Basic import requirements
The basic obligations are to
- identify the commodity code
- pay VAT
- complete VAT return
- register with CHIEF
- clear goods imported using CHIEF
- pay import duty where applicable
- check if licenses required and obtain the requisite licence
Importers are usually able to reclaim import VAT. HMRC may allow approved importers to have to guarantee the duty only. They must have a good record in VAT compliance This is simplified import VAT accounting (SIVS).Where approved the amount of the guarantee may be reduced.
On arrival in the European Union customs territory, goods become subject to EU customs law at the nominated point of entry. They may become subject to customs control. The custom status may be changed. This may include release into free circulation or another procedure such as e.g. entry to a free warehouse or free zone. Goods to be released of free circulation must be notified to the customs authorities.
Safety & Security Legislation
Security legislation requires the advance notification of goods entering or leaving the European Union by way of an entry summary declaration or an exit summary declaration. Importers must furnish their economic operator registration and identification number (EORI).
The EU introduced Safety and Security legislation as and from 1 January 2011 requiring goods which arrive in the EU to be declared to the office of first entry. The member state’s import control system (ICS) is part of the EU wide automated import system.
This entry is distinct from the obligation to make a customs declaration. This is normally done in the UK through CHIEF the customs handling of import and export freight system in the United Kingdom
The pre-entry declaration obligation is on the carrier who may delegate it to the importer or his agent. An entry summary declaration is made.
The UK’s import control system gives the carrier or other person a movement reference number for the goods. This is generated automatically. The movement reference number is submitted to the first point of entry in the European Union. This includes details of the consignment, the role of the trader, the vessel or aircraft and the proposed route into or across the European Union
This information is then used from a risk control perspective in accordance with common EU criteria. Information may be passed to subsequent ports and airports; so-called offices of subsequent entry in contrast to the office of first entry.
All messaging is electronic. The transport operator/carrier is responsible for ensuring the entry summary declaration is given.
Arrival; Approved Places of Import & Post
Customs goods must arrive at a designated place in the United Kingdom and be presented to customs, in the absence of facilitation which does not so require. Presentation requires notification of HMRC of the arrival of the goods. This is generally by SAD generally undertaken electronically
Ports are defined by law and include adjoining waters within defined limits. HMRC appoint boarding stations. A report is made by every ship arriving from outside the UK clearing goods which are brought from outside the UK.
Technically the time of importation is when the ship arrives within the bounds of the port. The goosd must be landed at an approved wharf or alternative arrangements must be made with HMRC.
HMRC appoint custom and Excise stations for the examination of goods imported by land through the Northern Ireland land border.
Goods may be imported by post with a customs declaration attached. The addressee must make an entry in respect of the import if required to do by HMRC. Otherwise, the package may be returned to the sender or destroyed if not delivered and accepted with the required entry
A full declaration is required for all postal imports over £2,000 coming into free circulation into the European Union. This requires a completed single administrative document whereby the importer declares to certain customs procedures. A full import declaration may be required where the potential duty exceeds €7.
Single Administrative Document
SADs can be completed through CHIEF, the customs handling of import and export freight system.
Goods are declared for free circulation (for another procedure) through making the SAD declaration. It may be made in advance but it is only ultimately made when accepted after presentation post-importation.
The declaration requires the correct classification under the UK integrated tariff code this is based on the EU TARIC. This is a 10-digit code with certain further digits applicable to some sub-classifications. The code determines
- the applicable rate of duty
- quota arrangements
- preferential duty
- requirement for licences
- excise
- anti-dumping duties
HMRC may issue a non-legally binding classification advice. They may on request issue a binding tariff information ruling (BIF). This is binding throughout the EU for up to 6 years. The may be costs incurred where expertise, sampling or analysis must be employed or undertaken by the authorities.
Transit
Community Transit allows customs duties, excise duties and VAT to be suspended until the goods reach the point of destination within the European Union or departure in the case of exit from the EU. It allows transit through the EU without a change in the custom status of the goods.
The computerised transit system is used for community and common transit declarations.
Authorised economic operators may obtain approval to start movements at their own premises or end movements at their own premises.
Goods not in free circulation may move only under customs control for example under community transit.
