Customs duties and the risk of underpayment are some of the trickier aspects of customs compliance. With goods constantly being shipped, and different tariffs and commodity codes applying to various products, keeping on top of duty payments can be difficult for many traders.
Using innovative tools like MyCustomsInfo, a new online service made available by the Chartered Institute of Export & International Trade, helps businesses identify potential underpayments of duties.
Today, we’re answering some of the most commonly asked questions on customs duties, including how to understand more about your commodity codes, and looking at how MyCustomsInfo can help businesses identify underpayments of customs duties.
Q: How likely is it that I am overpaying or underpaying my customs?
A: It’s quite common for businesses to unknowingly pay incorrect customs duties. Often this is only realised during HMRC audits, at which point a business might be fined for not having paid the correct amount due.
Firms should treat over and underpayments of customs duties as a constant risk and monitor it throughout the year.
Software solutions such as MyCustomsInfo have tools that analyse customs data and flag discrepancies in their payment for staff to check. This is a valuable tool in helping companies correct any underpayments and recover any excess payments made to HMRC.
Q: How important is it that I use the correct commodity code?
A: Commodity codes are one of the basic, fundamental parts of international trade. When it comes to customs payments, correctly classifying the goods, and ensuring the correct commodity codes are applied, is vital for accurate duty calculation.
Choosing the correct commodity code is an important factor in reducing risk and providing the most accurate information to customs officials.
Using technology well is important to ensure you pick the right commodity code. A good piece of customs software should have tools and consultancy support, to help businesses pick the correct code.
Q: Should I keep comprehensive records of documents for customs purposes?
A: Yes, keeping documentation is a vital part of surviving HMRC audits. It is also part of the special procedure authorisation when HMRC grants a trader an EORI number that the business maintains records properly.
Customs officials will go back up to seven years in the event of a VAT audit, or four years in the event of an audit of a company’s export and import activities, checking compliance with regulations.
It’s also an important part of various special customs procedures or standards, such as Authorised Economic Operator (AEO), many of which make it easier to move goods across the borders. It’s really important to have a robust system and process in place to enable efficient and safe storage of documents for up to 84 months.
Q: How can I keep an eye on regulatory changes?
A: Customs regulations and tariff codes change frequently, impacting decision-making processes.
Major government events including the Autumn Budget and Spring Statement, as well as periodic changes to customs rules, can have implications for customs duties and rates of payment. Keeping on top of these is important to make sure that you aren’t under or overpaying.
The correct piece of technology should provide updates, giving businesses all the information they need to stay compliant and avoid HMRC penalties.
Q: How can automation support my customs processes?
A: With the advance of AI and other technologies used in customs, automating business processes is becoming a good way to reduce costs in international trade.
Streamlining this automation process is easier with a good use of technology that has inbuilt automation solutions help with things like data extraction and streamlining of processes.
Q: Where can I go to get advice on complex issues?
A: When it comes to customs, getting the right expert advice and guidance can make all the difference.
MyCustomsInfo is fully integrated into the Chartered Institute’s consultancy services, giving you access to a network of customs specialists across a wide range of topics.
For challenging cases, expert support is invaluable. By combining MyCustomsInfo with our consultancy service, specialists can review your data, identify risks, and provide tailored recommendations – empowering your business to make informed decisions and gain confidence in customs compliance.
Don’t leave compliance to chance – take control today. Contact us now to discover how MyCustomsInfo can transform your customs processes and protect your business, get in touch with us here.
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