Understand customs rules

HM Revenue & Customs (HMRC) is the government department responsible for administering or enforcing controls on the international movement of goods. It consults regularly with the business community, with the aim of simplifying policies and procedures to enhance UK competitiveness. However, customs rules can at times seem confusing, especially if you are a new to the import or export game.

Simplified procedures

The Customs Freight Simplified Procedures (CFSP) were introduced to keep frontier formalities to a minimum, with the bulk of fiscal and statistical data being supplied to Customs at a later date.

The main advantages for businesses are:

Certainty of clearance of your goods by Customs at the port or inland depot
Paperless trading and reduced documentation
More control over valuable documents, such as licences and preferences
Potential cash flow benefits, including:
- Lower costs through electronic submission of Customs documentation
- You may be able to choose the date of any tax points and accounting periods
- Duty and tax liabilities are based only on goods when they have been released
- Local transit movements can take place under a (limitless) guarantee waiver so there is no need to finance a standing transit guarantee

Simplified declaration procedure

Under CFSP, a Simplified Frontier Declaration (SFD) is required at the frontier. Supporting documents, such as invoices and relevant licences, must still be presented before Customs can release your goods. An electronic Supplementary Declaration (SD) giving full details of the transactions will be required at a later date.

For the entry of imported goods into a Customs Warehouse a SFD, usually in electronic form, is required at the frontier. However, no supporting documents are needed at this stage.

Local Clearance Procedure

This is where your goods move from the frontier to a designated inland premises over which you exercise control. Following a period of Temporary Storage they are released to a Customs procedure.

Community Transit

Goods arriving at the frontier must be moved to your approved designated premises under Community Transit (CT) arrangements. A SFD, usually in electronic form, is required unless the goods arrive via another member state. In these circumstances the existing CT movement can continue from the frontier to the stated destination.

Temporary Storage

Once your goods have been removed from Temporary Storage and released to a Customs procedure, an electronic SD is submitted based on the date shown in your records.

Providing other customs warehousing requirements are complied with, you may remove goods from the warehouse by inputting the details in your records. Supporting documents will need to be retained and produced to customs on request. The recorded date of removal of the goods will determine the tax point and the date for the submission of the electronic SD.

Trade statistics

Intrastat is the system for collecting statistics on the physical trade in goods (i.e. the actual movement of goods) between the member states of the European Union. The threshold changes year by year, but is currently around £250,000 and businesses that have physical trade with other EU member states which exceeds this figure, are required to provide Intrastat supplementary declarations. An Online Electronic Form is available.