the error in question was de-minimis.

The business appealed to the UT, on the basis that the FTT erred in both findings highlighted above, and sufficient rationale was not provided for the conclusions reached.

The business put forward three key grounds for their appeal

Ground one

ThyssenKrupp stated that the FTT erred in its finding that the BODs were required to contain accurate particulars which reconciled the MSS data and BoD, without further investigation. For example, a mismatch could be that the commodity code was inaccurately declared in the MSS data, but accurately declared in the BoD. The business also disagreed that a breach of this requirement should give rise to a customs debt.

The UT disagreed with the FTT’s and HMRC’s conclusions, stating that their approach suggests that the business should have entered inaccurate information, purely in order to allow for reconciliation with the customs data. Where a discrepancy is identified, the relevant records should be reviewed to ascertain whether the accuracy of the BoD can be verified. In the business’ case, verification was possible, and as such the UT ruled there is no breach of requirements and no customs debt due.

Ground two

The business claimed that the FTT erred in interpreting a previous CJEU case, Döhler Neuenkirchen GmbH v. Hauptzollamt Oldenburg (Döhler), to mean that a single error in one row yields a customs debt for all goods covered by the BoD.

The UT highlighted that the primary focus in the Döhler case was the consequence of failing to submit a timely BoD at all, which fundamentally differs to submitting a BoD with errors. In the case of Döhler, the BoD was submitted two months late and as such, yielded a proportionate penalty. However, the UT stated that it would be ‘entirely irrational’ for minor errors within a large data set to compromise the validity of the entire BoD.

Ground 3

The company stated that the FTT erred in holding that any error, in spite of it’s materiality or significance, gives rise to a customs debt, and HMRC proposed twelve examples in this respect. For example, HMRC highlighted that there was a discrepancy between the quantities shown in the customs data and BoD.

The UT recognised the inaccuracy but claimed that the focus should be the resolution of the error – the business did resolve the error and there was no impact on the customs duty payable position. As such, customs debt should not be incurred since there is no adverse impact on the operation of the IP procedure.


The UT considered that all three grounds were well-founded and the appeal was allowed. This is a positive outcome for the business and highlights the merits of appealing a decision if well-founded arguments can be made.

Whilst procedures should always be implemented for customs authorisations to be used in a compliant manner, ideally getting things right at the point of entry, the case also highlights the importance of having processes for post-entry checks and correcting errors once identified.

The submission of a Bill of Discharge is a key condition of Inward Processing authorisations. Its purpose is to demonstrate that goods imported with relief from customs duty have been appropriately disposed of, usually by re-export following processing, but also by other means specifically permitted in the authorisation. Inaccuracies in the administrative obligations of operating Inward Processing should not override the fact that the principal conditions have been fulfilled, namely that the imported goods have undergone processing and the resulting compensating product has been re-exported. The fundamental objective of customs duty is to protect resident businesses from competitive imported products, so it would be unjust to require payment of customs duty on goods which are not remaining in the importing country.

To discuss how we can help to obtain or manage authorisations for customs special procedures, or to resolve any compliance dispute with HMRC, please contact Ian Worth, or your usual Crowe contact.


Launch of UK CBAM consultation

The UK government has launched a consultation to seek views on proposals for the design and administration of the UK carbon border adjustment mechanism (CBAM) from 1 January 2027.

The consultation follows the government’s announcement that a UK CBAM will be implemented from 1 January 2027, covering the import of goods in the iron and steel, aluminium, cement, fertiliser, hydrogen, ceramics, and glass sectors. UK CBAM will not cover electricity, which is covered by the EU CBAM, but will cover glass and ceramics, which are both not covered by EU CBAM.

Annex A of the consultation document provides an initial list of specific commodity codes which the government intends to be covered the measure. For the sectors covered by both EU and UK CBAM, the commodity codes covered are broadly similar but not identical, with some differences in the Headings covered. For ceramic products, eight commodity code Headings in Chapter 69 of the UK Global Tariff are covered, including products such as ceramic sinks. For glass products, ten commodity code Headings in Chapter 70 of the UK Global Tariff are covered, notably including products such as glass bottles and jars.

The UK CBAM liability will be calculated by multiplying the total embodied emissions emitted per type of good by the relevant UK CBAM rate, minus any carbon price already paid in the country of manufacture. In terms of reporting the embodied emissions, businesses will be able to use actual emissions data which must be verified by an independent body, or default values which will be published closer to the time of implementation. The UK CBAM rate will vary according to the sector the goods fall under, and these will be determined and updated by the UK Government on a quarterly basis.

The ‘liable person’ will be required to register with HMRC, submit CBAM returns and pay the liability at the end of the accounting period. The liable person could be the importer, the party who holds ownership of the goods whilst they are under customs control (if this is different to the importer), or the appointed customs representative.

The information that will be required on the CBAM returns is shown on page 37 of the document e.g. CBAM commodities imported, weights, embodied emissions and carbon prices paid overseas.

In terms of submission, the first accounting period will run for 12 months i.e. traders will have until 30 May 2028 to report on the CBAM goods imported between 1 January 2027 until 31 December 2027. From then on, quarterly submissions and payment will be required, which will align with the accounting period relevant to the business.

The plans outlined by the government demonstrate that whilst similar to the EU measure in principle, the UK CBAM is likely to significantly diverge from the EU CBAM in many areas of its design and operation.

The consultation document provides a useful overview of the current plans for UK CBAM and if you wish to participate in the consultation and share your views, please feel free to use the online form or respond via email to [email protected].

Please note that the consultation closes on 13 June 2024. To discuss this further, and if you would like us to support in preparing a response to the consultation, please contact Ian Worth, or your usual Crowe contact.

Important updates to Supplementary Declarations

From May 2024, new changes will be introduced in respect of the Simplified Customs Declaration Process (SCDP) and Simplified Export Declaration Process (SEDP).

HMRC previously carried out a consultation in respect of the processes and businesses expressed an interest in increased timeframes for completing declarations and greater flexibility in regards to aggregation of timeframes. As the changes will be effective from May 2024, movements of goods in April 2024 will be first in scope. We have summarised the three key changes below.

Changes to supplementary declaration dates

  • For imports: Supplementary declarations should be submitted by the 10th calendar day of the month following the import (this was previously the 4th working day following the import).
  • For exports: Where more than one consignment is being exported, the same timeframes as stipulated above for imports, will apply.
  • Final supplementary declarations: These should be submitted by the 11th calendar day of the month following the import (this was previously the 4th working day following the import).

Changes to the Duty Deferment Account (DDA) payment dates

  • For CDS users: The payment date will be the 16th calendar day of the month, or the next working day where this falls on a weekend/ bank holiday (this was previously the 15th calendar day).
  • For CHIEF users*: There are no changes to payment dates i.e. the 15th calendar day will be maintained.

*Please note that CHIEF is still in operation for traders who import goods subject to excise duty in the UK.

The payment date will be changed automatically by HMRC and no further action is required from traders in this respect. Traders who use both CHIEF and CDS, can naturally expect payments to be processed on varying dates in accordance to the above.

Changes to aggregation for supplementary declarations

HMRC will introduce an option for traders to aggregate supplementary declarations across a calendar month. This means that traders can submit multiple similar movements on a single supplementary declaration, thus reducing the total number of declarations required in a month. This change is additional to the existing daily and 10-day aggregation options already in place.

HMRC have also emphasised the importance of maintaining a good audit trail, noting that aggregation across a 10-day or monthly period could be refused if there is conflict with the timeliness of updating Customs Warehousing records or Entry in Declarants Records (EIDR). It is therefore advised that businesses who utilise special procedures select appropriate aggregation methods to ensure good compliance.

HMRC have also confirmed that declaration file sizes should not exceed 10Mb. We appreciate that these file restrictions may create issues for some traders but expect that there will be some workaround solutions e.g. uploading smaller files or using application extensions e.g. Dropbox. Whilst HMRC have not explicitly confirmed these solutions, or envisage this to be an issue, we can expect to see further communications once the changes come into effect.

To discuss further, please contact Ian Worth or your usual Crowe Contact.

Modernising Customs and Excise authorisations

HMRC’s Modernising Authorisations (MA) project was announced as part of the 2023 Spring Budget and will be introduced later this year. The purpose of the project is to simplify and streamline customs authorisation processes through implementation of a digital self-serve portal for traders.

Customs authorisations help businesses manage obligations associated with customs and excise activities. Traders are typically required to obtain an authorisation before using a customs special procedure e.g. Customs Warehousing, which allows the suspension of customs duty and VAT. At present, there are 42 standalone customs authorisations, but the project features a new ‘grouping model’ which will categorise these into five groups.

  1. Authorised Economic Operator (AEO) e.g. AEO-C and AEO-S.
  2. Fiscal e.g. Customs Warehousing and Inward Processing.
  3. Declarations and Simplifications e.g. Entry in Declarant’s Records (EIDR).
  4. Transit e.g. Authorised Consignee and Consignor.
  5. Ports and Wharves e.g. Airport and Railport approvals.

The grouping model recognises the similarities in the criteria and benefits provided by the various authorisations. The practical advantage is that traders will be able to make a single application to access all the facilitations within a group, and provide supplementary information where required. The self-serve portal will have accompanying guidance notes for traders completing digital applications, and reduce administrative burdens as information will be requested on a single occasion.

Notably, Duty Deferment Accounts (DDAs) will continue to exist as a standalone authorisation as this is a payment mechanism and used for purposes other than customs. As a different approval process is in place for Freeport Custom Site Operators (CSO), this will also be retained as a standalone authorisation. The UK Internal Market Scheme (UKIMS) will also not feature in the grouping model, as this solely relates to movements of goods between the UK and Northern Ireland. Excise authorisations will also not be included in the grouping model.

Existing customs and excise authorisations still remain active, but will eventually be migrated to the new system. Additional authorisations and authorisations which have expired, should be applied for on the new system. New authorisation applicants should also apply on the new system once this comes into force on 30 September 2024.

To discuss further, please contact Ian Worth or your usual Crowe Contact.

EU Deforestation Regulation – preparation for EU businesses

As of June 2023, the EU Deforestation Regulation (EUDR) has entered into force, and there are now further important steps that businesses who trade in-scope goods must comply with ahead of its full application on 30 December 2024.

The EUDR is a new regulation to protect against deforestation and forest degradation, as well as the increase of agricultural land being used to produce certain commodities. As a large consumer of the type of commodities linked to this activity, the EU is taking the initiative in reducing the detrimental effects caused by the importation and consumption of the types of commodities outlined below.

Similar to the newly introduced EU Carbon Border Adjustment Mechanism (CBAM), the EUDR aims to contribute to the effort to reduce carbon emissions and promote sustainability globally. While the EUDR will predominantly affect EU importers, it will also have a ripple effect throughout supply chains, with suppliers now being required to provide relevant information about the goods that they are sourcing and exporting.

Which commodities are in-scope?

The current scope includes cattle, wood, cocoa, soy, palm oil, coffee and rubber. In addition to these commodities, certain derivatives are also covered by EUDR, such as leather, chocolate, tyres and furniture.

Any business which places these commodities on the EU market will now have to appropriately evidence that these products did not originate from land which has been deforested or degraded. This will also apply to intra-EU trading and the export of such goods.

The full list of in-scope HS codes is contained in Annex 1 of Regulation (EU) 2023/1115, and the scope of goods is expected to continue expanding in coming years.

Packaging material used exclusively to ‘support, protect or carry’ another product is not covered by EUDR, regardless of whether the material used falls under Annex 1. However, where packaging is placed on the EU market as a standalone product, it then becomes covered by EUDR and subject to scrutiny by national authorities.

Importer compliance requirements

All in-scope goods placed on the EU market will have to be accompanied by a comprehensive due diligence statement for each shipment, which must include a thorough risk assessment and evidence of the implementation of risk mitigation measures, ensuring that the goods comply with EUDR.

Supply chain visibility and cooperation will be crucial in order to fulfil the reporting requirements of EU importers, for example, being able to identify the exact plots of land where production occurred. Businesses will be expected to periodically review their risk procedures and file public reports annually, which will be made available to national authorities.

Penalties for non-compliance include fines of up to 4% of the trader’s EU annual turnover, confiscation of goods and associated revenue, and temporary bans on trading in-scope goods within the EU.

Forward planning

In December 2023, the UK Government published information in relation to the UK’s version of EUDR, known as the Forest Risk Commodities (FRC) scheme. The objective of the scheme is similar to EUDR, but the scope of commodities is more limited, with coffee, rubber and wood being excluded. Further updates and guidance are expected in relation to FRC in due course.

For any business affected by EUDR, we advise identifying and collecting data on every part of your supply chain as part of the due diligence obligations. A structure should be put in place to highlight and monitor any risks on an ongoing basis, with appropriate measures to address any areas of concern. All of this is not possible without the transparency and support from suppliers, and we advise that the terms of such relationships are re-assessed as part of the compliance process, as ultimately the risk lies with the party placing the goods on the EU market.

For more guidance on how EUDR may impact your business, please contact Ian Worth or your usual Crowe contact.


UK and EU recognise Russian steel sanctions equivalence

Both HMRC and the EU Commission have published additional guidance in respect of the prohibitions of imports of iron and steel products from Russia. 

Removal of evidence requirements for UK and EU trade 

From 26 February 2024, UK traders will no longer be required to provide evidence of the supply chain history at the point of import into the UK, for specified iron and steel goods imported from the EU. 

It should be noted that other customs arrangements continue to apply, including in relation to HMRC checks, inspections, and the possibility of requests for documentation and evidence once goods have been released. It should also be noted that for a limited scope of goods, the easement will be implemented at a later date.

In a similar vein, the EU Commission has added the UK to the list of ‘partner’ countries in Annex XXXVI of Council Regulation (EU) No 833/2014. This removes the requirement for EU importers to provide evidence of the country of origin of the iron and steel inputs if they were imported from the UK. 

The EU and UK have recognised the equivalence of the measures both parties have implemented on Russian iron and steel products and the removal of evidence requirements will help facilitate trading of goods between the UK and the EU which fall within the scope of these regulations.

Changes to the cut-off date 

A licence e.g. a General Trade Licence will still be required to import iron and steel goods which are subject to the UK sanctions. For example, traders can import prohibited goods if they were manufactured or produced in Russia before 23 June 2023, or were not located in Russia after 23 June 2023. The Department for Business and Trade (DBT) previously confirmed the cut-off date as 21 April 2023, but we recognise that this new cut-off date aligns with what has previously been confirmed by the EU. 

The guidance highlights that the precise date of the manufacture is not required, but rather evidence to demonstrate the location of goods before the cut-off date. Suggested documents include a commercial invoice, bill of lading or a sales contract. 

For more guidance on the impact of the sanctions, please contact Ian Worth or your usual Crowe contact.

Burden of proof – an expensive lesson in appealing HMRC decisions

A recent First-Tier Tribunal case saw Laurence Supply Co Limited (Laurence Supply) owing £600,000 in import duty to HMRC, as they were unable to sufficiently prove that their classification of various imports of handbags and purses were accurate over a retrospective three year period.

The goods in question included handbags and purses of ‘suedette’ and/or ‘leather look’ materials. Laurence Supply had been classifying these products using commodity codes covering both textile material and other material, both attracting a 3.7% duty rate at the time of import.

Classification dispute

HMRC’s C18 post clearance demand note was issued after they had requested further detail on a sample of products imported by Laurence Supply, who were unable to fully satisfy HMRC’s request. Subsequently, HMRC conducted an on-site visit to examine the stock and took samples for further analysis. After consulting with the UK’s Tariff Classification Service, HMRC determined that one of the samples had an outer material of plastic, meaning the correct commodity code would instead attract a 9.7% duty rate at the time of import.

After this finding, HMRC went on to inform Laurence Supply that after seeing their stock, they believed 90% of the goods were classifiable in the same way as the ‘plastic’ sample product. Laurence Supply were asked to provide records going back three years, to estimate how many of their products had been incorrectly classified, with calculations to evidence their conclusion. Laurence Supply could not provide an accurate and, therefore, satisfactory answer.

Interestingly, the sample product was determined by the Tribunal to be classifiable as textile instead of plastic, meaning it was removed from the C18 demand. The focus of this classification was not on the composition of the material, but instead on the appearance of the material to the naked eye, which is explained further in Additional Note 1 to Chapter 42:

"For the purposes of the subheadings of heading 4202, the term 'outer surface' is to refer to the material of the outer surface of the container being visible to the naked eye, even where this material is the outer layer of a combination of materials which makes up the outer material of the container"

The importance of keeping accurate records 

While Laurence Supply’s classification for their sample product was supported by the Tribunal, this did not impact the remaining goods which formed part of the C18 demand, of which there were over one thousand different styles. The Tribunal noted that “it is for Laurence Supply to establish, on the balance of probabilities, which of the imports within the C18 were wrongly classified. Laurence Supply has not sought to do this, and in any event has not done so” and the C18 demand was only reduced by £2,000, to account for verifiable imports of the sample product.

Had Laurence Supply been able to sufficiently prove that HMRC’s determination on the classification of their handbags and purses was wrong, as they had with the sample product, they may well have been able to reduce the duty demand by a far greater amount.

This case highlights the importance of compliant classification, but also proper documentary record keeping. The inability of Laurence Supply to go back and retrieve the required documents in relation to the goods in question was their ultimate downfall. For any business importing goods into the UK, all relevant import records should be kept for a minimum of three years and be readily made available when HMRC wish to inspect them. This should include technical design details where the product’s composition is a key factor in its customs classification.

Notably, Laurence Supply has 56 days to appeal, from the date the decision was awarded by Tribunal. An appeal would only be merited if Laurence Supply could obtain appropriate evidence that HMRC’s proposed classifications in respect of the remaining products were incorrect. If the business were able to collate the required information, there could be potential to reduce the duty demand, as the case exemplifies the adverse consequences of poor-record keeping and compliance. If the timeframe to submit an appeal lapses, we recognise the difficulty in later challenging the duty demand, as this will likely become a crystallised cost.

Our Crowe customs team are experienced in dealing with such matters on behalf of our clients.

Previous statistics obtained by Crowe from HMRC show that while less than 1% of duty demands issued by HMRC are formally challenged by requesting a review, nearly 50% of those demands are either reduced or overturned in full, when challenged.

If your business has been issued with a duty demand from HMRC, please contact Ian Worth or your usual Crowe contact to discuss how we may be able to help.

Delay to January MSS/CDS data reports

HMRC have confirmed that due to technical issues, MSS/CDS data reports for January will not be sent out this month. 