Custom Approved Treatments
Customs approved treatment or use may include
- placing under a customs procedure
- entry into a customs-free warehouse
- re-exportation
- release for free circulation
- inward processing
- inward processing
- outward processing
Goods must be presented to customs using a computerised system linked to HMRC or the lodgement of a form C1600 at the designated customs office. Customs advise date by which they must be entered.
Temporary Storage
Goods may be subject to the temporary storage procedure pending presentation to customs or assignment to an approved customs procedure. The goods must not be removed without customs permission. They may not be dealt with in a way that changes their status Individual packages may not be opened other than for essential examination and preservation purpose
Temporary storage facilities must comply with HMRC requirements. They must be
- physically secure
- suitable
- have sufficient record-keeping
- meet Occupational Health & Safety requirements
The may be temporary storage facilities within a port or airport or within a certain distance of it there are
- transit sheds
- remote transit sheds
- inland clearance depot
- inland rail depot
Some goods may not be removed to temporary storage before they have been examined in particular
- animals and animal products
- plant and fresh produce
- endangered species
- veterinary products
TRACES & PEACHES
The trade control and export system (TRACES) is used to provide health certification and track consignments of animal and animal products. It is a computerised system to facilitate documentation in relation to controls on the food chain.
The equivalent procedure for electronic application for certificates vegetables and plants (PEACHES) applies in respect of fruit and vegetables and plant movements from outside the EU. They must be accompanied by a phytosanitary certificate. It allows for completion of returns online it can check for and identify errors in entry.
Submitting Goods to Customs
Importers may submit import/export/transit or pre-arrival declarations to HMRC through
- community systems providers who offer the relevant services.
- the excise movement control system
- national export system
- community transit system
- hardcopy declarations
CHIEF is linked to community systems providers which are independent trade systems that serve numerous carriers, freight forwarder, transit sheds et cetera. Community systems providers track the movement of goods. This facilitates risk control and identification of goods requiring examination or low-risk fast-track.
In EU Customs Territory but outside VAT Territory
The importation of what are otherwise community goods which are within the customs territory but not the VAT territory of the EU must be presented to HMRC. The areas concerned are a number of territories including in particular
- the Channel Islands
- Canary Islands
- Martinique
- Reunion
Almost all single administrative documents are returned online. The single administrative document is a standard international customs document recognised in exporting and importing throughout the world.
In the case of duty-free goods, a commercial invoice copy, commercial document or party filled SED may suffice.
Customs Debt & VAT
The customs debt comprises
- import duties
- CAP charges
- anti-dumping duties
that may become payable on import.
Import VAT also arises. An entry is required within 45 days of the summary declaration and 20 days in other cases where no import declaration is required.
Liability arises when the aircraft or ship arrives within the bounds of the port or at the airport. In the case of goods entering through the Northern Ireland border, they arrive when they are brought to a customs and excise station
The declarant is the person or entity who makes the declaration in relation to the goods. They are usually persons established in the EU or their representatives. The person making the declaration is normally liable for the duties, VAT et cetera. See above regarding agents and representatives who may be jointly liable or in some cases exclusively liable.
AEO Status
Businesses may be given authorised economic operator status for customs (AEOC) simplification or AEO status for security and safety (AEOS). There is an EU database which permits confirmation of the status
AEOC status is held by a variety of actors in international trade, including manufacturers, exporters, customs agents and carriers. It is necessary to show compliance with
- tax and other obligations
- record-keeping standards
- financial solvency
- professional qualifications and/or practical competence in the activity.
Businesses that hold the requisite status may benefit from a faster application for customs facilitation authorisations reductions or waiver of guarantees.
Businesses must have AEOC to obtain
- waiver in making entry into current records
- moving goods in temporary storage between states
- reduction in guarantee amount
- completing self-assessment (when implemented/available
AEOS status is subject to the same requirements save those as to qualifications/practical experience.
They must show compliance with
- physical integrity/control access
- logistical processes
- personnel and identification of business partners
Holders of AEOS status qualify for fast-tracked consignments through customs control and reduced requirements for pre-arrival pre-entry entry summary declaration and exit summary declaration.
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