New customs rules: What small businesses need to know

New rules that came into force on 1 January 2022 mean you must meet full customs requirements when importing or exporting goods between the EU and Great Britain.

Naturally, as a small business, you might have some questions about the changes to the customs rules. Here's a breakdown of the new rules and what they might mean for you.

Full customs declaration at import

Before the rules changed, you could delay submitting a customs declaration for 175 days before the point of import. You were also able to delay any customs duty and import VAT payments during that same period.

Now, however, you must submit a full declaration or a simplified declaration (if you're authorised to use them) for all goods at the time you bring them into the UK. That applies to all goods except non-controlled goods imported from the island of Ireland (at least for now).

Import VAT and customs duty are now due immediately

Import VAT and customs duty are now charged at the time of import. You can delay your VAT payments until your next VAT return, but you must make this clear in your customs declaration that this is what you want to do. That way, it's recorded correctly on the system.

Duty deferment account

You can also apply for a duty deferment account to delay paying the customs duty rather than making the payment immediately. That will allow you to defer payments until the 15th day of the following month.

Again, you must record this correctly on your declaration. (Let your customs broker or agent know if they're submitting declarations on your behalf.)

Approval for simplified declarations

You can use the Simplified Customs Declaration Processes as long as you (or your customs broker or agent) have authorisation to do so. At the time of import, you make a simplified declaration and then a supplementary declaration at a later date.

What are simplified declarations?

A simplified declaration is a more streamlined version of the full customs declaration you'd make at the time of import. Because you're providing less information, it speeds up the process, potentially avoiding delays at ports and giving you the time to gather all your data together.

When you have the rest of the information ready, you have until the fourth day of the following month to make a supplementary declaration and give HMRC everything else it needs.

There are two types of simplified declaration:

• Simplified declaration (SD) procedure: Where you make a simplified frontier declaration electronically at the time of import. You'll need the customs procedure code, commodity code, unique consignment reference, consignee and consignor information and so on.

• Entry in declarant's records: Where instead of entering the declaration onto the customs system, you add it to your own records (with all the same information as in the SD procedure). To be approved for this method, you'll need to show how you'll keep these records.

You can only apply for one of these, and to do so you use the online form C&E48.

With both procedures, you must then submit your supplementary declaration via CHIEF or CDS (HMRC's electronic systems) by the fourth day of the following month.

Your customs duty and import VAT payments will become due by the 15th day of that same month and taken by direct debit through your duty deferment account.

It's recommended you leave 60 days for your application to go through, although it can sometimes take longer.

How do I make a simplified declaration?

To make a simplified declaration, you (or your customs broker or agent) need to be authorised to use this service. You must apply for this authorisation and there are certain conditions you have to meet. For example, you:

• must be 'established' in the UK

• have a good record of complying with customs regulations

• must show that:

  • you'll be able to keep to your duty deferment limit

  • you're ready to submit supplementary declarations (that you have the correct software, for instance)

  • you have procedures in place to prevent you bringing in prohibited goods

The authorisation process can take a little time, so be aware of that before you apply.

Pre-notification of phytosanitary or sanitary products

If you're bringing in any phytosanitary or sanitary products – for example, products of animal or plant origin – they need prior notification via the new IPAFFS system (or the existing PEACH system, if you're already using that).

You'll need an IPAFFS reference to show that you've pre-notified goods, and you must add this reference to your customs declaration so HMRC can tie the information together.

Rules of origin evidence

You must now be able to prove the origin of the goods you're supplying.

It's no longer enough to say 'UK origin' – you need to have, for example, a suppliers' declaration to prove that the products come from the UK so you can claim zero duty when the goods are imported into or exported from the UK.

Safety and security declarations on imports

While safety and security declarations have applied to exported goods for some time, from 1 July 2022 they'll be required for imports too. They are needed so customs can assess the risk around goods entering the UK from the EU.

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