HMRC currently anticipate that January reports will be sent with February reports in March. This timeframe however is not definitive and HMRC will provide further updates in due course.

The delayed provision of the reports will impact businesses who subscribe to the reports as an integral part of their internal audit procedures, and who use the reports to check against the payments against deferment accounts.

Regular importers and exporters of goods to and from the UK are strongly encouraged to subscribe to the reports, which summarise all customs declarations made in the name of a business on a monthly basis, and can also be accessed retrospectively. When analysed, the reports can provide an invaluable insight into a company’s international trade activity, highlighting areas of opportunity and risk, and crucially, helping to assess whether the business may be paying too much customs duty.

Our customs data analytics tool, Customs-ID, can simplify this process by evaluating large data sets and producing digestible insights such as duty reclaim opportunities, utilisation of free trade agreements, performance of customs agents, the need for process amendments, and much more. Find out more about Customs-ID.

To discuss further, please contact Ian Worth or your usual Crowe Contact.

Human or non-human? Doll, toy or statuette? The complex classification of action figures

On 22 December 2023, a First-Tier Tribunal judgement was given in the case of Star-Images Enterprises Ltd (‘Star Images) vs HMRC. Star Images is a UK-based toy distributor, which sells a wide range of licensed action figures as well as other types of collectible toys.

In June 2018, Star Images was subject to a customs audit by HMRC, which involved an examination of its international trade records going back almost three years. As a result of this customs audit, which included an on-site visit, HMRC determined that the business had incorrectly classified 189 products between 2015 and 2018.

Subsequently, HMRC issued a letter stating that import duties totalling £363,000 were owed by the business due to the goods being classified under commodity code 9503009990 which covers “other toys” and has a duty rate of 0%.

HMRC contended that these goods should have instead been classified under commodity code 9503002190 which covers “dolls representing only human beings” and had a duty rate of 4.7% at the time of import.

What types of action figure were in dispute?

Star Images had imported a variety of different types of action figures, mainly from popular television shows and films. These included characters from fictional worlds, characters with special powers, and characters with physical features untypical of human beings.

During this First-Tier Tribunal, there were many interesting arguments presented by the parties involved on how they determined that their classification was correct. They key contentions throughout the case covered:

  • does the ‘backstory’ (i.e. whether they are from a fictional world or have special powers) of a character determine whether it is human or non-human?
  • if a character represents a human with a different skin colour (e.g. green), would the character be classifiable as a human or non-human?
  • if an action figure is incapable of movement and is fixed on a non-removable base, is it still classifiable as a doll / toy, or a statuette?
  • can characters wearing masks which don’t clearly show human facial features still be classifiable as a human?

Why does this matter? The primary impact relates to the difference in duty rates and therefore the amount of duty payable. At the time of import, the commodity codes in dispute offered 0%, 4.7% and 6.5% respectively. When imports across a three-year period are analysed, such differences can amount to significant duty differentials. The Tribunal classifications predominantly agreed with HMRC, with some minor exceptions.

Examples of the Tribunal judgement

The Hulk

Star Images classification: 9503004990 (non-human toy – 0%)

HMRC classification: 9503002190 (human doll – 4.7%)

The Tribunal noted that the facial features can clearly be seen, and the character’s body represents a human. Despite the character’s green skin, he depicts a male human being. They agreed with HMRC’s classification.

Sub Zero

Star Images classification: 9503004990 (non-human toy – 0%)

HMRC classification: 9503002190 (human doll – 4.7%)

The Tribunal noted that the facial features are not visible and therefore it should be classified as a non-human toy.

White Walker

Star Images classification: 9503004990 (non-human toy – 0%)

HMRC classification: originally 3926400000 (statuette – 6.5%) but on review 9503009590 (other toys of plastic – 0%)

The Tribunal stated that this character clearly represents a human, but due to it being affixed to a non-removable base, its ornamental value outweighs its recreational value, making it a statuette.

Message to importers

Customs classification can be notoriously complex. Detailed product information is required, along with the utilisation of resources ranging from chapter notes, regulations, classification opinions, and customs rulings. Simple oversight can result in businesses being hit with large duty demands by HMRC, up to three years after the goods were imported.

Equally, misclassification can result in substantial overpayments of customs duty, and importers also have up to three years to reclassify goods in such a scenario, with the possibility of reclaiming customs duty in the process.


Our experience at Crowe shows that ambiguous cases like these are not uncommon, and customs authorities can often be as bamboozled as traders by the nuances of certain areas of the customs tariff.

When faced with such problematic classifications, traders are advised to seek expert support to ensure they do not fall foul of their compliance obligations. A review of customs classifications used by importers can often lead to a substantial duty reclaim, as well as generating savings for future imports.

To discuss reviewing the classification of your products, please contact Ian Worth or your usual Crowe contact.

Steel Safeguard Quota – HMRC issue duty demands

In recent months, we have become aware of HMRC issuing duty demand letters to UK importers in relation to claims for steel safeguard quotas. Many of the demands are for historic periods dating back to the immediate post-Brexit period of early 2021. 

The demands primarily concern use of the ‘duty override’ code to mitigate the safeguard duties, rather than a compliant claim to the available safeguard quota being made.


The steel safeguard quotas allow UK importers to import a finite amount of specific goods (in this case steel) at a nil rate of safeguard duty, with safeguard duty otherwise due at a rate of 25% where the quota is either exhausted, or not claimed in the correct manner.

Quotas are claimed via the import declaration and are allocated on a first come, first served basis – once the relevant quota for a quarter has been exhausted, the safeguard duty must be paid.

The correct preference code and quota order number must be entered on the customs declaration for any claim to quota to be compliant. Use of the duty override code to avoid paying the safeguard duty is strictly prohibited.

Where quota is not claimed at the time of import, traders are able to make belated claims albeit subject to strict conditions.

Have you received a duty demand?

HMRC can raise a customs debt (i.e. claim for duty) up to three years after the date of entry. It is estimated that HMRC have issued over one hundred demands relating to this issue, amounting to tens of millions of pounds in safeguard duty. These have been aimed at businesses who used the override code to mitigate duty costs rather than the appropriate preference code, on the basis that it was not the correct way to claim the duty relief.

However, in the early part of 2021 (the period to which many of the demands relate), we understand there were technical issues with the operation of the quota in CHIEF which led to the use of the override code instead of the preference one.

It appears that HMRC have targeted those businesses that used the override procedure to make their claims. However, through our work with impacted businesses we have come to understand that some customs agents may have been instructed by HMRC to use the duty override code in these instances. It also appears that other businesses which took the necessary steps to make belated claims to quota and hence used the override in what they believed to be the correct manner have also still been issued with a duty demand.


Our Crowe customs team are experienced in dealing with such matters on behalf of our clients.

Previous statistics obtained by Crowe from HMRC show that whilst less than 1% of duty demands issued by HMRC are formally challenged by requesting a Review, nearly 50% of those demands are either reduced or overturned in full when challenged.

If your business has been issued with a duty demand from HMRC in relation to retrospective steel safeguard quota claims, please contact Ian Worth or your usual Crowe contact to discuss how we may be able to help.

Amendments to the UK sanctions on Russia
On 14 December 2023, the UK Government published two new regulations amending The Russia (Sanctions) (EU Exit) Regulations 2019 which impose further import restrictions on specified goods from Russia e.g. metals, additional iron and steel goods, diamonds and diamond jewellery. 

The Russia (Sanctions)(EU Exit)(Amendment)(No.4) Regulations 2023 relates to the prohibition of the import of metals, as well as the acquisition, supply and delivery, directly or indirectly, of these goods. The specific list of metals (and corresponding commodity codes) can be found in Schedule 3BA of the aforementioned regulations. Almost all metals are now sanctioned, including copper, nickel and aluminium. 

While the prohibition was effected on 15 December 2023, there is a grace period in which imports of metals identified in Schedule 3BA are permissible, on the basis that they were consigned from Russia before 15 December 2023 and imported into the UK before 14 January 2024. Please note that this grace period is provided for by Regulation 60G.

Given that the prohibition of specified metals has been newly introduced, we recommend that businesses review Schedule 3BA to understand the impact, if any, on the current imports from Russia and identify which goods may fall within the grace period to qualify as a permissible import.

In regard to sanctioned iron and steel goods, an additional list of goods (i.e. Part 4) was added to Schedule 3B of the 2019 Regulations, also taking effect on 15 December 2023. The relevant goods in Part 4 include goods classified under Headings 7201 – 7205 and covers products such as pig iron and ferro-alloys. However, it is worth noting that the products in Part 4 are not covered by the third-country processing rules implemented on 30 September 2023, for goods detailed in parts 1 – 3 in Schedule 3B. Please note that the grace period described above for metals, also applies to the iron and steel goods in Part 4 of Schedule 3B. 

Finally, a new restriction was also introduced on 1 January 2024 in relation to the import and acquisition of diamonds and diamond jewellery. The relevant goods can be found in Schedule 3GA of the 2019 Regulations and includes goods such as unsorted diamonds and articles or jewellery incorporating diamonds. 

To discuss the above in more detail, please contact Ian Worth or your usual Crowe contact.

UK CBAM announced

Following the consultation on carbon leakage mitigation measures in early 2023, the UK Government recently confirmed that a Carbon Border Adjustment Mechanism (CBAM) will be implemented by 2027.

The mechanism will be introduced to level the playing field between UK importers and UK producers of goods which pose high carbon leakage risk, through the administration of carbon prices and levies.

The sectors initially in scope of UK CBAM compare quite similarly to those covered by the EU CBAM i.e. iron and steel, aluminium, cement, fertilisers and hydrogen. Notably however, the initial scope does not cover electricity, but interestingly does cover ceramics and glass, which are not covered by the EU CBAM. A comprehensive list of products and associated commodity codes has not yet been published, but we can expect further details to be released following additional consultations in 2024.

In a similar vein to the EU’s measure, the UK CBAM liability will rest with the importer and will vary according to the emissions intensity of the goods imported. The carbon prices paid overseas can also be deducted from the total carbon price payable in the UK.

Interestingly, the consultation outcome published by HM Treasury highlights that the UK CBAM will not involve the ‘purchase or trading of emissions certificates’. Under the EU CBAM, EU importers will have to purchase certificates (from 2026) which correspond to the embedded emissions of the specified goods. Whilst there is no further commentary in regard to how this will be managed from a UK perspective, we can expect further details to follow on the specific design and delivery of the measure in due course.

The UK CBAM will cover Scope 1 emissions (direct emissions e.g. on-site fuel combustion), Scope 2 emissions (indirect emissions e.g. steam) and select precursor product emissions which are embodied in the imported products. The guidance also highlights that there is a Scope 3 emissions category which cover indirect emissions created upstream or downstream, but does not explicitly state these emissions will be covered in the initial scope of UK CBAM.

The guidance confirms the current eligibility of free allowances for UK operators covered by the UK Emissions Trading Scheme (UK ETS), but there is little mention of how free allowances will work once CBAM comes into effect.

Whilst the implementation is due by 2027, we can expect more details to follow once additional consultations occur in 2024. The introduction of UK CBAM will have a significant impact on UK businesses importing in-scope goods, and it is important that businesses monitor the developments and understand the impact and resource requirements on their business activities and trading profile.

To discuss this further, please contact Ian Worth, or your usual Crowe contact.

UK Sanctions Updates

New General Trade Licence available for sanctioned iron and steel

The Department for Business and Trade (DBT) announced on 11 December the introduction of a General Trade Licence for certain sanctioned iron and steel products, and relevant processed iron or steel products, which originate in Russia.

Under the terms of the licence, the import of certain prohibited goods into the UK will be permitted in the following instances:

  • where the goods are used as reusable packaging
  • where the goods were manufactured or produced before 21 April 2023
  • where the goods were previously in free circulation in the UK.

It should be noted that each of the three categories listed above has their own individual conditions attached, in addition to the usual requirements relating to maintaining and making available the relevant records upon request by HMRC.

Traders should notify DBT no later than 30 days after first acting under the authority of the licence, and the licence details must be included on the import customs declaration where it is to be used.

Introduction of new unit to enforce sanctions in the UK

In related news, it was also announced on 11 December that a new Office of Trade Sanctions Implementation (OTSI) is being launched to enforce the current sanctions in place against Russia, and investigate any businesses thought to be breaching them. It is expected that the OTSI will come into effect in early 2024, with the expectation that more proactive audit and enforcement activity may then follow.

To discuss the above topics further, please contact Ian Worth, or your usual Crowe contact.

Important XI EORI and Duty Deferment Account changes

HMRC recently contacted XI EORI holders with information regarding changes in using Duty Deferment Accounts (DDA) for Northern Ireland movements of goods.

Going forward, businesses who wish to defer payment of customs charges will need to ensure that they have two separate DDAs for moving goods into Great Britain and Northern Ireland, including movements from GB to NI which are considered “at risk” of onward movement to the Republic of Ireland. The DDA allocated to the XI EORI number will need to be backed by a Customs Comprehensive Guarantee (CCG), but this requirement is not specified for the DDA allocated to the GB EORI.

There are two ways in which businesses can proceed

  • You can either continue to use your existing DDA for imports into Great Britain and apply for a new DDA, backed by a CCG, for imports into Northern Ireland. If this option is chosen, you should provide confirmation by email to the following address: [email protected], quoting your Duty Account Number (DAN) and EORI number.
  • Alternatively, you can transfer your existing DDA to your XI EORI number, by emailing [email protected], quoting your DAN and EORI number. You must wait for HMRC to confirm that the DDA has been transferred to the XI EORI number and continue to use your GB EORI in the interim, otherwise the declaration will not clear. 

Importantly, businesses will have to confirm by 30 January 2024 which of the two options above they would like to follow through with. If HMRC do not receive confirmation by this date, the existing DDA cannot be used for movements into Northern Ireland and as such, businesses will have to apply for a DDA, backed by a CCG, in Northern Ireland.

However, if you inform HMRC that you would like to transfer your existing DDA to your XI EORI by 15 December 2023, you will be able to use this accordingly from 19 December 2023. This also means however that because the DDA was transferred, it will not be able to be used when declaring goods into Great Britain with the GB EORI. A new DDA may be required to cover imports into GB.

HMRC have stated that they have sufficient resources to process applications for new DDAs.

Businesses who use the Trader Support Service (TSS) can expect to receive further instructions and the GB EORI should continue to be used for movements inside and outside of TSS in the meantime.

For further information, please contact Ian Worth, or your usual Crowe contact. 

UK extends rolled-over duty suspensions to 2028

The Department for Business and Trade has announced that all current duty suspensions rolled over from the EU regime have been extended to 31 December 2028. The list of retained suspensions encompasses all suspensions which came into force before, or as part of, the EU’s July 2020 update.

Duty suspensions are designed to support UK businesses in remaining competitive in the global marketplace by temporarily suspending import duties on qualifying goods where sufficient UK production does not exist.

The most recent application window for new duty suspensions closed on 6 August 2023, with the government currently assessing applications, before determining which suspensions will be granted.

The government has also announced an extension to 31 December 2028 for the suspension of import duties on most products deemed ‘COVID-19’ critical, aimed at ensuring continuity for businesses and easing pressure on the NHS.

UK importers should ensure that they are making use of existing suspensions where available to realise duty savings, but care should also be taken to ensure that any utilisation of suspensions is compliant. To discuss reviewing your customs duty exposure and compliance profile, please contact Ian Worth or your usual Crowe contact.

EU publishes 2024 edition of the Combined Nomenclature

On 31 October 2023, the 2024 edition of the Combined Nomenclature (CN) was published by the European Commission.

The CN serves as the EU’s common customs tariff for classifying goods up to 8-digits, and subsequently determining the duty rate and other forms of treatment that should apply to the goods. Every year, the CN is adapted to enhance its functionality and ensure it remains fit-for-purpose.

The 2024 CN will take effect on 1 January 2024, and we have summarised some of the key modifications being implemented.

The European Commission have announced various new CN codes, appearing in the following sections:

CN code(s) CN description
8 0803.90 Plátano de Canarias
20 2010 and 2090 Tomatoes
39 3915.10 and 3915.90 Plastic waste, pairings and scrap
56 5603.14 and 5603.94 Non-wovens
70 7019.62 Glass fibres; other closed fabrics of rovings
94 9401.99 Parts of seats for motor vehicles

In addition to the introduction of new CN codes, subheading 5007.20 covering ‘Other fabrics, containing 85% or more by weight of silk or of silk waste other than noil silk’ has been simplified.

The 2024 CN has also been amended to implement the gradual reduction in duty rates for products covered by the Declaration on the Expansion of Trade in Information Technology Products (ITA), a WTO framework for eliminating duties on certain IT products. Separate CN codes have been created for ‘passive optical splitters’ and other similar devices which now have their own subheading under 9013.80.

Finally, the classification of certain substances in the list of non-proprietary names of pharmaceutical substances has been updated, which can be found in Annex 3 of Part Three (Tariff Annexes) of Annex I to Regulation (EEC) No 2658/87.

For more information, please contact Ian Worth or your usual Crowe contact.

Rules of origin for carmakers

We never imagined that rules of origin would make headline news, but here we are, and not before time. The makers of Vauxhall cars in the UK are seeking a revision of the rules of origin in place since Brexit, as they are unable to source sufficient UK or EU parts in order to meet the strict origin rules.

The crux of this issue rests in the UK/EU Trade and Cooperation Agreement (TCA), which you may remember was hastily agreed in the final days before Brexit "went live" on 1 January 2021. The agreement sets out the rules under which trade between the UK and the EU can be conducted on preferential terms, i.e. free of customs duty.

Without a trade agreement the rate of customs duty on cars is 10%, so not an insignificant chunk of the value of a new car. Under the agreement, the duty rate is zero, but only if the car fulfils the rule of origin.

The TCA incorporates a staged implementation of origin rules for electric vehicles (EV) and their battery packs.

Up to the end of 2023 the manufacture of EV batteries can include non-originating materials up to 70% of the ex-works value, and eligible cars can include non-originating materials up to 60% of their ex-works value.

From 1 January 2024 to 31 December 2026, the value of non-originating materials for batteries drops to 40% of their ex-works value, and for cars the percentage drops to 55%.

Unless the product specific origin rules are reviewed before 1 January 2027, the “standard” rules will then apply, where batteries may include non-originating materials up to 35% of their ex-works value, and cars no more than 45%.  

A feature of the TCA allows for the cumulation of origin with UK and EU originating parts and materials. In this way, Vauxhall cars in the UK can use parts manufactured in the EU and count their value as “originating” providing they can prove that the parts themselves were of EU origin in the first place.

