To assist clients in the event of a Customs Audit, we have highlighted below some of the key documents and information HMRC will want to see in order to check that declarations have been undertaken correctly and to prove that there is a clear audit trail.
The main areas of compliance that HMRC will want to examine are:
- Evidence of export
- Tariff classification
- Origin and preferential origin (import)
- Preference (export)
- Customs valuation
- Use of special procedures such as Inward or Outward Processing etc
For Import Audits: HMRC will want to be able to see a full Audit Trail, to ensure that:
The custom value used is correct and includes any additional costs that should be factored in, that the commodity codes used to declare the goods are right, that the correct VAT and Duty has been paid. In order to examine this, HMRC will want to see purchase orders, commercial invoices, proof of payment, insurance policies, evidence of Incoterms used and currency arrangements. They will also want to see the Transport Documents and most importantly Customs Entry Document C88/E2 and C79 Vat reclaims.
They will also want to see the Transport Documents and most importantly Customs Entry Document C88/E2 and C70 Vat reclaims. HMRC will examine how a business has chosen its customs representative if they have outsourced the declarations to a broker or freight forwarder. Have the given authority to the broker to act on their behalf through a Direct Representation Letter, does the Agent have AEO (C) status, which means they have been audited by HMRC. Therefore HMRC may also want to see what instructions are being sent to Agents when conducting customs clearances on behalf of your business and what checks are carried out and how errors are acted upon.
Post Brexit from January 2021 customs will affect all shipments to and from the EU – therefore it is very important to ensure you are doing this correctly.
If you need any further help and support or have any questions, please do not hesitate to contact David@hooperandco.com or David@independent-freight.com who can provide an initial 1-hour review to discuss this with you in more detail. Please also note that now is good opportunity to access the Government Grants available to support businesses that need training in customs matters, to access these grants business must be established in, or have a branch in, the UK when the grant is paid and must have previously met all its tax obligations.
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