Are you at risk?
HMRC is paying particular attention to businesses which import and export now that the UK has left the EU and the volume of regulations to which a business must adhere has expanded beyond all recognition.
Whilst in the EU, the majority of goods entering and leaving the UK did not require any specific Customs clearance, but this has now changed so that every item is subject to being ‘cleared’ by a Customs agent. Whilst the agent is paid for each clearance by the business, any incorrect declarations they make are down to the importing or exporting business, in the eyes of HMRC. It is not possible to shrug and say ‘nothing to do with me, speak to my agent’.
Post importation audits are one of HMRC’s main means of policing imports and they are on the increase.
They are usually based on the wealth of information they hold about what the business has imported. The checks themselves can be initiated by letter or phone and are usually focussed on finding out everything there is to know about a handful of carefully selected transactions. The documents HMRC will ask to see include:
- accounts
- bank records
- import and export paperwork
- contracts
- goods specifications
- orders, delivery notes and other miscellaneous commercial communications
The areas which HMRC are checking include;
- Customs Duty
- Import and Export Licences
- Import VAT
- Community Transit
- Adherence to Inward and Outward Processing reliefs
- Commercial and official evidence of export
They know where to look! HMRC’s approach is highly targeted at areas where they suspect (or even know) that errors have been made and tax may be due.
Any ‘back-taxes’ will be demanded at the completion of the audit as well as interest and penalties, which are geared to the tax itself with a percentage applied based on the degree of care taken (or alternatively, lack of care). And that’s not all, if HMRC suspect that any comments or statements made to them of being deliberately untrue then HMRC will normally consider initiating criminal prosecution, so great care must be taken when dealing with these audits.
If you would like to arrange for a Customs health check please tell your usual Just VAT contact or fill out the enquiry and we will get back to you to establish what you need and provide a quote.