Meeting the TCA origin rules is a clear priority for car makers in the UK, as it eliminates 10% customs duty on their sales to the EU. The cumulation provisions are an essential factor in meeting these rules, and underline the value of a close trading relationship with EU, where many parts are made for UK manufacturers.

The currently eased TCA origin rules for carmakers are about to become more challenging, and in the UK particularly, the lack of progress in EV battery manufacture looks likely to mean that cars made in the UK will not qualify as of UK origin, and then be subject to 10% duty on import into the EU.

Looking more widely, the UK has a number of trade agreements with other countries, all having broadly similar origin rules, but importantly they don’t allow the UK to cumulate origin with EU materials. This makes it even harder for UK carmakers to sell in other countries, and underlines the need for essential components, particularly high value battery packs to be manufactured in the UK.

Crowe’s customs and international trade team work with many clients in the automotive supply chain, and can help suppliers to determine whether or not their products qualify as being of UK origin, which in turn helps the car makers to meet their rule of origin. For more information, please contact Ian Worth or your usual Crowe contact. 

Withdrawal of document waiver code 999L

*Please note that the below is an update to our previous article titled ‘Waiver code to replace LIC99 for Customs Declaration Service’* 

HMRC have announced that from 31 January 2024, universal waiver code 999L can no longer be used for CDS import declarations. The code replaced ‘LIC99’ as a broad, ‘catch-all’ waiver code upon the transition from CHIEF to CDS and is used to denote that a licence is not applicable to import certain controlled and restricted goods. As a result, the code has been open to misuse, and this may explain why HMRC are now looking to withdraw it.

HMRC have published a list of national waiver codes and EU waiver codes which should be used in replacement of the universal waiver code. As it stands, there are 10 national document codes in the UK Trade Tariff, and the full list of national codes can be found here.  

The EU waiver codes will be applicable to ex-heading goods i.e. goods that may not have documentary or licensing requirements. Please find the full list of EU waiver codes here

Use of code 999L after 31 January 2024 will result in the customs declaration being rejected and potential delays at the border. Therefore, it is important that parties completing declarations e.g. brokers are aware of the changes and ensure to apply the correct waiver codes to avoid disruption to supply chains. It is also necessary for traders to instruct brokers on whether any licensing obligations may apply to their goods.

For more information, please contact Ian Worth or your usual Crowe contact. 

New EU guidance in respect of sanctions on Russia 

The EU published additional guidance on 3 October 2023 in respect of the prohibitions on imports of iron and steel products from Russia, which came into effect on 30 September 2023. 

Goods manufactured before 23 June 2023 are out of scope

The updated guidance confirms that the prohibitions apply only to iron and steel products listed in Annex XVII which were processed in a third country. Notably, the guidance highlights that the prohibitions will apply to imports of iron and steel products (which contain specified Russian originating inputs) which were manufactured or produced after 23 June 2023. This provides clarification on the position for existing inventories i.e. if goods (which contain specified Russian originating inputs) were manufactured or produced before 23 June 2023, they do not fall within the scope of the sanctions and prohibitions upon import do not apply. 

This is an important clarification made by the EU Commission, however, we recognise that the guidance does not explicitly state how this should be evidenced. We consider that details relating to the purchase date, manufacturing / production date and traceability of stock will be useful in supporting this position. The cut-off date has been implemented on the basis that 23 June 2023 marks the date in which the requirement to prove origin of the iron and steel inputs was introduced in EU law. Where necessary, we recommend investigating existing inventories further as this will simplify the evidential burden if it can be demonstrated that the imported goods were produced or manufactured prior to the cut-off date. 

Alternative evidence

In terms of evidential requirements, the EU guidance highlights that the Mill-Test Certificate is not the only document that may be accepted as evidence of the origin of the inputs. Specifically, the guidance states that the MTC ‘can be regarded as sufficient evidence’, but also recognises that the origin of the inputs ‘may be established through other means’. The examples provided include supplier’s declarations, invoices and delivery notes. Notably, the relevant National Competent Authorities (NCAs) have the authority to decide what evidence will be deemed acceptable and we have seen some EU Member States publish specific guidance in this respect. Whilst the MTC appears to be the gold-standard, we recommend consulting specific Member State guidance to understand alternative types of evidence that may be accepted in replacement of the MTC. 

In respect of declaration requirements, the guidance states that document code ‘Y824’ should be included on the customs declaration and this indicates that evidence has been provided on the country of origin of the iron and steel inputs. If applicable, the customer in the EU will instruct the customs agent to declare this code on the declaration. As such, businesses will need to provide necessary assurances e.g. a declaration on the invoice stating that after exercising due diligence, the imported product does not contain Russian steel or iron. 

Non-preferential origin of inputs

The guidance usefully clarifies the extent to which evidence must be provided for each operation in the supply chain. Evidence must be provided for non-Russian originating inputs which are listed in Annex XVII when used in the production of the finished product that is imported into the EU. However, if these inputs originate in a country other than Russia, on the basis of EU non-preferential rules of origin, then evidence is not required for the constituent elements that were used to produce this input. For example, if screws are manufactured from wire, the origin of the wire must be determined, however, the origin of inputs for manufacture of the wire is not required, providing the wire is not of Russian (non-preferential) origin. We recognise that this simplifies the burden of providing evidence for each operational process in the supply chain and recommend that businesses verify this point. 

We await further guidance on the UK’s sanction measures and will update as soon as possible. For more guidance on the impact of the sanctions, please contact Ian Worth or your usual Crowe contact.

Preparing for a customs compliance audit

Customs compliance audits take place following imports and can cover up to three years of historical import activity. Since Brexit, HMRC have applied a light touch to their audit program, but we are now seeing increasing signs of customs audit activity as UK businesses and HMRC evolve in a post-Brexit environment. In a typical customs audit, an importer must be able to demonstrate compliance with the customs regulations governed by UK law and non-compliance can yield penalties, withdrawal of customs authorisations and duty demands. The nature of customs audits vary – HMRC may conduct a general investigation into customs operations or show an interest in auditing the activities for a particular area of compliance.

Common areas which are explored during an audit

  1. Import and export trading operations.
  2. Tariff classification procedures.
  3. Customs valuation of goods.
  4. Origin reviews (including use of preferential trade agreements).
  5. Customs documentation, record keeping and audit trails.
  6. Special procedures, reliefs and authorisations.
  7. Customs broker management and representation.
  8. Duty management e.g. Duty Deferment Accounts and Postponed Import VAT Accounting.
  9. Internal management of customs processes and operations.
  10. Review of customs data.

It is important to note that HMRC audits are not random or routine – they are targeted at importers where HMRC already believe they will uncover evidence of incorrect declarations. HMRC select importers by analysing the data taken directly from declarations made by, or on behalf of the importer. That very same data is available to importers, enabling early detection of errors and swift remedial action before it becomes the subject of an intrusive customs audit.

When HMRC initiate a customs audit, it can be a good trigger to call Crowe’s customs team to help prepare. We can assist the business by using our Customs-ID software to analyse import data and by conducting a “mock” audit which can help familiarise the business with the audit process and highlight any key risk areas and suggested improvements.

We are committed to ensuring that the business feels prepared for the audit and that a positive outcome is reached.

For more information, please speak with Ian Worth, or your usual Crowe contact.

New UK sanctions on imports of iron and steel from Russia

The UK Government published guidance last week confirming that imports of iron and steel products will be prohibited from 30 September 2023, if their manufacture includes materials from Russia. From this date, UK importers will have to provide evidence that the inputs of such products did not originate in Russia, in line with a similar EU measure to be introduced on the same date.

Goods in scope

The iron and steel products in scope for the prohibition have been outlined in the guidance and broadly align to the commodity codes in scope for the EU regulation. As well as raw materials and semi-finished products, Commodity Code Headings 7323, 7324 and 7326, which encompass some household goods, are included in the list. The measure is therefore likely to impact a significant number of UK importers.

As an example, consider steel slabs which are exported from Russia to China, and processed into hot rolled coils of alloy steel, taking on Chinese origin in the process. Or stainless steel ingots which are imported in China to make cookware and bakeware e.g. pots and pans, also taking on Chinese origin. The import into the UK of such products will be prohibited from 30 September.

Evidential requirements

In terms of the evidential requirements, the guidance states that traders ‘should be prepared to have documentation’ which provides evidence of the supply chain e.g. the country and facility where processing has taken place. The guidance lists the Mill Test Certificate (MTC) as evidence that UK importers must provide, but notably highlights that the evidence is not limited to just the MTC. In some cases, the customs authorities may also require further evidence e.g. commercial invoices and bills of lading.

The guidance advises that all parts of the supply chain for third country processed iron and steel imports to the UK undertake the necessary due diligence to ensure that sanctions are not being circumvented either directly or indirectly. It should be noted that not complying with the sanctions could constitute one of a number of criminal offences.

Actions to take

To prepare for implementation of the measure, businesses should identify whether its imported goods fall under the scope of the measure, and if necessary, review the classification of its imported goods for accuracy. Businesses are strongly advised to then consider how to meet the evidential requirements for proving that their imported goods which are in scope of the measure do not contain Russian inputs.

To discuss the above in more detail, please contact Ian Worth or your usual Crowe contact.

UK publishes ‘final’ Border Target Operating Model

The UK Government has this week published the ‘final’ Border Target Operating Model (BTOM), following the ‘draft’ BTOM published for feedback in April of this year. As outlined in the model, the UK is set to delay the implementation of post-Brexit border checks on EU imports of food and fresh produce for the fifth time since the UK left the European Union. 

The requirement for health certification for the import of medium-risk goods such as meats and cheeses has been pushed back from the end of October 2023 to the end of January 2024, whilst documentary and identity checks at the border, as well as bringing the Rest of the World (ROW) regime in line with the new model, has now been pushed back three months to the end of April 2024.

While some businesses will welcome the delays, they will prove frustrating for businesses who have spent time and money preparing for the implementation of border controls for nearly three years since Brexit.

Why have the checks been delayed?

Government officials have downplayed the extent that inflationary pressures have had on the potential decision to delay border controls on sanitary and phytosanitary goods from the EU. However, it has been widely reported that there have been widespread fears in the business community that the newly unveiled border plans would create considerable increases in costs for importers and add further fuel to the fire that is Britain’s runaway food inflation. 

With UK inflation at 6.8% in July, and food inflation at 14.9%, the estimated additional costs of £400 million due to the Border Target Operating Model could cause serious supply constraints for a country that imports around 30% of its food from the EU. EU businesses may reduce the level of food products they choose to export to the UK, exacerbating pricing pressures on UK consumers. 

Questions also remain over the readiness of traders for the changes at the UK border, outlined in the draft BTOM earlier this year. Can anyone blame businesses for delaying the implementation of expensive processes and requirements when there is no certainty that the deadline set by those implementing the rules will be upheld?

Why do these checks need to be introduced?

Membership of the Single Market required the UK to share a biosecurity regime with the EU. Brexit has meant that the UK is ‘free’ to implement its own biosecurity policies and arrangements. The UKs exit from the EU was seen by some as an opportunity to tighten the UKs biosecurity measures, eliminate the ‘weakest link’ issue, whereby certain EU countries were regarded as soft touch entry points, and reduce political reporting pressures in instances where member states were reluctant to notify on the grounds that reporting a disease would affect a country’s trade interests. 

However, the UKs border is arguably now in a far weaker position than it ever was when subject to the EUs rules, still relying by proxy on the EU to maintain its biosecurity on imported goods. 

The British Veterinary Association has, in light of the most recent delay, stated that further delays to border controls on sanitary and phytosanitary products puts the UK’s biosecurity at serious risk of imported diseases, such as African Swine Fever.

The key benefit to biosecurity as a result of leaving the EU was stated to be able to respond more quickly to newly-identified risks to the country’s biosecurity, whereas the situation we are in leaves businesses and consumers in limbo, whilst also leaving the UK unable to identify and respond to potential risks.

Having left the EU, no longer being bound by the same EU standards on SPS measures was also said to allow the UK to diverge from EU rules in this regard to support new Free Trade Agreements. However, little appetite exists for such divergence, and public attitudes in this regard are highly sceptical, with a reduction in foods and safety standard being the primary reason for opposing new agreements.  

What does this mean for UK businesses and consumers?

A House of Lords Select Committee publication, “Brexit: plant and animal biosecurity”, published in 2018 stated “the need to facilitate trade post-Brexit must not be allowed to compromise the UK’s biosecurity.” - the situation as it stands weighs up the cost of our food with the safety and standards of our food. 

While uncertainly will remain on whether the new deadlines announced will ‘stick’, or whether they may prove to be yet another ‘false dawn’, businesses are still advised to ensure they are prepared for when these controls are eventually implemented.

If you have any questions on how you can be best prepared or informed on border controls and the impact on your business, please contact Ian Worth or your usual Crowe contact. 

New package of EU sanctions on Russia

A range of additional EU sanctions measures were recently adopted by the Council of the European Union and one measure in particular is likely to impact a significant number of UK exporters and EU importers.

From 30 September 2023, EU importers of iron and steel products that were processed in a third country must provide evidence that the inputs used did not originate in Russia. This will affect UK manufacturers as well as retailers and distributors selling finished products to EU customers.

The Regulations require that the evidence must be provided at the point of import into the EU and failure to do so may result in delays or the goods being seized at the border. Acceptable evidence to prove that the products do not include Russian inputs must be in the form of a Mill-Test Certificate (MTC), identifying the facility in which the processing is carried out and the types of processing operations that occur.

This poses a significant challenge for UK businesses who export goods in scope to the EU, and an important first step for traders is to therefore conduct an impact assessment and identify which goods fall within the scope of the sanctions. Reviewing Management Support System (MSS) export data will help shed light on this and we can support the business in reviewing commodity codes accordingly. 

Affected traders will then have to ensure that the relevant information is provided to the importer in the EU or ensure to present the certificate on its own account where appropriate. Businesses will need to engage with suppliers to understand if the goods being exported to the EU incorporate materials of Russian origin, requesting the appropriate documents which corroborate composition of the products. 

It will be important to implement the necessary processes to comply with the new Regulations and this is likely to see cross-collaboration and input from a number of divisions across the business. Customers in the EU will be keen to gain assurance that their suppliers in the UK are able to provide the required MTCs.

It should be noted that the UK will also implement a similar measure for imports on the same date, with some differences on the goods impacted, and details of the evidence requirements remain unclear at this stage.

CBAM crossover

Notably, the transitional measures for the EU Carbon Border Adjustment Mechanism (CBAM) also come into effect from 1 October 2023 (please find our full article on CBAM below) and many products fall under both the Sanctions and CBAM measures.

The CBAM will require EU importers to submit quarterly reports to the EU Commission detailing the imported goods and declaring direct and indirect emissions. UK businesses who export carbon intensive goods which fall within the scope of CBAM will be tasked with supplying the EU importer with the required information, presenting further compliance burdens.

With the effective date fast approaching, it is important that businesses prioritise discussions around the measures and we can assist in analysing customs data to identify products in scope and advise on the key measures that should be implemented to ensure adherence to Regulations. 

For more guidance on the impact of the Sanctions and/or CBAM on UK exports to the EU, please contact Ian Worth or your usual Crowe contact.

HMRC announce new phased approach to CDS exports migration

On 23 August 2023, HMRC announced the implementation of a new phased approach for the transition to the Customs Declaration Service (CDS) from the Customs Handling of Import and Export Freight (CHIEF) system.

As part of this two-stage phasing, HMRC and its software developers will firstly assist ‘high-volume declarants’ in migrating to CDS for exports by 30 November 2023. After this has been completed, all remaining businesses will be expected to migrate by 30 March 2024. This is a change to the previous schedule which anticipated all exporters to be using CDS from 30 November 2023. 

This new approach comes after previous delays in the CDS export migration, and the phasing process is expected to allow HMRC to be able to focus on addressing existing functionality issues faced by businesses. The selected high-volume declarations will be contacted by HMRC or their software developer in September. 

After similar delays, the transition to CDS from CHIEF for import declarations was eventually completed last year. Traders are advised to prepare for the new deadline by ensuring they are prepared for the data requirements for CDS export declarations. To discuss this in more detail, please contact Ian Worth or your usual Crowe contact.

Who is crashing your customs declarations?

Some of you may have watched a documentary on the BBC called “Why ships crash”. The documentary goes into some detail about the Ever Given’s blockage of the Suez Canal, and resultant consequences of a six-day blockage of one of the world’s most important trade routes.

It’s eye-opening to understand that the procession of cargo ships through the Suez Canal are normally separated by only a 10-minute gap between ships, and that at one point during the blockage, over 300 ships were waiting to enter the canal. That’s somewhere in the region of 4,500,000 containers, containing finished goods destined for retail, as well as components and materials necessary to keep the wheels of industry turning.

Just-in-time supply chains (JIT) have become commonplace, whereby manufacturers hold little more than a few days of material stocks, with frequent replenishment keeping the production lines operating. Over the last five or six decades, as more manufacturing has moved to overseas low-cost economies, UK businesses have come to rely on finely tuned supply chains – a container ship from the Far East can take anything from 25 to 60 days to reach the UK, so JIT strategies always carry a risk of unpredictability, and in many cases severe penalties on suppliers for failing to meet delivery targets.


In international trade, the responsibilities of the buyer and seller are agreed by Incoterms® - a range of international commerce terms which determine the responsibilities of each party for the transportation of goods. These cover loading at the factory, transport to the port, clearance for export, loading on a ship (or aircraft), international freight, unloading, presentation to Customs and final delivery to destination. There are, however, elements of a supply chain which are outside the control of either the buyer or the seller. Once the container is loaded onto the ship, the Captain of the ship is then responsible for moving his ship from the port of export to the port of destination, however, there are elements of that journey where he must rely on a specialist Pilot to take over the navigation of particularly challenging parts of the journey. This would include the initial exit from the harbour, docking at the destination harbour as well as navigation of the Suez Canal.

While unpredictable events such as the Ever Given’s crash blocking the Suez Canal, or a hurricane at sea are insurable, there are still other events in international supply chains which require specialist input, akin to that of a ship’s Pilot. Completion and submission of an import customs declaration is a legal requirement, which determines the amount of duty and VAT to be paid on a shipment. The responsibility for arranging this is covered by Incoterms®, but the practicality of appointing and instructing a specialist customs clearance agent is at best, an imprecise science. A ship’s Captain would not hand over control of his ship to a pilot without ensuring all the necessary resources and information are available, so why would an importer expect a customs agent to complete his customs declaration without adequate instruction?

Yet, it happens all too frequently, that customs agents, perhaps under pressure to maintain the JIT ideology are ill-informed by their customer, the importer. In extreme cases, customs agents are left to construct a customs declaration based only on the documentation accompanying a shipment, which itself is often inadequate.

