MHA | Customs Compliance Audit
Customs Compliance Audit
Customs and Excise Duty

Customs Compliance Audit

Get in touch with our Customs and Excise Duty team.

For the UK, customs compliance is monitored by H.M. Revenue & Customs (HMRC) who, if they deem necessary, could request an audit on UK import of export activities.

Depending on whether the organisation is either an importer or exporter, or both, there are different risks that HMRC will be looking to test.

Customs Compliance Audits

Due to the complexities of customs legislation our Customs Compliance Service was introduced to address the shortage of customs knowledge within UK businesses. These Customs Compliance audits are designed to assess your business’ current and historical customs compliance to identify and resolve any risks which will reduce the likelihood of penalty action by HMRC.

Our audits ensure your business has the required procedures to manage compliance, whilst identifying any potential Customs Procedures which may benefit the business and provide duty savings.

Free customs compliance consultation 

We provide a FREE half-hour phone consultation for all prospective clients to discuss how their customs activities are being organised and, if an audit is progressing, identify areas we can assist to minimise any potential duty impact and alleviate any associated stress.

Our audits are completed by experienced ex-HMRC Customs Auditors who are fully conversant in customs compliance and understand the expectations HMRC place on importers and exporters.

MHA strongly recommend businesses complete period audits of its customs activities. Failure to do so could render the business at risk of substantial customs assessments for underpaid customs duties.

Top customs compliance risks for businesses

  1. Tariff Classification All imported goods must have an assigned commodity code. Often determining the correct code is difficult and the Customs Tariff is not the easiest of systems to navigate. By not ensuring the correct commodity code is identified and declared on imports, the company is at risk of unintentionally avoiding payment of the correct import duties. Depending on the imported goods, there are also risks that anti-dumping or special tariffs/quotas may be avoided by using the incorrect code. If HMRC conduct an audit they will review these imports and raise customs debts.
  2. Origin A significant risk that HMRC considers high profile due to the UK’s departure from the EU. Movements from the EU claiming ‘EU preferential origin’ will be subject to audit and the exporter can, if HMRC are not satisfied with the evidence, disallow the origin. Although the exporter will not incur customs duties, it will be subject to penalty action and the customer could be issued with a customs assessment in its country for the full customs duty. It is important for businesses to have sufficient knowledge and understanding of Tariff Preference and Origin to minimise the risk of non-compliance.
  3. Incorrect payment of customs duties By not understanding the duty liabilities of your imported goods, you may not be effectively managing your ‘landed’ costs. HMRC can issue customs debts up to three years after the import so this poses a significant risk of lost revenue, as these costs are unlikely to be transferred onto customers.
  4. Incorrect claim for Import VAT Since Brexit there has been a significant increase in the use of the DDP Incoterm. To potentially minimise their risk, the customs agents have declared the UK buyer as the importer. Buyer’s who have agreed DDP Incoterms must check to confirm they have not incurred VAT, via Postponed Import VAT Accounting, as HMRC may raise assessments for non-reclaimable VAT as the buyer is not the owner of the goods at time of importation.
  5. Lack of customs knowledge Many businesses who trade with the EU will have suddenly been subjected to additional customs controls on their cross border movements. In many cases, it was a matter of ‘get the goods through and worry about the costs later’. We recognise that there is a significant lack of experienced customs personnel in the UK and this has not gone unnoticed by HMRC who are targeting these ‘new importers’ to confirm compliance with customs legislation.
  6. Temporary imports Where goods cross borders on loan, for exhibition or testing, it is critical that the use of the correct special procedure is determined otherwise there could be a duty, or worse, a VAT liability which will not be reclaimable. For construction equipment it is key to ensure that the correct person is declared as the importer and we recognise that this requires an understanding of the customs process and negotiation with the supplier to minimise any tax risks.

Customs and Excise Duty Insight and Events

Whatever your needs, we can assist your business to ensure that it is confident that it will be ready for any HMRC Customs Audit.​

Sign up for a FREE 30 minutes phone consultation to discuss how we can help your business optimise its customs activities and safeguard against future HMRC audits.

We're here to help, get in touch.

Contact the team