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HMRC chasing forwarders for outstanding duty and VAT

Aug 3, 2023 |

Our trade body, the British International Freight Association (BIFA) has advised members, including Metro, to be cautious while acting as ‘indirect representatives’, as HMRC have been taking action against UK intermediaries in relation to valuation issues, under-paid duties and VAT since 2021.

BIFA said freight forwarders had been targeted by HMRC in relation to valuation issues surrounding imports into the UK, often eCommerce traffic, that were cleared on a delivered duty-paid (DDP) basis.

There are very real risks in acting as an indirect representative and our customs team would be very wary of involvement outside our customer portfolio, but Brexit has triggered an increase in forwarders offering indirect representation, many of whom have not conducted proper due diligence.

Indirect representation (IR) offered an additional revenue stream, but the UK-based entity making customs declarations to HMRC on behalf of non UK-established importers is wholly liable for taxes and duties owed.

BIFA has been vociferous in warning against IR and despite numerous articles on the dangers of being an indirect customs representative, with no other entity established in the UK, it is the agent who has acted on an indirect basis that is liable for under-paid duties and VAT, often due to inappropriate use of Postponed VAT accounting.

When supplying goods under DDP Incoterms, the shipper is responsible for customs clearance obligations and payments of import duties and taxes in the buyer's country.

Foreign-based shippers can qualify for UK VAT and EORI registration without being GB domiciled and once registered they can engage a GB Intermediary for the clearance, on direct or indirect representation.

Any import customs entry undertaken on a client’s behalf, as an indirect customs entry, leaves the intermediary jointly and severally liable for the duty and VAT exposure, while the client is solely responsible under direct representation.

Metro offer guidance for imports into the UK and export flows to the EU with R42 process, and other fiscal representation for other clearances where the goods remain in France or for indirect entries in most popular European destinations.

Metro can health-check your import and export processes to ensure you are not in risk of customs penalties and in full compliance with EU and GB legislation.

Metro’s CuDoS brokerage platform, simplifies and automates customs declarations, with our dedicated team of customs experts ready to support businesses of all types and sizes.

The CuDoS solution uses the latest artificial intelligence (AI), machine learning (ML) and automation capabilities to optimise the data capture and customs declaration processes, to create a compelling 20% reduction in headline costs and 25% increase in volumes.

Metro’s CuDoS is now achieving an SLA of 98% on two hour turnaround times, from customer submission/request through to document delivery, with 96% of declarations processed and submitted to HMRC within 30 minutes at a 99% processing accuracy.

To learn how we can simplify and automate customs declarations for your businesses, please EMAIL Andy Fitchett to review the options.

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Post-Brexit food checks deferred for 5th time

Aug 3, 2023 | ,

The Financial Times has reported that Brexit checks on food and food products coming to the UK from the EU, that were due to start at the end of October have been delayed by the government for the fifth time, due to fears over inflation.

The decision to suspend plans to enforce the controls, which have been applied in the other direction to British exports to the EU since January 2021, is due to inflation fears and will be announced imminently, according to the Financial Times.

Press reports said it was a “Treasury purge” of all changes that would cause disruption to the supply chain, given the sensitivity of the food market to price increases in the current economic climate.

Under the proposed controls that were due to be introduced in October, EU exporters of food products to the UK would have required “export health certificates” costing several hundred euros each and requiring a physical sign-off by a veterinary surgeon.

The food industry warned last June that plans to charge a flat-rate inspection fee of up to £43 on each consignment of food coming from the EU would drive up food prices, with the government estimating total additional costs of EU controls at £420mn a year.

The government has previously cited the COVID-19 pandemic and the war in Ukraine as reasons for delaying the new checks.

On 5th April, The Border Target Operating Model: Draft for Feedback was published by the Cabinet Office, it gave a clear time line for import controls on EU originating food products.

31st October 2023 - Export health certificates and phytosanitary certificates are introduced for medium risk animal products and plant and plant products imported to GB from the EU.

31st December 2023 - permanent waivers introduced from the requirement to submit Safety and Security declarations on certain categories of low-risk movements - fish which have been caught in UK territorial seas and landed outside of the UK.

1st January 2024 - Documentary checks and physical and identity checks at the border to be introduced for medium risk animal products, plant and plant products imported from the EU. Controls will also be applied to RoW low risk products, and pre notification no longer required for low risk plants/plant products.

31st October 2024 - Safety and Security declarations are required for EU imports. Alongside this, use of the UK Single Trade Window will remove duplication across pre-arrival datasets where possible.

A new timetable has not yet been signed off by ministers, but the start of the new regime is expected to slip into next year. It was originally supposed to have started in July 2021.

The current regulations for movements of foodstuffs remain unchanged, Metro as ever will be here to offer full support for all your import and export documentary needs.