In the same way that a ship’s Captain is responsible for his ship, the obligation to submit a legal customs declaration, accurately describing the goods, their value and origin, is the responsibility of the importer. His customs agent should possess the knowledge, experience and software needed to represent the importer and make a compliant declaration on his behalf but can only do so if adequately instructed. Customs authorities rarely pursue an agent when a declaration is found to be incorrect and have little sympathy for importers who cannot provide evidence that their instruction to the agent was complete and accurate.

The BBC documentary explained that the Ever Given crashed because a Pilot had misread the prevailing weather conditions and had increased the ship’s speed too much to be able to correct its course. The vessel was eventually refloated with help from a full moon, creating a high tide. The consequences of “crashing” a customs declaration may not be quite so disastrous, but crashes are entirely avoidable by issuing customs clearance agents with detailed instructions, in writing, and then checking after the event to ensure that those instructions were correctly followed.

Customs audits

HMRC conduct audits on customs entries, often as long as three years after the import has taken place. These are not routine or random audits, they are targeted – HMRC does not have the resources available for non-targeted audits, so they analyse the data declared over a period of time in order to identify any anomalies which might suggest that customs duty may have been underpaid. A JIT supply chain strategy almost always involves frequent imports, so a small error in the customs declaration can quickly multiply into a huge liability – and a full moon will not help.

Data analytics

Thankfully, UK importers can access the same data used by HMRC to select their audit targets. Better still, they can receive monthly reports direct from HMRC, through which they can identify any errors being made by their customs clearance agents and take corrective action before the problem spirals into a huge debt, and possibly penalties. The monthly data reports are in coded format, but Crowe’s Customs-ID analytics program can quickly crunch thousands of lines of data and identify declarations where further investigation and corrective action may be necessary.

The key message for UK importers looking to avoid crashing their customs declarations is to issue detailed clearance instructions to customs agents, then to check that those instructions have been followed. We know that many companies don’t feel confident in determining commodity codes or applying rules of origin, but we can provide template clearance instructions and deliver training to help keep UK importers compliant.

There is then also the question of what happens after the customs declaration has been submitted. One such example is import VAT. The business will have paid import VAT that it will want to reclaim and we often see a disconnect or a breakdown in processes meaning that the people responsible for preparing the VAT return do not know there is import VAT to reclaim or do not know how to access the documentation needed to enable the reclaim.

For further information please contact Ian Worth, your usual Crowe contact.

UK Alcohol Duty Reform

On 1 August 2023, the new structure of duty rates for alcohol products takes effect, as well as two new reliefs. The changes are being dubbed as the biggest reform to UK alcohol duties for more than 140 years. 

The new legislation will restructure and standardise alcohol duty rates, with all alcohol products across all categories paying the same duty rates in line with volume of pure alcohol per litre.

Under the ‘new’ structure, £0.42 of duty will be payable for a bottle of beer, compared to £0.38 under the ‘old’ regime, whilst the duty on a measure of gin will increase from £0.29 to £0.31. You can see more examples of the differences in rates on our presentation which can be found here.

The government is also introducing new reliefs to support businesses. These come in the form of draught relief and small producer relief, providing reduced rates for products designed to served in draught and for producers whose annual production contains less 4,500 hectolitres of pure alcohol. 

For more information, please speak with Ian Worth, or your usual Crowe contact. 

Removal of XI EORI numbers 

HMRC have contacted businesses over the past few months in order to verify their eligibility for an XI EORI number. In order to qualify, businesses must either have a Permanent Establishment (PE) in Northern Ireland (NI) or undertake a specific customs activity that warrants the retention of an XI EORI.

The deadline for businesses to respond to HMRC’s enquiry passed last month. From Monday 31 July 2023, HMRC will invalidate XI EORIs across a three-week period in August. During this timeframe, HMRC will assess the impact of the removal of XI EORIs to minimise any disruption to trade operations and businesses can also contact HMRC directly on 0300 322 9434, if any emergency issues arise. 

In the event that an XI EORI is invalidated, and a need is for one is subsequently identified, the business can re-apply and if accepted, the XI EORI will be restored within five working days. 

Notably, GB businesses can continue to move goods into NI without an XI EORI, on the basis that an indirect representative established in NI or the EU, such as the Trader Support Service, (TSS) is used. 

If the Consignor’s/Consignee’s XI EORI is invalidated, they are instead able to add their company name and address on the declaration. TSS will bring in new functionality in due course to allow this to be automatically provided on the system. 

For further information please contact Ian Worth, or your usual Crowe contact. 

Plant pots – a customs classification conundrum

Does a plant pot serve a useful function or is it simply for ornamental purposes? This is a question that importers of such products must confront when it comes to customs classification, often said to be the ‘starting point’ of customs compliance.

The classification of a product drives the conventional duty rate and any additional duties, whether certain control measures apply, Rules of Origin, quotas, and duty suspensions. All of this is derived from the ‘commodity code’ which a trader assigns to their product and is submitted on the customs declaration. For export from the UK, a code to eight digits is required, primarily for statistical purposes, and it is therefore the 10-digit commodity code declared upon import, driving the duty payable, which is of greater importance.

The UK Global Tariff includes approximately 20,000 such codes and it is the obligation of the importer to arrive at the single correct code for their product and ensure that it is applied on the (legal) customs declaration made in their name.

The classification process

In order to accurately classify a product, an importer must know exactly what it is, what it is made of, what it is for, and often, how it is made and how it is presented to customs. Missing just one of these pieces of information may mean that you cannot accurately classify the product.

The process of classification is governed by the ‘General Interpretative Rules’ as set out by the World Customs Organisation (WCO) – understanding these rules and how they apply to apply to the product being imported is crucial to being compliant. In addition to considering these rules, accurate classification will also often entail consulting the Harmonised System Explanatory Notes, HMRC guidance and regulations, Advance Tariff Rulings, and WCO opinions and legal decisions.

Who classifies your goods?

When first speaking to businesses, we often find that they do not have a formal classification procedure in place. It is not uncommon for such businesses to rely on their customs agent or their supplier for the classification of their products and assume that to be correct. While input from a customs agent may sometimes be helpful, and information on the product characteristics provided by a supplier is essential, relying solely on third parties for product classification is a risky business.

In a customs audit, HMRC will always review the classification and will often want to understand the process of how it was arrived at, by whom, and any control and validation measures in place. The emphasis being that it is the importer’s legal responsibility to get the classification right.

Plant pots – ornamental or useful?

While classification of some products can be very straightforward with very little ambiguity, the classification of other products can be complex and contentious. What qualifies as a Christmas decoration, whether Superman is a human being or not, and the exact purpose of ‘cat scratchers’, are all good examples of where customs classification can be controversial.

The latest such example we have come across relates to ceramic plant pots. If classified as ‘statuettes and other ornamental ceramic articles’ (heading 6913), customs duty is payable at a rate of 6%, however, if classified as ‘other ceramic articles’ (heading 6914), the duty rate is instead 0%. The difference in wording is subtle but from a duty perspective, highly significant.

Broadly, heading 6913 (6%) covers goods which are ‘ornamental’ in nature, whilst products with a ‘utility’ function will instead fall under heading 6914 (0%). This prompts all manner of questions in the context of ceramic plant pots; what would make a plant pot purely ornamental, and what would define it as providing a useful function? What if it is both ornamental and providing a utility? Of what relevance is the painting, glazing and decoration of the pot? What other features may be pertinent?

Opportunity or exposure?

In examples such as this one, getting the classification wrong will have led to either overpayment or underpayment of customs duty. In the UK, HMRC have three years from the date of import to raise a duty demand, but importers also have three years from the date of import to apply for a duty reclaim.

Having such a broad window for both underpayments and overpayments can mean that the sums involved can often be highly significant. Importers who have been erroneously classifying their plant pots as ornamental and paying 6% duty may have a substantial reclaim opportunity, whereas importers who have not been paying duty on their plant pots in error may have a significant looming liability.

As ever, the devil will be in the detail, and an analysis of the specific pots and compliance position for regular importers of such products is highly advisable.


Our experience at Crowe shows that such “borderline” cases are not uncommon, and customs authorities can often be as bamboozled as traders by the nuances of certain areas of the customs tariff. When faced with such problematic classifications, traders are advised to seek expert support to ensure they do not fall foul of their compliance obligations. A review of customs classifications used by importers can often lead to a substantial duty reclaim, as well as generating savings for future imports.

To discuss reviewing the classification of your products, please contact Ian Worth or your usual Crowe contact.

Carbon Border Adjustment Mechanism 


The European Parliament and Council of Europe signed the final regulation in respect of the Carbon Border Adjustment Mechanism (CBAM) last month. The mechanism has been introduced to prevent carbon leakage and a border tax will be payable on embedded carbon imported into the EU. The CBAM transitional period will take effect from 1 October 2023, before becoming fully operational in 2026. This will have a significant impact on UK exporters who ship carbon intensive goods to the EU and it is important that affected businesses are aware of, and adhere to, the compliance requirements of the CBAM. 

Sectors in scope

The mechanism will initially apply to imports of goods classified under the following sectors.

  • Steel and iron
  • Aluminium 
  • Cement 
  • Fertilisers
  • Hydrogen 
  • Electricity

These sectors have been identified on the basis that they pose the greatest carbon leakage risk. Further products will be added to the list over the transitional period e.g. chemicals and polymers and all products under the EU Emissions Trading System (ETS) are expected to be included by 2030. There are notable exceptions in which CBAM will not apply e.g. goods of negligible value (where intrinsic value is less than €150 per consignment) and goods which are to be moved or used in the context of military activities. 

Requirements for businesses  

From 1 October 2023, affected importers will need to report the following on a quarterly basis to an EU CBAM authority: 

  • quantities and details of goods imported e.g. country of origin, production site 
  • details in respect of direct and indirect emissions 
  • the carbon price due in the country origin if applicable. 

Once the scheme becomes fully operational in 2026, additional requirements will come into force such as the following: 

  • obtaining an authorisation to import CBAM goods (‘authorised declarant’)
  • completing annual declarations of goods imported into the EU in the preceding year
  • CBAM certificates. 

It is expected that there will be a centralised platform in which importers will be able to buy certificates, which will be supervised and administered by the EU Commission. 

Actions for UK exporters

With the transitional phase commencing in a few months, it is critical that UK exporters start preparing now. An important first step is to conduct an impact assessment and identify which export goods fall within the scope of CBAM in the EU. Reviewing Management Support System (MSS) export data will help shed light on this and we can support the business in reviewing commodity codes and other key metrics such as volumes of exports and relevant destinations. EU importers will then need to reach out to their suppliers and key players within the supply chain to obtain details about the embedded emissions to complete their quarterly declarations. There will likely be cross-collaboration between divisions within a business to ensure adherence to the regulations and it is therefore important to identify key personnel and allocate roles and responsibilities accordingly. Finally, businesses should also think about the reporting processes within the EU and ensure that they are comfortable meeting the new compliance requirements. 

This measure will impact imports into the EU, and will accordingly affect exporters from the UK. It is worth highlighting that the UK is also considering implementing its own version of the CBAM, noting the set up of the UK ETS a couple of years ago. The Government launched a consultation earlier this year to understand the risk of carbon leakage on businesses and we can expect to see more movement on this once the EU CBAM comes into force and provides further insights into how such schemes work in practice. 

For more guidance on the impact of CBAM on UK exports to the EU, please contact Ian Worth or your usual Crowe contact.

MSS and CDS report updates

HMRC have announced changes to the MSS reports that traders receive. Currently, Management Support System (MSS) data is made available to traders by HMRC and provides details of all the customs declarations made in the name of a trader over a given period, including four different reports, covering both imports and exports as required. All reports are sent by HMRC in Excel format and can be requested either as a one-off retrospective report and/or on an ongoing monthly basis, costing £240 per year, per report.

What are the changes?

New CDS reports

  • With the transition from CHIEF to the Customs Declarations Service (CDS), MSS reports will effectively no longer exist, and will be replaced by new CDS reports. The new reports will be “very similar in nature” to the existing reports, however there will be some differences due to the way in which data is now collected in CDS. 
  • It is also expected that at some point in the future, CDS reports will become free of charge for traders wishing to access their customs data, but no official date has been set for when this may take effect.

New columns in existing MSS reports

  • From July 2023 onwards, two new columns will be appearing in the MSS reports – ‘Preferential Country of Origin’ and ‘Postponed VAT Accounting’.
  • It was made aware recently that when declarants were claiming preferential tariffs and entering a preferential country of origin, this was overriding the need to enter the ‘standard’ country of origin. Ultimately, this was causing the ‘Country of Origin’ data to be missing from entry lines where preference had been claimed.
  • Similarly, when traders were using PVA previously, there was no indication of this in the MSS reports. Instead, the ‘VAT Paid’ data would display a blank cell. We have seen cases where traders could not tell whether PVA had been applied or whether an entry line had been zero-rated for VAT.
  • These issues were causing confusion, but it should now be much easier to understand with these new column additions.

‘VAT Value’ error fix

  • In CDS, the ‘VAT Value’ data was not including customs duty, causing figures to not be reconciling correctly for traders. HMRC have informed us that a fix has now been implemented and should be displaying the correct figures going forward.

Interpreting the data

MSS/CDS data is an extremely valuable resource for gaining key insights into your customs duty exposure and compliance profile. While obtaining the reports is recommended to any trader, interpreting the data, and identifying exactly where risks and opportunities are present is a crucial step which some businesses can overlook.

Our Customs team can provide support with obtaining your MSS/CDS data, and using our Customs-ID analytics tool, we can deliver a tailored analysis along with suggested next steps and recommendations based on our findings. 

To discuss this in more detail, please contact Ian Worth or your usual Crowe contact.

Tariff Rate Quotas (TRQ) updates 

The UK Trade Remedies Authority (UKTRA) was established following Brexit in order to protect UK industries from unfair import practices. The measures usually take the form of additional duties e.g. anti-dumping duties. 

Safeguarding measures are “emergency" actions taken by a government in response to increased imports of particular products, where the imports have caused or threaten to cause serious injury to domestic industry. For example, steel safeguard measures act to temporarily restrict imports of certain steel products through the application of “Tariff Rate Quotas” which allows a certain tonnage of goods to be imported tariff-free until the quota is exhausted for a defined period e.g. steel products imported after the quota is exhausted is subject to additional duty of 25%.

More recently, a TRQ has been initiated for certain steel products moved from Great Britain into Northern Ireland. Specifically, GB-NI movements of UK origin category 7 and 17 steel products will qualify as a tariff-free movement which will protect the flow of steel into NI. Notably, movements of products under the aforementioned categories have faced challenges since last year following EU changes to the functioning of quotas. Category 7 steel products describe non-alloy and other alloy quarto plates and category 17 products cover angles, shapes and sections of iron or non-alloy steel. 

For further information about trade measures in the UK, please contact Ian Worth or your usual Crowe contact.

Duty suspensions application window is now open!

The Department for Business and Trade has opened the window for applications for duty suspensions, offering businesses an opportunity to reduce import costs and boost competitiveness. The current window is open for a limited period until Sunday 6 August 2023.

Duty suspensions, also known as tariff suspensions, act to reduce or eliminate customs duties on specific imported goods. The primary aim of these suspensions is to help UK businesses remain competitive in the global marketplace by providing temporary (usually two years) relief from customs duties on raw materials or components that are not available domestically.

To qualify for a duty suspension, the applicant must meet the following criteria:

  • be based in the UK
  • be able to demonstrate a lack of UK or crown dependency supply of the requested commodity
  • provide evidence and calculation of the duty impact the suspension would have for your business.

By reducing or eliminating customs duty, businesses can reduce import costs, enhance competitiveness in international markets and pass on savings to their customers. 

If you are currently being impacted by customs duty on imports and would like to explore whether a duty suspension application may be viable for your products, please contact Ian Worth or your usual Crowe contact. 

Developing Countries Trading Scheme (DCTS)

On 16 August 2022, the then Secretary of State for International Trade, Anne-Marie Trevelyan, announced plans to launch the “Developing Countries Trading Scheme”, also known as “DCTS”, with the scheme designed to succeed the existing UK Generalised Scheme of Preferences (GSP) which was first introduced post-Brexit, largely based on the equivalent EU scheme which preceded it.

In the initial announcement, DCTS was set to become live in early 2023, and after a short delay, will now come into effect on 19 June 2023, at which point the UK GSP will cease to have effect.

What is the DCTS and how will it differ from the existing UK GSP?

As with GSP, DCTS will allow for developing countries to benefit from non-reciprocal trade preferences. By offering reduced or eliminated tariffs for certain exports to the UK, DCTS will assist in enhancing the economic growth of developing countries participating in the scheme. 

Like its predecessor UK GSP, DCTS comprises of three tiers, each of which grant access to different levels of trade benefits, as below:

  • Standard Preferences (SP) – previously General Framework
  • Enhanced Preferences (EP) – previously Enhanced Framework
  • Comprehensive Preferences (CP) – previously Least Developed Countries (LDC) Framework

Simplified Rules of Origin

One of the main upgrades featuring in DCTS are the simplified Rules of Origin, which will primarily apply for LDCs. The Government have set out plans to liberalise product-specific rules by removing unnecessary complexity from the existing rules and making them easier to comprehend. Additionally, there will also be greater opportunities available for DCTS countries to cumulate with one another, increasing the scope for materials from different DCTS countries to be considered as ‘originating’ when being used in the production of final products.

Tariff preferences

Tariff preference is one of the core benefits available in DCTS and the Government has pledged to lower or remove tariffs on over 150 additional products within the Enhanced Preferences tier. Fifteen seasonal tariffs (mainly consisting of fruit and vegetables) have also been simplified, now offering nil duty throughout the year for beneficiaries of Enhanced Preferences. Meanwhile within the Standard Preferences tier, all tariffs currently at 2% or below, referred to as ‘nuisance tariffs’ have been reduced to 0%, which covers 33 different commodity codes. 

Goods ‘graduation’ removes access to tariff preferences in scenarios where a country has become exceedingly competitive in the export of particular products. In DCTS, the only tier subject to goods graduation is Standard Preferences, of which only two countries currently belong, India and Indonesia.

DCTS is also allowing all economically vulnerable lower income countries and lower-middle income countries to access Enhanced Preferences. In total, eight countries are moving into this category, and it is expected in the coming years that more countries will follow suit. The Government will maintain its power to remove benefits for countries with inadequate human rights and labour rights records and there will now also be added scrutiny on countries’ anti-corruption and climate change policies.


