Get ready for the new Customs regime

BLOG5th Jun 2015

1 May 2016 will see the introduction of the new Union Customs Code (“UCC”). This is essentially a rewrite of the existing Code which will have a major impact on the way businesses involved in import/export of goods deal with their compliance obligations.

One of the principle aims of the new regime is to modernise Customs procedures which should speed up clearance of consignments. Online filing will therefore be a key feature. The UCC will also provide HMRC with greater powers to force businesses to comply with the rules.

In particular, HMRC will be able to require financial guarantees before they grant authorisations for Duty relief, e.g. Ship-work End Use and IPR. They will then call on the guarantee to settle outstanding Duty if a business fails to operate the relief correctly.

‘Authorised Economic Operator’ (“AEO”) accreditation will enable a business to apply for a waiver of the financial guarantees. It will also permit businesses to apply for simplifications such as the facility to move goods to and from the UKCS without formal Customs declarations. With the inception of the UCC, this facility may not be available to non-AEO businesses thereby increasing complexity and cost.

To become AEO accredited, businesses will need to demonstrate that they have robust systems in place for handling import/export movements. 2016 may seem far away but be warned that AEO applications can take a number of months to complete.

The valuation provisions will also change under the UCC such that Duty will be calculated on the value of the sale immediately before goods are cleared into free circulation. This will limit the benefit of Customs warehousing by removing the ability of businesses to base Duty on the first sale in the chain.

Businesses should now be taking further advice to ensure they are fully prepared for the new rules when they come into force next year.

For more information contact Mike Whittal, Indirect Tax Senior Manager,