Metro are at the forefront of customs brokerage solutions for the food and drink industry, with our automated CuDoS declaration platform and dedicated team of customs experts, reacting swiftly to any changes in the UK’s trading regimes.

To learn how we can simplify and automate customs declarations for your businesses, please EMAIL Andy Fitchett, Brokerage Manager, to review the options.

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Metro is SMEs resource to deal with post-Brexit paperwork

Jul 4, 2023 | ,

Time-poor SMEs are being forced to outsource their post-Brexit paperwork, which is adding cost and time pressures, but Metro’s digital CuDoS platform offers an easy solution.

The  Federation of Small Business (FSB) Customs Clearance report found SMEs are often forced into using high-cost intermediaries because they do not have the internal resources to handle complex post-Brexit customs paperwork themselves.

The report revealed that less than one in ten SMEs have a dedicated staff member or team for customs procedures, with over a third of businesses saying that extra intermediary fees were posing a challenge to international trade because they increase their supply chain costs. 

The research also revealed that four in ten SMEs do not have the expertise required to handle customs declarations, while over half said they have outsourced this function to help free up their time for other tasks.  

FSB policy chair Tina McKenzie said: “Unlike big corporates, most small firms don’t have the specialised resources needed to deal with complex customs procedures, so they’re dependent on intermediaries. [But] Smaller businesses may also have to bear higher costs as they are unable to commit to large volumes and they are less able to reach fixed price agreements or to negotiate with couriers.”

Metro are at the forefront of automated customs brokerage solutions, simplifying and automating customs declarations for importers and exporters, with our CuDoS declaration platform and dedicated team of customs experts ready to support businesses of all types and sizes.

The CuDoS solution uses the latest artificial intelligence (AI), machine learning (ML) and automation capabilities to optimise the data capture and customs declaration processes, to create a compelling 20% reduction in headline costs and 25% increase in volumes.

Metro’s CuDoS is now achieving a SLA of 98% on two hour turnaround times, from customer submission/request through to document delivery, with 96% of declarations processed and submitted to HMRC within 30 minutes at a 99% processing accuracy.

The targeted business support provided by CuDoS reduces the cost of trade and is helping to unleash the export potential of small international traders as well as encouraging more businesses to sell overseas.

To learn how we can simplify and automate customs declarations for your businesses, please EMAIL Andy Fitchett to review the options.

Metro continues to invest in MVT and CuDoS innovation in 2023-2024, with more exciting releases planned.

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European division continues expansion

Jun 21, 2023 | , , ,

Five months ago European Director, Richard Gibbs, outlined his vision for Metro’s road freight and short sea services, in developing the business’ capability across the EU. Today, he updates us on his progress and next priorities.

“Since the start of the year we have been working very closely with our continental partners and carriers to add new ‘lanes’ to our transport network, extending the scope of our regular services, alongside our daily EU-wide FTL and LTL services.”

“At the same time we’ve been increasing our operational capacity, by growing the European team and adding new freight centres and groupage hubs in Leicester (Desford) and Manchester.”

“Service design has a been a primary point of focus, but so too has customs compliance solutions and advanced technology, to deliver visibility, control and supporting services.”

“The development of the CuDoS customs platform by our technical services team and the digitising of customs compliance has been a ‘game-changer’ for our customers and particularly those trading with Europe.”

“Using Artificial Intelligence and Machine Learning CuDos optimises data capture and customs declaration processes, with an SLA of 98% on turnaround times of under two hours and record turnaround speeds under 8 mins.”

“Since Brexit, the UK is considered as a third country and transactions with the EU are no longer intra-community, but considered as imports and exports, which means that VAT and duties need to be paid in the country of import, creating a trade barrier for many exporters.”

“Some EU importers are comfortable arranging import clearances and our standard T form services accommodate these movements, across single and multiple borders. However, some EU importers do not want to arrange import clearances, which is why we have created a range of options that allow UK exporters to complete transactions with their EU customers simply and seamlessly and even as if it were a domestic transaction.”

“The options are varied and can be adapted to suit specific transactions and customer relationships. They are listed below, but really require further explanation, which we will provide in a future post - or you can EMAIL me now.”

The Delivered Duty Paid or ‘DDP’ Incoterm means the exporter takes responsibility for the transport of the goods and customs formalities in the UK and EU, by becoming the ‘Importer of record” in France (or another member state) taking the burden away from your customer.

 - Regime 42 is for DDP transiting France for another EU destination. 

 - Regime 40 is for DDP shipments where the exporter has a French VAT number enabling clearance in France for free circulation in the EU.

 - DDP Light is where the consignee authorises their VAT number to be used as the importer of record but any duty is paid by the exporter. 

To learn more about our expanded European capability, including our CuDoS and EU/DDP solutions EMAIL Richard Gibbs. 

Category: Customs

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