One country which has been subject to interest is Vietnam. In December 2020, the UK and Vietnam signed a Free Trade Agreement (FTA), and since then Vietnam has been able to access the benefits of both the FTA and UK GSP. 

When DCTS comes into force, Vietnam will no longer be a beneficiary country and traders will therefore only be able to access trade preferences for Vietnamese goods via the FTA.

Evidence requirements and preparation

Currently under UK GSP, traders are required to hold either a valid GSP Form A certificate or an Origin Declaration issued by the supplier to prove that the goods qualify as having GSP origin status. These are types of evidence which are issued in the country of export and valid evidence must be held by the importer when claiming preferential tariffs. 

Under DCTS, the format of the Form A certificate is expected to remain the same, though the wording of the origin declaration however is subject to change to instead include reference to the DCTS. 

For goods which are eligible for tariff preferences under DCTS, UK GSP proof of origin will be accepted as valid, if the proof of origin was issued on or before 31 December 2023. This grace period allows traders to continue using UK GSP origin declarations for the remainder of 2023. This will also apply to retrospective DCTS preference claims, within the specified period.

Likewise, for goods which are currently under the customs warehousing procedure, or for goods which will be entering a customs warehouse before 31 December 2023, DCTS preference can be claimed upon release to free circulation using UK GSP proof of origin. 

Act now!

If you are a UK business currently importing from GSP countries, you should consider how these changes may impact your business, and most importantly, ensure your suppliers are aware of the proposed changes and are ready to provide you with valid evidence of origin under the new scheme going forward.

For more information or to discuss these changes further, please contact Ian Worth or your usual Crowe contact. 

Important Windsor Framework updates announced 

The Windsor Framework was agreed earlier this year and sets out a new way forward in The UK’s relationship with the European Union (EU) with respect to Northern Ireland. The framework will in effect replace the Northern Ireland Protocol, which has been the source of much disagreement between the UK and the EU since it came into force in 2021. HMRC have recently published updates and guidance in respect of some of the measures that are due to be introduced this year as part of the framework, covering the Duty Reimbursement Scheme and the UK Internal Market Scheme.

Duty Reimbursement Scheme 

With effect from 30 June 2023, traders will be able to claim a reimbursement of EU customs duties paid on eligible movements of goods into Northern Ireland which were deemed ‘at risk’ at the time of the movement. The reimbursement will only apply if it can be demonstrated that the goods were sold or used outside of the EU. For example, goods which were consumed or permanently installed in Northern Ireland could qualify for reimbursement under the scheme. 

If there was a subsequent onward movement e.g. to Great Britain or an export to a non-EU country, this could also qualify for the reimbursement. Notably, reimbursement claims can be backdated to 1 January 2021.

Suitable evidence that the goods were not sold or used in the EU must be held, such as: sales invoices, packing lists, transport documentation, export declarations (where there was an onward movement of the goods). The scheme can also grant duty relief for goods which were further processed in Northern Ireland, but businesses should provide additional evidence such as inputs and outputs and details of processing operations to corroborate the claim for relief. 

Noting that the scheme is due to come into effect at the end of this month, we can expect further details to be published in the coming weeks. However, it is advisable that businesses start preparing now, reviewing movements of goods into Northern Ireland from 2021 to identify cases where a claim may be possible. Importantly, the goods must have been declared ‘at risk’ with EU customs duties paid, and not sold or used in the EU. We can assist businesses in reviewing the relevant import profile, identifying the movements that may be in scope for the relief, collating the required evidence and preparing and submitting duty reclaims. 

UK Internal Market Scheme 

The UK Internal Market Scheme (UKIMS) will replace the UK Trader Scheme (UKTS) from 30 September 2023. The UKIMS will authorise the movement of goods into Northern Ireland which are deemed ‘not at risk’. Upon delivery of the framework, UKIMS will provide access to the ‘green lane’ which eradicates the requirement for unnecessary paperwork, checks and customs duties for goods that will remain within the UK customs territory. 

The scheme is open for registration and traders must ensure to be registered for UKIMS from 30 September 2023. Prior to this date, traders can still use the UKTS to declare movements into Northern Ireland which are deemed not at risk. However, new eligibility criteria have been proposed for UKIMS based on the wider scope and benefits of the scheme and as such, businesses will need to provide additional information. 

HMRC will contact traders who have a current UKTS authorisation to sign up for UKIMS, but it is advised for new users to apply for UKIMS as soon as possible, given that HMRC will not have existing details on record. For existing users of UKTS, HMRC have highlighted that registering for UKIMS before 31 July 2023 will ensure that they can prioritise the business’ enrolment onto the scheme. It is worth noting that traders who cannot move goods under UKIMS, could still potentially benefit from duty relief via the reimbursement scheme mentioned above. 

Businesses will need to apply for UKIMS online via their Government Gateway account. We can assist businesses in collating the required information and submitting the application within the priority timeframes proposed by HMRC, to ensure that the business is set up to benefit from the ‘green lane’ provisions once this takes full effect. 

To discuss the above in more detail, please contact Ian Worth or your usual Crowe contact.

Advance Valuation Ruling

When goods are imported into the UK, a value for the goods must be declared on the customs declaration. This provides the basis for determining the correct amount of customs duty and import VAT payable (subject to applicable rates) on the imported goods. The UK legislation sets out six methodologies of customs valuation that should be applied, in sequence (apart from Methods 4 and 5 which can be used interchangeably) until a basis for the customs value can be arrived at. Customs valuation can be a complicated process and HMRC have recently launched the Advanced Valuation Ruling Service (AVRS) which will provide importers in the UK legal certainty on their chosen customs valuation method. 

Use of the service is not mandatory, but may provide benefit to traders who are faced with complex valuation scenarios which do not align with the standard six methods of customs valuation. For example, this could include imports where there is no transaction, or where the invoice value may be subject to subsequent adjustment. Traders can apply directly via their Government Gateway account with their GB EORI number or where appointed, agents can make this application on their behalf. As part of the application, you will be asked to identify the method you deem appropriate to value the goods and any supporting documents e.g. commercial invoices, purchase orders and any agreements. 

HMRC have advised a 90-day timeframe for issuing a ruling from the date of application. Once granted, the ruling will be legally binding for three years and it is worth noting that a single ruling can apply for multiple imports, where the contents of the ruling are deemed applicable. Please note that rulings do not apply retrospectively, and as such, will only be applicable to the import in question and any relevant future imports. 

We would recommend the service to clients who are seeking clarity on the valuation of goods in complex scenarios, and we are more than happy to support with the application process. 

To discuss the above in more detail, please contact Ian Worth or your usual Crowe contact.

Draft Border Target Operating Model published for the UK

On 5 April 2023, the UK government published a draft version of the highly anticipated Border “Target Operating Model”. The document sets out a revised model for importing goods into the UK from both the EU and the rest of the world. The new model will play a key role in the government’s 2025 UK Border Strategy, which sets the aim of creating the most effective border in the world.

A key feature of the model relates to the belated introduction of checks and controls on the import of Sanitary and Phytosanitary (SPS) goods from the EU, after several delays in introducing these measures since the UK left the European Union. The model otherwise aims to simplify customs controls and digitise existing customs processes, with detail included on how the Single Trade Window (STW) will amass these new changes under one system, helping in particular to streamline the process of importing SPS goods. 

The model will be implemented in stages, with three key milestones

  • 31 October 2023
    Introduction of health certification on imports of medium risk animal products, plants, plant products and high-risk food and feed of non-animal origin from the EU.
  • 31 January 2024
    Introduction of documentary and risk-based identity and physical checks on medium risk animal products, plants, plant products and high-risk food and feed of non-animal origin from the EU. Existing inspections of high-risk plants and plant products from the EU will move to Border Control Posts.
  • 31 October 2024
    Safety and security declarations for EU imports will come into force. A reduced dataset will be introduced and the UK STW will remove duplication where possible.

For SPS goods, a new ‘risk-based’ approach is outlined, with goods to be categorised as high, medium or low risk, and controls to be determined based on this categorisation, outlined below.

  • High risk: live animals, live aquatic animals and germinal products (with published exceptions for animals with additional safeguards or assurances which present a lower risk) and commodities covered under safeguard measures.
  • Medium risk: raw, chilled, frozen meat, meat products, dairy, animal by-products for use in animal feed, fishery products and aquatic animals imported as products of animal origin.
  • Low risk: processed, shelf-stable products such as composites and certain canned meat products, processed animal by-products and certain fishery products and aquatic animal products from lower risk countries.

The most notable and imminent impact of the model may be for exports of “medium-risk” products from the EU. From the end of October this year, an EU exporter of Italian cheese or Spanish meats will need to obtain an export health certificate for each shipment of goods, with the certificate required to be certified in-person by a vet, on site, before the goods can be exported to the UK. This clearly will create additional administration, cost and complexity in selling and moving such goods from the EU to the UK. There is significant potential for difficulties with shipments of products from multiple suppliers.

The model aims to lessen this impact over time through a focus on technological developments and digitisation, as well as the introduction of Trusted Trader schemes, but such efforts will only soften rather than eliminate the administrative burden on traders.

The model also confirms that safety and security declarations for imports from the EU will be required, albeit with a reduced dataset, from October 2024, adding further to the paperwork requirements for such movements.

The government argues that in comparison to the earlier iteration of the Border Target Operating Model which had been scheduled to be implemented in June of 2022, the new draft acts to reduce the complexity of the UK’s security, biosecurity and public health border controls, reduce the paperwork and certification required, align the requirements and frequency of physical checks to the risk presented, and minimise the need to resubmit data.

The published model is in draft form, with the government advising that they want to test the model with key stakeholders during an engagement period which will run until 15 May 2023, and feedback is sought in four key areas.

  1. Views on the new model for safety and security controls, their impact on businesses and their implementation.
  2. Views on the new model for SPS controls, its impact on biosecurity, animal health and welfare, food safety, businesses, as well as its implementation.
  3. What challenges exist for the private sector in meeting the proposed timeline for introducing the new model.
  4. What further detail is needed in order for businesses to prepare for and implement the new Border Target Operating Model.

Stakeholders are encouraged to provide their feedback on the proposals via the online portal but written responses can also be submitted by email to [email protected] or sent in the post to Borders Group, Cabinet Office, 100 Parliament Street, London SW1A 2BQ.

Further information

Businesses are strongly advised to assess how the model may impact their operations and what steps they can take to prepare for the proposed changes. If you would like to discuss how the model may be impact your business in more detail, please contact Ian Worth or your usual Crowe contact.

UK joins CPTPP

On 31 March 2023, the UK government announced that it had substantially concluded negotiations on the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), with the UK set to become the 12th member, and the first from outside the Indo-Pacific region, joining Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam as participants. Formal signature of the deal is expected in the summer, with full ratification in the UK and member countries then expected later in 2023.

What is the CPTPP?

Formed in 2018, the CPTPP is a free trade agreement (FTA) between 11 countries in the Indo-Pacific region. The UK applied to join the pact in 2021 and is now in the final phase of accession. With a population of 500 million people, the members of CPTPP collectively account for 13% of global GDP and 15% of global trade. With the UK’s accession, the combined GDP of the 12 member countries stands at £11 trillion. The bloc is expected to grow further in the future; Costa Rica, Ecuador and Uruguay have formally applied to join, while Thailand, the Philippines, and South Korea have also expressed an interest in joining.

Membership implications

By joining the pact, the UK will be able to trade effectively with 11 partners under one agreement, and the agreement provides for reduced tariffs on 95% of goods traded between its members. While the UK already holds bilateral trade agreements with nine of the CPTPP member countries, the CPTPP goes above and beyond most of those agreements. Notably, the UK and Malaysia do not currently have a bilateral trade agreement of any kind in place, and the CPTPP will enhance the UK’s access to Malaysian market and boost the value of exports (currently £2.9 billion annually). The current 11 members represent 7% of total UK trade.


The Department for International Trade (DIT) predicts that UK exports to CPTPP member countries will increase to 65% by 2030, equating to an increase of £37 billion. The UK will also be able to benefit from efficient supply chain networks with member countries which should act to ease frictions to cross-border investment. While the overall economic benefit may appear minimal, with UK modelling suggesting that accession will mean a 0.08% uplift to UK GDP, this figure may increase as the size of the bloc grows. UK accession will also increase the institutional strength of CPTPP as it moves from an Asia-Pacific regional framework to a global one, which will increase credibility and may incentivise more applicants, setting a template for accession for non-founding members. As well as removing tariffs, the agreement also includes provisions on services, mobility, digital trade, investments, and customs cooperation which may benefit UK businesses.


A key concern raised by some stakeholders has surrounded whether joining the pact will lead to lower UK food standards. Specifically, there was concern that joining the CPTPP may result in an alignment of standards which would for example allow Canadian hormone-treated beef, currently banned, to enter the UK. However, Prime Minister Rishi Sunak stated last week that the agreement in principle upholds British food safety standards, and it seems that the UK will not change its Sanitary and Phytosanitary (SPS) rules in order to accommodate CPTPP members. 

Concerns have also been raised by environmental campaigners that slashing tariffs on palm oil will incentivise further destruction of forests; Malaysia is the world’s second largest palm oil producer. 

Lastly, joining the pact may be seen to reduce the UK’s ability to re-join the EU in the future, making it difficult to gain access to the EU Customs Union; though the UK could of course simply leave the CPTPP were a better deal ever deemed to be on offer. 

What does accession mean for UK businesses?

For UK businesses who trade in goods internationally, CPTPP membership may provide benefits in two key areas.

1. Tariff elimination

The agreement will benefit UK exporters, with over 99% of goods eligible for zero tariffs, allowing British businesses to be more competitive. There are specific benefits for certain key sectors, with tariffs of around 80% to be eliminated on UK exports of whisky to Malaysia over time, and UK car manufacturers also benefitting from the staged removal of tariffs of 30% on UK exports of cars to Malaysia.

The agreement also removes tariffs on most imported goods, meaning UK businesses and consumers could benefit from better choice, quality, and affordability. The agreement could also lead to cheaper import prices for inputs to manufacturing with tariffs eliminated on a wide range of inputs, including machinery and chemicals.

In comparison to some of the trade agreements already held by the UK, for example the agreement with Vietnam, CPTPP goes further, quicker in terms of tariff elimination. The UK has secured agreement to catch up on the CPTPP members’ tariff staging, which means the UK will benefit from the same reduced tariffs that all other CPTPP members do, despite its later accession.

The agreement will, however, not eliminate all duties, nor will it open up unlimited access for all products, some of which will be subject to tariff rate quotas. In some instances the benefits of existing bilateral FTA deals may be more advantageous than under CPTPP.

2. Rules of Origin

The agreement provides for a single set of Rules of Origin, which may help UK businesses in utilising the preferential tariffs available. Of significant interest to UK manufacturers, the agreement also allows for diagonal cumulation with other CPTPP members, meaning that UK manufacturers can consider inputs imported from other members as ‘local’ when determining whether their products qualify as being of UK origin for export to CPTPP countries.

A UK company could for example import an input from Vietnam (a CPTPP member), and use that input to count towards its ‘local’ content when determining whether the product meets the Rule of Origin for export to Mexico (another member country).

Considerations for China

It is worth highlighting that China submitted a formal application to join the CPTPP last September. Similar to the UK, a membership of the pact will strengthen co-operation for trade in goods and services, but it is unclear whether China can meet the standards outlined. To admit a country to the CPTPP, there must also be unanimous agreement amongst all existing members and this has not been reached as of yet. The UK will now have a key role in influencing the direction of travel in this regard, and former Prime Minister Liz Truss firmly stated that the UK should block China’s accession to the pact in the immediate aftermath of the agreement last week.


Overall, the UK’s access to the CPTPP is a welcome move, building on the trade agreements already held with a large number of trade partners and deepening economic ties with fast-growing economies such as Vietnam. Perhaps most notably, securing a trade deal with Malaysia for the first time is one of the most significant benefits of the agreement, giving UK businesses much improved access to an economy worth £271 billion in GDP in 2021. 

While the overall economic benefit to the UK is forecast to be marginal (+0.08% of GDP by 2030), the impact of reduced tariffs may be highly beneficial to manufacturing businesses in certain market sectors, with government analysis highlighting the automotive, beverages and tobacco sectors in this regard. Many businesses beyond these sectors may be able to benefit from the agreement, however, and we would recommend that manufacturers and businesses trading in goods undertake analysis on the impact of the tariff and origin provisions in particular. 

If you would like to discuss the agreement in more detail and how your business may be able to benefit, please contact Ian Worth or your usual Crowe contact.

Spring Budget 2023: Customs package

The government has provided details on a string of customs measures in its recent Spring Budget announcement. 


From a duties perspective, fuel duty was frozen, with the extension of the 5p cut for a further 12 months, though an argument remains on whether this cut has been sufficiently passed on to drivers. For alcohol, draught relief will increase from 5% to 9.2%, which has been sold as helping to mitigate the planned inflationary rise in alcohol duty expected in August. The only changes therefore concerned excise duty, with no changes announced for conventional customs duty rates, with a potential missed opportunity to ease supply chain difficulties by reducing or eliminating duty rates for food imports.

What else was announced?

Simplifications for customs declarations

As a result of the stakeholder engagement input in the government’s “call for evidence” last year, a number of simplifications and improvements to the Simplified Customs Declaration Process (SCDP) have been announced. 

Authorised businesses who use SCDP will now have an increased amount of time to submit their supplementary declarations for imports and exports. The deadline will be shifted from the 4th working day to the 10th calendar day of the month, with the Final Supplementary Declaration (FSD) now due by the 11th calendar day of the month, and a relaxation on the aggregation rules also in scope.

These changes will help to relieve pressure on businesses with high volumes of customs declarations, and in particular those for whom the number of customs declarations has skyrocketed post-Brexit. It remains to be seen whether these changes will have an impact on the monthly payment date for traders holding Duty Deferment Accounts. This measure is, however, very much a sticking plaster for the failures of the existing system, which has become stretched by the increased number of declarations since Brexit.

Voluntary standards for customs intermediaries

The government also announced, much to the interest of businesses who regularly import and partner with customs intermediaries, that they will consult stakeholders in the summer of 2023 on the introduction of a voluntary standard for those operating as customs intermediaries e.g. customs brokers, with the aim of eliminating varying levels of service quality across the sector. While an improvement to service quality levels will be welcome, it remains unclear how a voluntary standard might be effective.

Changes to financial guarantee requirements

The government intends to engage with industry to reduce financial guarantee requirements for traders using certain customs facilitations e.g. special procedures and duty deferment. These requirements were removed for most traders post-Brexit to simplify trading, and the new measures are expected to improve cash flow and ease administrative burdens for a greater number of traders. For business who currently have a customs guarantee in place, it is advisable to understand and review whether the guarantee may no longer be required.

