Companies that import goods into the UK or EU are being urged to prepare themselves for changes being made to customs duty arrangements next year.
From May 1 2016 the current system for import duties will be replaced by the new European Union Customs Code which will result in an increase in the financial guarantee required, additional costs in the absence of Authorised Economic Operator (AEO) accreditation, duty liability of royalty payments and changes to customs valuations.
Ian Carpenter, head of indirect taxes at Baker Tilly said: “All importers need to take action now to identify key areas of uncertainty and to consider potential risks and opportunities. Some importers will find they will need to change the way they manage their supply chain. Others will find they will need to obtain Authorised Economic Operator authorisation.
“Careful preparation is required as our recent experiences have highlighted the significant impact on margins that any mistakes in customs duty can have on a business. This can be from incorrect valuations on products leading to a deficit of duty being paid to reliefs for rejected or returned goods not being appropriately claimed.
“Many businesses successfully use import agencies to clear goods. However, whilst diligent, the speed of clearance is usually a priority and if any customs duty is due, responsibility lies with the business. It is therefore important to review your arrangements to ensure you accurately account for customs duty.”
Baker Tilly is the UK’s 7th largest firm of chartered accountants, tax and business advisers to entrepreneurial and growing businesses.