Advance Valuation Rulings (AVR)

A new mechanism to allow for HMRC to issue binding rulings on customs valuation, “Advance Valuation Rulings”, will be set out legislatively in the Spring Finance Bill. Such rulings will act to give certainty to traders with complex valuation arrangements on how to arrive at the correct customs value for their goods, and will supplement the existing mechanisms for binding rulings on customs classification and origin.

Measures will also be introduced in the Finance Bill to the operation of the Trade Remedies Authority (TRA). The proposed changes would give the Government additional powers to decide the outcome of trade remedies investigations while maintaining the TRA’s independent investigatory and recommendation functions. Post-Brexit, the TRA was set up with the intention for it to be act as independent, arms-length body, but this change will act to significantly dilute its independence and powers.

Other simplifications announced include simplifications to the Transit procedure and more details on the Modernising Authorisations project, which aims to streamline and digitise the customs authorisations process.

To discuss any of these announcements, please contact Ian Worth or your usual Crowe contact.

Alcohol duty reform – draft secondary legislation 

In September 2022, HMRC released draft primary legislation in regards to the alcohol duty system. HMRC have now released the draft secondary legislation which is due to take effect from 1 August 2023 and have invited stakeholders to provide their feedback and opinions. 

Key headlines 

The legislation introduces an excise duty relief for certain alcoholic products that cannot be consumed i.e. undrinkable sediments. The relief is specifically in relation to ‘cask conditioned’ alcoholic products i.e. alcoholic products which undergo fermentation in the container from which it is served for consumption. Alcohol duties are not applicable to such products, but will apply if the guidelines are breached. 

In the draft primary legislation, small producer’s relief was introduced for small businesses to benefit from reduced rates of duty on qualifying alcoholic products. The secondary legislation expands on this relief by mandating the presentation of a small producer relief certificate upon HMRC’s request. The certificate must be endorsed by or on behalf of the customs authority from the country in which the alcoholic product was produced. If a trader cannot produce this certificate, they run the risk of an assessment being raised where HMRC can challenge that an ‘incorrectly low rate of alcohol duty applied’. It is therefore advised that small traders who use this relief liaise with their supplier to ensure that this certificate is provided. 

The legislation also provides for grower’s domestic consumption relief where excise duties may not apply to wine and other fermented products. This is specifically in relation to alcoholic products which are distributed from the production premises for the purpose of domestic consumption of the grower of the ingredients. 

More generally, the regulations provide useful guidelines on how to determine the amount of alcoholic product in a given container and how to ascertain the strength of the product with reference to the ‘actual strength method’. 


HMRC welcome views on the draft regulations and if you wish to participate in the consultation, please email the policy team at [email protected]. Please note that the consultation closes on 9 April 2023. 

To discuss the above in more detail, please contact Ian Worth or your usual Crowe contact.

Can the Windsor Framework be trusted?

On 27 February 2023 Rishi Sunak and Ursula von der Leyen, announced that a new agreement had been reached to replace the Northern Ireland Protocol, following two years of negotiations since the protocol came into force. This agreement is called the Windsor Framework.

The proposal’s intentions

The main aim of the Windsor Framework is to address the problem of friction on the movement of goods between Great Britain (GB) and Northern Ireland, while also maintaining appropriate checks and controls on goods destined for The Republic of Ireland, without imposing a hard border between Northern Ireland and The Republic of Ireland. 

The framework looks to establish a UK internal trade scheme, focussed on commercial data sharing, rather than international customs processes. 

It proposes green and red lanes to reduce checks and paperwork on goods that are destined for Northern Ireland, and separate them from goods at risk of moving into the EU Common Market. Goods being sold within Northern Ireland will not be subject to unnecessary checks, duties or certification. 

In order to allow businesses to prepare (and to have the agreement ratified by both legislative bodies), the implementation of the agreement will be staggered, with some entering into force towards the end of this year, and the remainder introduced in 2024. 

New Trusted Trader scheme

The proposed green lane solution, for goods being shipped from GB to Northern Ireland is intended to benefit “trusted traders” by removing all unnecessary customs controls, but only for those traders who have been approved as “trusted”. The framework also aims to remove customs formalities for the movement of goods from Great Britain to Northern Ireland, providing participants can fulfil the same “trusted trader” criteria. 

The criteria to be met as a trusted trader is closely aligned with established “economic operator” criteria and is intended to demonstrate to HMRC that the parties to a transaction have the necessary internal controls and diligence to behave in a responsible, trusted fashion. Having this status will demonstrate to HMRC that the goods being shipped to Northern Ireland are not “at risk” of being moved onward to the Republic of Ireland without completion of EU import formalities. 

This new proposal compares to that in the existing Northern Ireland Protocol, whereby registration for its UK Trader Scheme (UKTS) requires businesses to declare that the goods they send to Northern Ireland are not “at risk” of being further shipped across the EU’s border into the Republic of Ireland. To register for the UKTS however, businesses must be established in Northern Ireland or must employ the services of an indirect representative, ensuring that there is somebody physically located in Northern Ireland to be responsible and accountable for any error or breach of the trust embodied in registration for UKTS. The Windsor Framework opens access to this new UK Internal Market Scheme for anybody involved in a transaction or movement of goods from GB to Northern Ireland, but still requires representation in Northern Ireland (e.g. an entity accountable for any breach of trust).

Practical implications

The difficulty with this situation and the reason for so much attention being given to it is that Northern Ireland is part of the UK and wants to be treated no differently to any other parts of the UK, particularly in the context of trade within the UK. For this reason, the Northern Ireland Protocol’s requirement that all goods moving from GB to Northern Ireland must be declared was unacceptable. Alas, it appears that the Windsor Framework has failed to address this issue adequately because movements must still be declared and eligibility for a trusted trader status must be demonstrated whilst trade elsewhere in the UK’s internal market continues to be unfettered by such requirements.

HMRC’s new approach

In February, we attended HMRC’s Stakeholder Conference, at which they presented their vision of “..a world class customs regime that supports economic stability and growth while protecting against market, security, biosecurity and fiscal risks from imports and exports”. The conference highlighted the need to prioritise control activity that removes “bad actors” from the sphere of tax advisory and compliance activities, while acknowledging and facilitating the efforts of the “good actors”. It appears this will be the way that HMRC aims to create an “ecosystem of trust” to underpin its relationships with businesses.

HMRC and other government departments talk in ambitious terms about an “ecosystem of trust”, as a foundation for a world class customs system, yet the starting point is one of mistrust. An approach which levels the playing field for all UK internal market trade could be to trust traders by default, then punish those who abuse that trust. In this way, there would be no need for a “trusted trader scheme”, or for goods moving from GB to Northern Ireland to be treated any differently than if they were going to Scotland or Wales. No need for declarations beyond those where the movement to Northern Ireland is a planned route to the Republic, and therefore is a UK export to the EU.

The Windsor Framework, on inspection, doesn’t resolve all of the issues of the preceding Northern Ireland Protocol. There is still much to do, but a really good start would be for Government to start trusting good actor traders meaningfully and unconditionally while at the same time delivering meaningful penalties to those bad actors who abuse that trust. Whether HMRC has the capacity to do that and in an effective manner is something that remains to be seen.

To discuss the above in more detail, please contact Ian Worth or your usual Crowe contact.

Customs Special Procedures – an increasingly utilised solution for duty mitigation


Customs special procedures can be highly useful for businesses in reducing, postponing or mitigating the duty and import VAT payable on goods imported into the UK under specific conditions. The benefit of using a special procedure will depend on the operations of the business and it is helpful to map out the supply chain in detail to identify which measures can alleviate the duty payable position. 

For many businesses, the impact of the UK leaving the European Union in introducing a customs border between the UK and the EU has resulted in scenarios where “double duty” or irrecoverable import VAT has added significant cost to moving goods under existing supply chains. 

Use of a customs special procedure can often mitigate these costs entirely, and this approach can be much more attractive to businesses than fundamentally realigning supply chains or changing operating models in order to ensure that it can continue to serve its customer base in the most efficient manner. We recently obtained data from HMRC in order to understand the trends in special procedure applications and we have summarised our findings below. 

Special procedures and recent trends 

Inward Processing (IP) 

Goods imported into the UK for processing or repair under IP benefit from suspended import VAT and customs duty. If the goods are re-exported from the UK following these operations, no import VAT and customs duty will be payable in the UK. It is also worth noting that a lower rate of duty could be paid if the processed goods attract a lower rate of duty in comparison to the raw materials originally imported into the UK.

In 2021, there were 1,215 applications made for IP in the UK, a 118% increase from 2020, and 1,344 applications for IP were approved in 2021 and 2022, representing 69% of all active IP authorisations. 

While the number of applications for IP decreased from 2021 to 2022, the number still dwarfed the number of applications in 2019 and 2020, demonstrating that businesses are still adjusting to the new post-Brexit trading landscape.

Outward Processing (OP) 

The mechanics of Outward Processing can be considered to be the inverse of the IP procedure i.e. goods exported from the UK for processing or repair and are re-imported into the UK following such operations. Similar to IP, the goods may attract full or partial relief from customs duty upon re-importation into the UK, with customs duty charged only on the value added by the process undergone outside the UK. 

Similar to IP, there was a considerable increase in the number of applications made for OP post-Brexit, with a 227% increase in applications from 2020 to 2021. Approved applications in 2021 and 2022 represent 70% of all active OP authorisations.

Customs Warehousing (CW) 

If goods are imported into the UK and stored under the Customs Warehousing procedure, customs duty and import VAT will be suspended until the goods are released from the warehouse, and if the goods are re-exported, duty and import VAT will not be payable at all in the UK.

The goods remain under the supervision of HMRC and must not be altered other than handling required to preserve their condition or improve packaging or marketable quality. This procedure typically benefits businesses who require storage for goods such as seasonal items or who use the UK as a distribution hub.

The trends for CW post-Brexit are not as sizeable as IP or OP for 2021, with a 68% increase in the number of applications made (384) and a 44% increase in approvals (168) from 2020. Approvals in 2021 and 2022 represent 23% of all active Customs Warehousing authorisations.

It is worth noting that an application for Customs Warehousing is a much more comprehensive and complex endeavour in comparison to other special procedures, with an application process often taking six to nine months.

Temporary Admission (TA)

Goods imported into the UK under TA can benefit from relief from import VAT and duty, provided that the goods are re-exported within two years. The goods must be imported for a specified use and should not undergo alteration or changes. This procedure is useful for example for goods used in trade shows or exhibitions or samples imported for testing purposes.  

The facts that goods must fall under a qualifying category and have a specified use acts to limit the scope for use of this procedure, and there are currently only 282 active TA authorisations in place. Similar to IP and OP, 71% of these authorisations resulted for approvals in 2021 and 2022.

In order to use special procedures, businesses must apply for an authorisation from HMRC, demonstrate good customs compliance and ensure that they can fulfil the requirements associated with the regime. Some special procedures can be used on an ad-hoc “by declaration” basis, but such usage is limited to up to three times in a rolling year.

How we can help 

We have extensive knowledge and experience in helping clients across a number of industries in implementing customs special procedures. We have seen our clients benefit greatly from exercising these reliefs, as they present cash-saving opportunities and maximise operational efficiency. We typically undertake an initial exercise to understand the business’ supply chain and operating models and prioritise our focus on identifying the customs duty obligations. We then work with the business to explore duty mitigations and consider the feasibility of operating special procedures, and how this will be managed within the wider supply chain. We will support the business in applying for the authorisation from HMRC and help monitor and oversee the post-authorisation process and navigating the compliance requirements e.g. Bill of Discharge (BoD) for IP. 

To discuss the above in more detail, please contact Ian Worth or your usual Crowe contact. 

Changes to EU air shipment procedures – ICS2

From 1 March 2023, airfreight shippers and freight forwarders must ensure compliance with the second phase of the European Union’s new Import Control System (ICS2). This will impact all air shipments to the EU, Norway and Switzerland. 

ICS2 is the EU’s IT system designed to collect safety and security data about goods entering the union. 

The new system, implemented to better identify high-risk cargo earlier in the supply chain, requires air operators to submit a much more detailed set of data for a shipment at item level. 

Your operator may refer to these pre-loading and pre-arrival messages as the Entry Summary Declaration (ENS) and will require additional data:

  • a complete description of the goods at item level
  • commodity code to 6-digits
  • the EORI number and full address of the consignee.

If you are shipping by air to the EU, these new data requirements must be provided to the freight operator at the point of booking, or risk your shipment being put on hold, being rejected, or being put at greater scrutiny by customs authorities; resulting in possible increased costs and a disruption to your supply chain.

For further information on how we can help you, please contact Ian Worth or your usual Crowe contact.

HMRC extend deadline for CDS exports

On 15 December 2022, HMRC announced that they are extending the deadline for exporters to move over to the Customs Declaration Service (CDS) from its predecessor CHIEF. The original deadline was 31 March 2023, but this has now been pushed back by a further eight months, meaning exporters now have until 30 November 2023 to migrate to the CDS. 

This announcement did not come as a surprise to many, as the deadline for importers to start making declarations on CDS had previously also been extended numerous times. While the majority of importers have now moved over to CDS, functionality issues and workaround solutions remain, with regular system outages also occurring in recent months. It is thought that the extension to the export’s deadline will allow HMRC to prioritise dealing with these issues while also ensuring that all stakeholders are prepared for the transition for exports.

A costly tale of IP compliance failure

Inward Processing relief (IP) can deliver significant savings for UK manufacturers, relieving the UK customs duty and import VAT costs on materials which are used in a process then subsequently exported. However, there are stringent obligations attached to the use of IP, and small mistakes can lead to non-compliance and huge demands from HMRC for duty and VAT. 

In April 2017, HMRC issued a C18 Post Clearance Demand Note to Thyssenkrupp Materials UK Limited, a business who import aluminium for use in the manufacture of aircraft parts. The sum of the C18 totalled £8.8 million – which consisted of £2.4 million in customs duty and a further £6.4 million in VAT, covering the time period between March 2014 to December 2014. Thyssenkrupp ultimately appealed against this decision, resulting in a First Tier Tribunal (FTT) case between themselves and HMRC.

Bill of discharge

A Bill of Discharge (BoD) completes the obligation to inform HMRC that goods – which have been imported and subsequently processed under IP – have either been put to their agreed authorised use (exported) or destroyed. While the BoD can contain details regarding multiple different entries, it is presented as a single schedule of entries covering a specific timeframe. BoDs are compulsory under IP authorisation, and they must to be submitted to HMRC within the agreed time intervals – in this case, quarterly.

HMRC believed Thyssenkrupp had not been compliant with the requirements relating to their BoD, and consequently breached the conditions of their IP authorisation. Specifically, HMRC stated that Thyssenkrupp had failed to demonstrate that their goods had been disposed of correctly. This was originally identified when HMRC reviewed Thyssenkrupp’s MSS data, and when comparing it with the BoD they had submitted, the two did not match up as expected by HMRC.


HMRC made the case that Thyssenkrupp would be liable to pay customs duty and VAT relating to the entire schedule of entries on the BoD, as the BoD was not completed accurately.  

This then went on to form the basis of the dispute between the two parties:

  • does a single error on a single row within the BoD, invalidate the BoD completely? 
  • or does the error (and subsequent customs debt) only relate to that particular row?

The FTT relied on a conclusion by the CJEU from an earlier case - Döhler Neuenkirchen GmbH v. Hauptzollamt Oldenburg, stating that the “non-fulfilment of an obligation, linked to the benefit of an Inward Processing procedure … gives rise, in respect to the entire quantity of the goods covered by the Bill of Discharge, to a customs debt”.

The FTT did accept a claim by Thyssenkrupp, that failing to make a post clearance amendment (PCA) for all corrections is not an omission on a BoD, nor is it a requirement in the law or authorisation. However, the FTT also agreed with HMRC, who argued when incorrect entries are made on the CHIEF system (which in turn determine MSS data), a PCA has to be made to correct the error and match the BoD. Without these steps being taken, the MSS and BoD cannot be reconciled, making it incomplete. Even where Thyssenkrupp did make a PCA when a wrong commodity code was entered on CHIEF, the PCA does not update the MSS data automatically, and a separate reference has to be made indicating the amendment on the BoD. Due to the BoD ultimately being erroneous, it resulted in a non-fulfilment of IP obligations.

Increased IP uptake following Brexit

Since Brexit, the use of IP has increased significantly in the UK, helping UK businesses to strip UK customs duties from their exports to overseas customers. While the achievement of an IP approval is itself a significant step for many businesses, some are unprepared for the obligations of completing and submitting compliant BoDs.

It is imperative to ensure not only that BoD submissions are accurate and complete, but also that they comply consistently with the requirements of IP. Thyssenkrupp’s experience demonstrates that one small error can lead to significant customs duty and VAT liabilities. 

Using MSS data

MSS (Management Support System) is HMRC’s system which captures all data declared at import and export. MSS reports can be obtained from HMRC, showing all the data that HMRC themselves use when selecting importers for audit. They allow full visibility of a company’s import and export activity, and in this case, could have allowed Thyssenkrupp to highlight and correct discrepancies before HMRC detected an issue.

MSS data and BoDs should always be reconciled, and for any business wanting to be fully customs compliant, obtaining MSS data reports should be one of the first steps. 

How we can help

Our Customs team provide specialist advice and tailored support to any businesses looking to attain special procedures authorisations, including IP. We support businesses with applications for IP, setting up compliant records and procedures, and using our analytic tool, Customs-ID, we can quickly analyse MSS data to identify errors and support the ongoing compliance obligations to maintain an authorisation – as this is often where businesses fall short.

To find out more, please contact Ian Worth, or your usual Crowe contact.

Customs valuation and transfer pricing

HMRC has recently updated its guidance on customs valuation, which now sets out conditions under which a transfer price may form the basis of a Method 1 customs value.

At import, one of the key elements of a customs declaration is the value of the goods being imported. This is the basis on which customs charges are calculated, so there are strict rules on how to determine the “customs value”. These rules help to ensure that customs charges are collected on the basis of a realistic and fair valuation of the goods being imported, thus avoiding the risk of fictitious or arbitrary values being declared. Correct application of the customs valuation rules should result in a customs value which corresponds to the full price paid or payable for the goods plus the cost of shipping them to the point of entry. It is the importer’s legal responsibility to declare the correct value for the goods he imports.

In around 95% of import declarations, the customs value is based on the price paid or payable for the goods when they were sold for export, using the invoice from the seller as evidence of the value. This is the “transaction value” method, also known as Method 1 (there are five other valuation “Methods”, which come into play if Method 1 cannot be used, but for the purposes of this article, we only need to consider Method 1).

Where the transaction is between unrelated parties, it usually represents the full price paid or payable for the goods, and thus is a reliable basis for determination of the customs value to be declared at import. However, the use of a transaction value between related parties raises a question as to whether the invoice price is influenced by the relationship, often requiring multinational organisations to consider whether the price they charge for an inter-company transaction is a true “arm’s length” value. This is important in determining where company revenue and profits are taxed, as well as being a necessary consideration in determining the customs value.

Related parties, trading with each other in different countries, use transfer pricing mechanisms to underpin the integrity of the price they charge to each other. Usually, the details are contained within a transfer pricing agreement, which sets out how the intercompany price is determined alongside any factors which may give rise to any adjustments, often on a periodic basis. Tax authorities in the country of sale require that transfer pricing agreements should adhere to OECD guidelines, and for many years it has been generally accepted that a transfer pricing agreement signed off by a tax authority has generated a compliant customs value for the buyer.

However, HMRC have now set out that in some instances, a transfer price does not comply with the requirements for use of a Method 1 customs valuation – the transaction value.  This is because in some instances, the transfer price is subject to a subsequent adjustment which cannot be determined at the time of import, therefore, the invoice price at the time of import might not represent the “full price paid or payable” for the goods. 

Method 1 is not automatically ruled out just because a transaction is between related parties, but if the details of a transfer pricing agreement show that the transaction price is influenced by the relationship, then other valuation methods must be used.

While the previous practice of aligning transfer pricing methodology with customs valuation was widely accepted, this new stance by HMRC is likely to cause confusion, leading to potential non-compliance. The likelihood of customs audit officers fully understanding the technical details of a complex transfer pricing agreement is slim – no offence to customs audit officers – presenting a high risk of incorrect decisions disallowing the use of Method 1.

Considering the points discussed in this article, which cover just some of the complexities and ambiguities involved in customs valuation, it is perhaps welcome news that HMRC intend to soon offer the option to request an Advance Valuation Ruling, whereby upon request, a legally-binding ruling can be obtained from HMRC on how to value your goods.

While HMRC are currently seeking views on how exactly the system should operate, it is expected this will be akin to how Advance Tariff Rulings (for classification) and Advance Origin Rulings (for origin) already work today. The rulings will act to give certainty to importers who are unclear on where they stand in terms of valuation of their goods for import.

With HMRC also announcing changes to the UK’s transfer pricing legislation from 1 April 2023, in response to the Base Erosion and Profit Shifting (BEPS) Action Plan which includes the need for large multinational groups to produce: 

  • a master file – containing standardised transfer pricing information 
  • a local file – with specific information of local transactions affecting the local UK tax payer. 

In additional, organisations will also need to provide a summary audit trail which shows the main actions they have taken in preparing their transfer pricing local file.

The above documents can also be requested by HMRC at any time, including outside of an enquiry. Failure to maintain and produce the required documents is likely to lead to HMRC considering a taxpayer has been ‘careless’ when it comes to assessing penalties.

With both HMRC’s stance on transfer pricing and also on their approach to assessing the ‘transaction value’ from a customs duty perspective changing, there is likely to be confusion as to what transfer pricing methodology and value to use along with what documentation that organisations should retain to support their approach.

As a result, we strongly recommend that companies who import goods into the UK from related parties should review their transfer pricing arrangements to determine the correct customs valuation method for their UK customs declarations.

For further information, or to arrange a review of your customs valuation procedures, please contact Ian Worth, or your usual Crowe contact.

Chancellor’s boost for UK manufacturing?

In his Autumn Statement, the Chancellor announced the removal of import duties on over 100 products. The stated aim is to reduce costs for UK manufacturers and assembly operations, on specified products imported for use in their processing activity. The finer detail of this announcement shows that this measure would have happened anyway, and indeed should already have happened for applicants for tariff suspensions, which were invited during the summer of 2021, so it is by no means a grand gesture from the Chancellor, more of a catch up for the slow bureaucracy in processing the applications already made. 

A system of tariff suspensions has been in place for many years. Before Brexit there were two application windows each year, whereby applicants would demonstrate that they need customs duty removed from imported materials or components on grounds that there was insufficient availability of EU manufactured equivalent goods. The applications were then considered by all EU members, and relevant trade associations contacted to invite objections from potential EU suppliers, before a suspension of duty was implemented, usually six months following the closure of application windows. The suspension of customs duty was justified as there was no tariff protection needed by EU producers, having been given the opportunity to raise objections. Once a suspension was implemented, it would usually last for five years, with automatic renewal in the absence of any new objections.

Since Brexit, the UK has not had to consider the effect of suspension on EU manufacturers, so for UK manufacturers, the application process should be simpler and quicker. However, while pre-existing EU suspension measures were rolled forward in the post-Brexit UK, the UK’s replacement system has been slow in its development. New suspensions which had been expected to apply from early 2022 will now apply from 1 January 2023 for a period of two years. You can find the list of suspensions effective from 1 January 2023 here.

UK manufacturers who need to import their materials or components may be eligible to apply for a tariff suspension, or may be eligible for other duty relief regimes. For more information, please contact Ian Worth, or your usual Crowe contact.

How to get the most out of your AEO authorisation

Authorised Economic Operator (AEO) status is an internationally recognised quality mark for businesses, proving their role in the global supply chain is compliant and secure.

There are three types of AEO status available

  • AEOC – Customs Simplification
  • AEOS – Security and Safety
  • AEOF – Full (combination of both AEOC and AEOS)

All three authorisations offer a vast number of benefits to businesses wishing to become a ‘trusted trader’. Some of the main benefits include:

  • easier admittance to customs simplifications and authorisations
  • fewer physical and document-based controls via a lower ‘risk score’
  • advance notification if you are selected for any customs control measures
  • priority treatment of your consignments when undergoing customs control measures (including choice of location in certain cases)
  • reductions or waivers of comprehensive guarantees
  • mutual Recognition Agreements with EU, Japan, China, USA, Switzerland
  • overall cost saving due to more efficient business operations.

On top of the benefits mentioned, AEO status also provides key staff with a much more in-depth understanding of customs procedures, and enhances your business’s relationship with government authorities.

The AEO application process is comprehensive, so it is vital to ensure that your business fully understands what is required in order to apply, and how to be successful in doing so. This is covered in more detail here.

The integrity of AEO status is dependent upon following the documented procedures on which the approval was issued, however once authorisation has been granted, some businesses neglect the need to maintain their AEO status, leaving carefully constructed procedure documents to gather dust. A key element of maintaining AEO status is the continuing ability to demonstrate that the procedures are regularly reviewed and are followed. AEOs are monitored by HMRC on an ongoing basis, and the idea in essence is that a relationship will be formed between the nominated AEO officer and your business. 

Interestingly, between 1 January 2020 and 31 December 2021, there were: 

  • 27 AEO authorisations were suspended or revoked by HMRC
  • 224 authorisations granted
  • as of 13 October 2022, an overall total of 1,235 AEO businesses in the UK.

70% of those businesses received their authorisation after the UK announced it was leaving the EU on 23 June 2016.

What are the key areas of compliance to monitor after obtaining AEO status?

All of the points below should be covered by appropriately documented procedures, which should be reviewed at regular intervals.

  • Make sure you communicate as frequently as necessary with your dedicated AEO point of contact, as their role is to provide you with guidance.
  • As an AEO, it is simpler to receive access to other customs authorisations, which presents an opportunity to further reduce business costs.
  • Any risks which are highlighted should be addressed immediately, and should not be left to be discovered at a later point.
  • Any relevant changes to customs or business operations should be notified to HMRC straight away. This includes changing address, changes to key personnel, changing computer systems, etc.
  • Staff which are involved in important areas of the business should have a clear training programme in place and training material should be regularly reviewed and updated.
  • Areas of responsibility should be clearly defined, with a nominated person is placed in charge of maintaining the AEO authorisation by ensuring procedures are followed, updated and complied with consistently.
  • Your AEO authorisation number should be included on all customs declarations made in your name.

How we can help

As referenced, the consequences of failing to maintain an AEO status can result in suspension or revocation of an AEO approval. This can damage relationships with HMRC as well as with business partners. While there is no restriction as to when you can reapply if this does happen, the AEO application process can be administratively burdensome and time consuming for some businesses, which is why it is crucial to avoid ending up in this situation. 

It is highly recommended to undertake an independent annual review of your AEO procedures. By doing this, it helps to maintain your AEO status and also allows any potential issues to be identified and resolved. Amendments to your procedures can also be implemented where required, to avoid similar issues arising in the future. 

Between January 2019 and December 2021, 56% of AEO applications were not successful, which is why many businesses seek out external support to give themselves the best chance of success, both before and after authorisation. Our Customs team have extensive knowledge of the AEO process which means they can assist you with the application, to include creating high quality procedures and assisting with ongoing maintenance of the authorisation. 

For further information about AEO, please contact Ian Worth, or your usual Crowe contact.

Onward Supply Relief – a cautionary tale

In a recent Tribunal case, BMW Shipping Agents Ltd v HMRC (2022) UKFTT 335 (TC), the First-tier Tax Tribunal (FTT) agreed that a freight forwarder that had made customs declarations in its own name, rather than as agent, was liable for import VAT when claiming for Onward Supply Relief (“OSR”). 

BMW Shipping Agents (“BSA”) had submitted Customs declarations claiming OSR. At the time (pre-Brexit), OSR removed any liability to import VAT where goods were imported into the UK by a UK VAT registered importer who then, within one month, made a zero-rated supply of those goods to a person registered for VAT in another EU member state.

On 18 April 2016, HMRC sent BSA a form C18 post clearance demand note in respect of import VAT totalling just over £3 million. The import VAT related to goods received in the UK by BSA between April 2013 and March 2016 from suppliers in China and which were immediately forwarded to the ultimate recipients of the goods elsewhere in the EU.

HMRC's view was that BSA did not qualify for OSR as they had not themselves made a supply of the goods to the end customers in other EU countries. They considered this to be the case since BSA did not own the goods (and so could not supply them directly) and any supply which was made was not in BSA’s own name, even as agent for another party.

BSA accepted that OSR was not appropriate and that, as a result, a liability to import VAT had arisen. However, it appealed against the post clearance demand note on the basis that it was acting as agent for another party and that, in these circumstances, it is the principal rather than the agent who is liable for the import VAT.

The main requirements for OSR are contained in Regulation 123 Value Added Tax Regulations 1995. Regulation 123(a) requires the onward supply to be made by a “taxable person” (i.e. someone who is registered for VAT in the UK). The effect of Regulation 123(c)(2) is that the importer must be importing the goods in the course of a supply of those goods by that person to somebody who is registered for VAT in another EU member state.

Unfortunately, BSA had no ownership interest in the goods and no involvement in the supply of the goods to the ultimate recipients. Its sole involvement was to arrange for the goods to clear customs in the UK and to arrange for them to be forwarded to the customers in Europe.

However, the requirements in relation to OSR state that Box 44 of the Customs Declaration must contain the VAT number of the person importing the goods and the VAT number of the person to whom the goods are being supplied in another member state. The VAT number of the person importing the goods is to be preceded by “Y040GB” if the goods are imported on that person's own behalf and “Y042GB” if they are being imported as agent for somebody else (this is set out in paragraph 2.3 of VAT Notice 702/7).

In each case, the declaration has been completed by BSA using the “Y040” prefix, indicating that the goods were being imported on their own behalf and not on behalf of somebody else. The VAT number given was BSA’s VAT number, indicating BSA as the supplier of the goods even though it was not actually supplying them. As a result of this relatively small oversight by BSA import VAT became due and, because BSA was not the owner of the goods, it had a liability to pay that tax but could not reclaim it.

What this means

While OSR, following the UK’s exit from the EU, is now only claimable on goods imported into Northern Ireland for onward supply to the rest of the EU, there are still key considerations to be made when using VAT simplifications in complex supply chains.

A trend is emerging of UK exporters selling their goods on a Delivered Duty Paid INCOTERMS® basis to their customers in the EU, thus assuming all export and import responsibilities (including payment of VAT and Duty) alongside any use of Customs Regime 42. In this way, import VAT is relieved in one member state before the immediate onward supply to a business customer in another becomes the responsibility of that UK seller. Typically, we have seen this Customs Regime 42 import VAT relief is claimed in France where the goods have been imported before being supplied onward to another EU country.

The intra-EU supply of goods between businesses allows the supplier to zero-rate the sale in the member state of dispatch of the goods with VAT becoming payable as acquisition tax by the customer in the destination member state. This requires the supplier of the goods to raise a zero-rated VAT invoice to the ultimate customer. By definition, a supplier of goods must own those goods in order to make a supply and raise a zero-rated VAT invoice.

To make a zero-rated despatch using OSR it is a requirement for the supplier to be VAT registered in the member state of despatch, and for the customer to be VAT registered in the destination member state and the supplier to record that registration number. This helps make sure that the VAT is not lost where, for example, the goods are supplied to a non-VAT registered person.

Where UK exporters are using a facilitator to expedite DDP shipments to the EU whilst using Customs Regime 42, extreme care should be taken to ensure they are compliant with the relevant obligations and it does not result in demands for unpaid import VAT. As we have seen in the BSA case, failure to do so can have serious financial repercussions. Informing the facilitator of the supply chain details and agreeing what information will go in the Customs Declarations will be critical to making the relief work correctly.

For advice on compliance with the requirements for claiming relief from import VAT, please contact our Customs and VAT specialists.

Australian Goods and Services Tax (GST) – a guide for UK exporters of goods to Australia

The Australian Taxation Office (ATO) is pro-actively identifying and undertaking reviews of overseas online retailers as well as online platform operators that have been selling goods to Australian consumers but are not registered in Australia for the Goods and Services Tax (GST). 

In light of this, we have created a guide for UK-based businesses that may be impacted by Australian GST. 

We note that this guide does not cover the Australian GST implications of any transactions that involve the online retailer or platform operator importing the goods into Australia and subsequently making sales to consumers. 

What is GST?

GST is a broad-based tax of 10% imposed on most goods, services and other items sold or consumed in Australia and also on most imported goods. It is similar to VAT.

Goods entering Australia that have a customs value of more than AUD$1,000 attract GST at the border and import GST is payable to Australian Customs.  

Low value goods (AUD$1,000 or less) imported into Australia may also be subject to GST under Australia’s low value imported goods (LVIG) regime, enacted with effect from 1 July 2018. Under the LVIG regime, GST is broadly imposed on goods imported directly by Australian consumers with a customs value of AUD$1,000 or less. (As of 17 October 2022, AUD$1,000 equates to around £555).

The GST on low value goods is required to be collected by the overseas seller at the time the sale is made and remitted to the ATO, instead of being paid by the importer at the Australian border. However, the seller is only required to collect GST on the sale of low value goods if the sale is not being made to a GST-registered business who is purchasing the goods for use in their business in Australia.

How does it work?

The LVIG regime uses a supplier collection model which imposes the obligation to collect and remit GST on the supplier at the point of sale, rather than the point of import. GST continues to be payable to Australian Customs at the point of import on goods with a customs value of more than AUD$1,000.

Importantly, the LVIG regime places the responsibility for collecting and paying GST on the supplier of the goods (provided the supplier exceeds or expects to exceed the AUD$75,000 registration threshold in a given 12-month period). Further, where a large volume of trade in low value goods is conducted through large electronic platforms or marketplaces, the LVIG regime shifts the burden of collecting the GST from the merchant to the platform operator.

What do I need to do?

Australian GST may apply to UK-based exporters for retail sales of low value goods.  Retailers, online marketplaces and goods re-deliverers may need to register and pay GST to the ATO.   

A UK-based supplier only needs to be registered for GST if the value of their sales of low value goods imported into Australia by consumers (plus any other sales made that are connected with Australia) is AUD75,000 or more in a 12-month period. UK-based suppliers that only make sales of goods that are imported into Australia by GST-registered businesses are not required to register for GST.

Further information

If you have any queries on the intricacies of the LVIG regime when exporting goods to Australia, or require any assistance with GST registration and compliance, please contact Ian Worth, Robert Marchant, David Penpraze or Katerina Siamatas.  

Waiver code to replace LIC99 for Customs Declaration Service

Much was made from those in the customs world when HMRC announced that the new Customs Declaration Service (CDS) system would have no equivalent of the LIC99 code that is facilitated in CHIEF.

With effect from 7 February 2022, document waiver code 999L may be entered in Data Element (DE) 2/3 to satisfy certain Tariff measures for goods imported or exported from GB.

This facilitation allows a CDS waiver code to be declared for prohibited and restricted commodity codes, allowing declarants to confirm that the goods are not subject to specific licencing measures i.e. a specific licence is not required to import or export the declared goods.

This eliminates the need to add multiple different document codes for a single goods item, as would ordinarily be needed where those goods are subject to more than one licence measure, but are exempt from the controls; entering document code 999L once will satisfy all measures the goods are exempt from.

Where a mandatory licence document code is required it must be entered, and use of 999L for these goods will cause the declaration to fail validation. This waiver cannot be used for goods that are imported/exported or moved to/from Northern Ireland.

This code was initially available for use until 30 September 2023, but HMRC have extended use of this code until 31 January 2024. From this date, new document waiver codes will have to be used – please refer to our article titled ‘Withdrawal of document waiver code 999L’ for further information in this respect. 

Why you should not automatically accept HMRC’s conclusions and calculations

For regular importers, UK Customs audits are often an unwelcome intrusion into their business records, taking up valuable time and sometimes resulting in demands for underpaid duty.

In fact, most Customs audits result in duty demands which can go back over a three-year period, so the sum demanded is usually significant. This is of course appropriate – if the demand is correct and the payment is actually due. However, some organisations receive a demand from Customs and simply accept and pay the requested amount. This can lead to overpayments.


HMRC use Management Support Systems (MSS) data to select their audit target companies. MSS reports contain all the data declared at import, by or on behalf of a company, using its VAT registration number. This gives HMRC a complete picture of every declaration made, and is a useful tool for spotting anomalies in an importing pattern which may require further investigation.

Prior to an audit, HMRC usually contact a trader and ask for further documentation to be made available in relation to a number of specific Customs entries. These are not random selections – they have already been identified as being unusual by comparison with other entries, where a different commodity code or customs procedure code has been used, for example.

A Customs audit is much more than just an official health check of customs compliance; it is the starting point of what could become a very intrusive investigation, often based on initial assumptions gained from a spreadsheet report. Worse still, these initial assumptions are often not fully investigated, but are followed through with a demand for underpaid duty, with little or no legal basis.

Why should a challenge be considered?

Around 30% of duty demands which are challenged are either overturned or reduced. However, only 3% of demands are actually challenged. Some might conclude that this means 97% of Customs demands could be correct, but somehow this seems unlikely (there are of course instances where demands are correct, and should be paid).

A very recent example shows that HMRC issued a demand for underpaid duty because royalty payments made by the importer had not been included in the declared import value. The organisation paid a six-figure sum without question, but analysis of the facts afterwards quickly showed that the demand had been miscalculated, and the sum due should have been much smaller – a four-figure sum.

While these figures may seem alarming, there is an element of trust by traders in HMRC decisions, alongside a lack of confidence in disputing a demand, for which a working knowledge of Customs procedures is a significant advantage.

Planning points

It is recommended that businesses who have received a duty demand (C18) from HMRC seek specialist advice. Using the MSS reports to prepare for an audit, or to check declarations and correct any errors before they have even been questioned by HMRC, could result in some significant cost savings.

UK businesses are able to purchase MSS reports from HMRC, which gives them access to exactly the same information as a Customs auditor. With an understanding of how to interpret the data in these reports, they can be a valuable tool in support of customs compliance procedures. Businesses can receive MSS reports each month, which enables swift detection of errors and corrective measures can be taken long before HMRC select the business for audit.

There is a process for challenging demands and decisions, but strict time restrictions apply; it is important to appraise the demand quickly and implement the next steps needed to launch a successful challenge.

To discuss this further, please contact Ian Worth or your usual Crowe contact.

UK Freeports - will they benefit business?

This article was first published on

As part of the government’s plan to establish several Freeports, the UK tax authority has recently issued guidance for businesses on operating in a freeport site. Ian Worth of Crowe UK looks at the background to this initiative, the potential benefits and the challenges going forward.

HMRC has recently issued guidance on some of the legal and practical aspects of operating a freeport site in the UK, and provided details of how to apply to do so. What have been less well publicised are the potential benefits to UK businesses of operating within a freeport and also consideration of whether these benefits can be achieved through other means.

Background to Freeports in the UK

Before exploring the potential benefits of Freeports to UK businesses, it is necessary to understand the role of a freeport area in the context of international trade.

Freeports, free trade zones and special economic zones have been in operation across the globe for many years and are intended to provide fiscal stimulus, principally for manufacturing and export businesses. Following the inclusion of Freeports in the Conservative Party election manifesto in 2019, Chancellor Rishi Sunak announced in his Spring Budget the introduction of Freeports in eight areas - East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool, Plymouth, Solent, Thames, and Teesside.

These regions have been selected as they require investment to stimulate regeneration and are a part of the UK government’s “Leveling Up” strategy. It is intended that a further four areas will be identified in England, as well as in Scotland, Wales and Northern Ireland. The first of these areas is planned to become operational in late 2021, and applications are invited by HMRC from businesses interested in locating their operations to these areas.

While it is proposed that the freeport areas will be up to 45 km across, it appears that there will be no physical control point for access to and from the freeport area.

Individual businesses within the freeport area will need to operate adequate physical site security as part of the implementation of controls on the receipt of imported materials. They must also keep accurate records to prove that dispatches are either exported out of the UK, are transferred to another customs-approved operation, or are declared for release in the UK, with duty and import value-added tax (VAT) paid.

Applicants will need approval for AEO-S (Authorised Economic Operator - Security and Safety) authorisation, which will add additional time and invite scrutiny by HMRC as part of the approval process.

Potential benefits

To date, there has been little detail provided by HMRC about the specific benefits that business will obtain through the UK Freeports initiative.

Across the globe, Freeports have generally helped to stimulate manufacturing activity and exports by removing the customs burdens associated with the storage and use of imported materials. There is no requirement to declare imports into a freeport area or to pay customs charges - the customs requirements only arise when goods are moved out of the freeport area - whether for domestic consumption, or for export.

In countries where duty costs are particularly high, operating in a freeport area can remove significant costs from operations. Elsewhere, there can be savings in administrative costs; however, it must be remembered that customs declarations and related charges - duty and import VAT - will be required for all goods which leave the Freeport area for use in the UK

It is thought that operation in a freeport area may be particularly helpful for the automotive industry, where reliance on just-in-time supplies of materials has suffered following Brexit. Suppliers can store components and materials within the duty-free confines of a freeport area ready for fulfilment to carmakers, who themselves may see benefit in operating under a freeport regime.

Duty inversion is one of the benefits available in a freeport area. This allows for imported components and materials to be used in the manufacture of a product with a lower duty rate, so that when the finished product is released into the domestic market, charges are based on the lower rate of duty.

This can be especially beneficial in countries where materials and components are subject to higher duty rates than the product manufactured using those materials, but there are very few instances in the UK where finished goods have lower duty rates than their component parts.

However, the UK customs tariff generally applies higher rates of customs duty to products at a more developed stage of manufacture, for example, clothing, footwear, cars and consumer electronics, so it seems likely that the benefit of duty inversion in the UK will be limited.

Other means of achieving those benefits

It is worth noting that in the UK the likely customs-related benefits of a freeport area are mostly already available elsewhere, through existing duty suspension (customs warehousing) or relief approvals. A freeport area may offer some simplifications not available under conventional customs warehousing or inward processing, but these have not yet been defined.

The basic features of freeport customs benefits are still closely aligned to those available through existing regimes outside freeport areas. HMRC will be keen to ensure that a business has robust controls which prevent the entry of goods to the UK economy without the relevant charges being paid.

In the UK, customs duty rates are relatively low - in most cases less than 5% of the value of the imported goods, and even zero for many goods. The fact of operating in a freeport area does not, therefore, deliver game-changing duty savings beyond a handful of industry sectors.

Whilst it is widely understood and accepted that the selected UK areas require investment and regeneration, very few businesses are likely to be incentivized to relocate there by the potential savings in customs duty alone.

It is true that import VAT need not be paid in a freeport area, and at the UK’s current VAT rate of 20% the option of stripping import VAT from a business activity may seem an attractive benefit. However, since Brexit, the UK has allowed VAT-registered businesses to postpone their import VAT anyway, so it is not physically paid before it can be recovered on a VAT return.

Additional incentives on offer

The Chancellor has, therefore, offered a range of other incentives for businesses operating in a freeport, including:

  • stamp duty land tax relief until Sept. 30, 2026
  • business rates relief until Sept. 30, 2026, for new businesses and certain existing businesses where they expand
  • enhanced 10% rate of structures and buildings allowance, providing the building or structure is brought into use before Sept. 30, 2026
  • enhanced capital allowance of 100% for investment in plant and machinery, up to Sept. 30, 2026.

Although these tax-related incentives have a limited lifespan, they may be significant for businesses looking to start up or expand into one of the freeport areas. As they are tax-related incentives, however, they may be vulnerable to change in accordance with the tax policies of the government of the day.


Following the UK’s withdrawal from the EU, the government has entered into many free trade agreements (FTAs), most significantly with the EU. The terms of these FTAs allow for tariff free, i.e. 0% customs duty, on goods traded between the FTA parties, but only where those goods 'originate' in the exporting country.

Complex rules of origin determine whether goods are eligible or not, including the extent to which “non-originating” materials may be used in a manufacturing process. Manufacturing activity in a freeport area may well be sufficient to confer UK origin status, but the FTAs have a further requirement, which presents a different challenge.

The UK’s comprehensive Trade Agreement with the EU includes a ‘level playing field’ requirement. This requires that preferential status can only apply where goods have been manufactured without the benefit of state aid or subsidy to the exporting party. This measure is intended to ensure that imported goods cannot compete unfairly against domestic production of similar goods.

At present, it is unclear whether the UK’s haste to conclude Brexit and sign multiple trade agreements may hamper the attractiveness of Freeports for businesses seeking to manufacture for export markets. There is certainly a possibility that goods manufactured in a freeport area, by a business gaining significant tax incentives, may in fact be ineligible for the tariff-free preference which drives their export strategies.

There are concerns voiced by the European Parliament and others that freeport areas attract criminal activity, in particular money laundering, smuggling and tax evasion, facilitated by the relaxation of controls. It is likely that goods manufactured in a freeport area could be subject to greater scrutiny when they are imported into other countries, which could hamper UK exports.

Final points

By incentivizing businesses to locate their activities in a freeport area, the UK Treasury may suffer loss of revenue, particularly where existing operations are relocated. The overall intention to regenerate deprived areas is a laudable sentiment, but the use of a customs simplification as the vehicle for levelling up the UK economy runs a high risk of introducing export barriers for businesses operating in a freeport area.

Questions for businesses to consider

For many businesses, there are attractive incentives on offer to relocate or establish a manufacturing operation in one of the UK’s new freeport areas. There will be ongoing customs compliance obligations to fulfil, and export markets might become more challenging, so any businesses hoping to prosper in a freeport area should consider all the opportunities and pitfalls, particularly including the following.

  • Is the business eligible for any or all of the tax incentives?
  • Is the business accredited for AEO-S?
  • Can the business comply with customs requirements?
  • Is there logistical/geographical advantage in locating in a freeport area?
  • Will exported goods be eligible for preference in other countries?
  • Will expertise need to be relocated?

There are, of course, many other relevant questions, as well as a developing landscape of information which can be navigated with specialist advice on customs, tax, property and employment professionals.

If you would like to discuss this topic further, please get in touch with Ian Worth or your usual Crowe contact.

Is there a duty reclaim opportunity on Returned Goods Relief?

Since the UK left the EU on 31 December last year, the subject of Returned Goods Relief (RGR) has been considered by many as a potential strategy to avoid customs duty on goods arriving in the UK from the EU, then returning to the EU - most notably Ireland. Problems arose, however, as one of the key criteria for RGR could not be fulfilled; there was no evidence of export from the EU to the UK. This is because while the UK was part of the EU, there was no export, just a movement of goods between EU members. As a result, EU customs duty had to be paid on these goods on arrival in Ireland.

The UK and EU have now agreed a temporary Brexit simplification to the criteria for RGR, which removes the need for proof of export for goods returning up to 30 June 2022. For goods returning to the EU:

  • they must have been in the UK at the end of the transition period
  • there needs to be evidence that they were previously in the EU, at any time before the end of 2020.

The arrangement is reciprocal, so goods returning to the UK can also benefit from this simplification, i.e. goods that were in the EU at the end of the transition period, and with evidence of been in the UK at any time before the end of 2020. As part of this Brexit simplification, the time limit for return of goods within three years does not apply.

Where goods are returned following export which took place on or after 1 January 2021, the full conditions of RGR must be fulfilled.

For goods returned since 1 January, which have been unable to claim RGR because no export evidence exists, this agreed Brexit simplification means that it may be possible to reclaim the duty paid, whether in the UK, or in EU countries.

To find out if your business can make a duty reclaim, please contact Ian Worth or your usual Crowe contact.

Case studies

Retrospective duty reclaim of over £500,000

Retrospective duty reclaim of over £500,000

Tinsley Bridge Ltd (TB) is a Sheffield-based manufacturer, using imported steel bars to make anti-roll bars for truck manufacturers, predominantly in Europe, had been paying large sums of steel safeguard duties on their imports of steel bars.

The challenge faced

Steel safeguard duty is a charge of an additional 25% on certain steel products imported into the UK, intended as a measure to protect UK manufacturers against a surge in imports. In TB’s case, the quality of steel bar needed was not available from UK manufacturers, however its imports were still caught by the measure.

This particular measure allowed some respite in the form a quota allowance, whereby a predetermined quantity of steel product could be imported free of the safeguard duty, on a first-come first-served basis. Inevitably, the quota was quickly exhausted, and as they operate within a Just-In-Time supply chain, TB could not import all of their required bars at the start of the quarterly quota period, and this quickly left them exposed to 25% safeguard duties for subsequent imports in the quarter.

What did we find?

From discussion with TB, it was apparent that their truck manufacturing customers were based outside the UK, necessitating the export from the UK of their finished anti-roll bars. This developed into exploration of whether Inward Processing (IP) might be beneficial. However, TB informed us that they had previously been told by a government representative that they were not eligible to use IP, and therefore hadn’t explored this further.

IP is a procedure which allows for the relief of import charges on goods which undergo a qualifying process, with the finished product being subsequently exported. By using IP, UK customs charges are avoided on product which does not remain in the UK.

Resulting actions

We went away and obtained confirmation that IP could be used not only for relief of conventional customs duty, but also for other measures, including anti-dumping duty and, importantly, safeguard duty. Seeing no other obstacles for IP, we helped TB to apply for IP, at the same time seeking an effective start date 12 months retrospectively.

When the IP approval was granted, with the requested retrospection, we then set about reclaiming the duties paid over the previous 12 months. This required collaboration with TB to compile the necessary evidence that the processed steels bars had been exported, with an audit trail back to their original imports. The duty repayment claim amounted to over £500,000, and following a couple of verification questions from HMRC, was paid in full to TB.

TB now has the ability to avoid use of the quota on all its future imports, and can use its IP approval to avoid the impact of any future changes to the steel safeguard measures.

Mark Webber, Managing Director at Tinsley Bridge Ltd, commented that:

“Crowe’s support has been crucial in securing this duty refund and setting us up for future savings, and we have been very happy with the quality of their work."

For further information on steel safeguards and Inward Processing, please contact Ian Worth or Jamie Mcleod.

Anti-dumping duty demand - UK manufacturer

Anti-dumping duty demand - UK manufacturer

£130,000 recovery and significant savings going forward

A typical Customs audit often results in a demand from HMRC for underpaid customs duties. The case study set out below highlights the value of professional support for importers subjected to audit of their customs declarations by HMRC.

The business

A UK manufacturer of specialist building materials that uses a range of imported materials in their manufacturing activity. The majority of their goods are exported to customers in the EU and also to other countries further afield.

Why they needed help from Crowe’s Customs team

A ‘routine’ audit by Customs identified that a number of imports of steel cable from China had been misclassified, and resulted in a demand for payment of anti-dumping duty of just over £25,000. The client asked Crowe’s customs team for advice.

For the imports subject to HMRC’s enquiries, the items in question were subject to anti-dumping duty at 60.4%. We confirmed this by an analysis of the classifications of a wider range of products imported by the client, and advised the client to accept the conclusion of HMRC’s audit and to pay the demand. At the same time, the client amended its import procedures to ensure the correct commodity was declared on current and future imports.

However, our analysis also identified an additional misclassification of zinc components, which had erroneously been declared as articles of steel. This meant customs duty had been paid as if the items were steel, when the duty rate for articles of zinc is 0%. We then obtained details of all imports made where duty had been overpaid on zinc components, and submitted a duty repayment claim, totalling almost £130,000, which was accepted and paid by HMRC.

Further potential

The story doesn’t end there. Since 1 January 2021, the UK is no longer part of the EU, so our client’s export activity now includes its sales to EU customers. This means that the majority of its imported components are subsequently exported outside the UK, following manufacturing activity here. Consequently, relief from customs duty (and anti-dumping duty) is available for imports of components and materials used in the manufacture of items subsequently exported. We are currently working with the client to apply for inward processing relief.

We have also engaged in discussion with the UK Trade Remedies Authority in connection with a review of the requirement for anti-dumping duty on products imported where they cannot be sourced from UK manufacturers. Since Brexit, the UK has “carried over” many EU anti-dumping measures, many of which have little or no relevance in the UK, as they concern goods which are not manufactured in the UK, and thus no protection of UK industry is necessary. A successful review could result in the removal of anti-dumping measures in the UK, possibly back-dated to the UK’s departure from the EU on 1 January 2021, giving rise to further duty reclaim opportunities.

What was achieved

In this particular case, Customs’ auditors were correct in their conclusion that anti-dumping duty had been underpaid by £25,000, however, by seeking professional support our client was able to recover £130,000 and is now going through the steps for inward processing relief authorisation, which will deliver significant savings going forward – around £150,000 a year.

Customs valuation error

Customs valuation error

£120,000 repayment approved

One of our audit team raised a question regarding a large customs duty demand which a client had paid following a customs audit two years previously. Crowe’s Customs team obtained the correspondence between the client and HMRC, and details of the duty demand issued.

Why was the customs duty demand raised?

The basis of the demand was that royalty payments had been made by the client to its parent company in relation to goods imported into the UK from its overseas parent. These royalty payments represented additional value to the goods, which had not been declared at the time of import. NB it is a common occurrence that royalty agreements result in a subsequent payment after goods have been imported – in effect the invoice value of the goods at the time of import is merely provisional, however, there is no straightforward mechanism to declare this and follow up with an appropriate adjustment. It is also the case that not all royalty payments are dutiable, but in this particular case the royalty payments met the conditions for liability to customs duty as they were directly related to the goods which had been imported.

How was the error made?

Analysis of the correspondence quickly revealed a huge error by the HMRC audit officer in their calculation of the additional duty due. They had established that royalty payments of £122,160 had been made, and had also established that no duty had been paid in relation to these payments. The goods in question were subject to a full customs duty rate of 4%, however, the HMRC officer then made a very basic error and instead of raising a demand for 4% of the royalty payments, they raised the demand for the full amount, ie £122,160.

We then reconstructed the duty demand calculation, which revealed further errors, in that some of the goods on which royalties had been paid were free of duty, as they fulfilled preferential origin rules – this meant that any additional royalty payment in relation to these goods would be dutiable at 0%.

Our recalculation determined that the correct additional liability was only £625.

Duty demands from HMRC can be challenged within 30 days of their issue. Clearly this route was no longer open, so we set out our case and presented an application for duty repayment to HMRC, with the expectation that a refusal to repay would then be an appealable decision in its own right, which we would then address using the reviews and appeals process.

A response from HMRC’s duty repayment team was slow in coming, however, we have now received confirmation that repayment has been approved for £121,535, which is welcome news for our client.


The take-away message from this case study is that HMRC Customs audits do not always deliver a correct outcome, and challenges can often be successful. Any business receiving a duty demand following a customs audit can discuss their options with their usual Crowe contact, or directly with the Crowe Customs Team.

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The current issues to be aware of for businesses and organisations importing and exporting goods to and from the UK. 
How VAT is accounted for e-commerce sales in the EU and the UK. 
The VAT and Customs considerations, looking back at the big impacts and learnings from the last year since Brexit took place.
We shine the light on recent developments and common risk areas and common risk areas.
Issues being faced on a day-to-day basis by many businesses involved in importing and/or exporting since Brexit.
EU VAT e-commerce rules: guidance, best practice, and examples since the new rules have applied.

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