UK Customs is under serious threat of losing duty revenue as a mountainous backlog of declarations grows.
At the start of the year, HMRC announced a six-month grace period for importers having to declare on goods imported between 1st January and 1st July, with the first of the delayed batch being due on the 25th of this month.
However, UK Customs looks unlikely to be able to cope with the upcoming deluge of work.
A customs agent, speaking to The Loadstar, said of the situation:: “We’re in a situation where we have maybe millions of declarations due and we have insufficient brokers to get us out of the backlog.
“We have all these importers that have not declared what they’ve imported, and shipments will fall through the system, either because the importer cannot find a broker or they cannot be bothered.
“It leaves HMRC in a quandary; one option is it may further extend the delay or maybe it will find itself missing out on a hell of a lot of income.”
Brokers clearing goods from the EU in the aftermath of Brexit have been required to apply for numerous new certifications, including the Customs Freight Simplified Procedures – the most sought after as it provides swifter clearance of goods.
However, firms have been struggling to attain CFSP approval, with some applications taking almost half a year.
Another issue is faced by brokers processing UK importers’ declarations, whereby taking on EU importers as direct clients can leave them equally liable for any tax due on declared imports, resulting in a situation where a £35 piece of work for a client could leave the broker jointly liable for a £2,300 duty bill.
A source told The Loadstar that: “If customs come and audit us and ask us to prove origin and we cannot, they will ask us to pay it, if not they will go to the importer.
“But, with the importer in the EU they could just say ‘come and get us’. Well, HMRC will not do that, and they don’t have to, because they have us, here in the UK, equally liable and much easier to get a hold of.
“If you’re one of the importers that’s missed a declaration, are customs going to find you? Even if they do, they could block subsequent deliveries, but you could just route them through a different company or change the legal terms. It’s almost been left to the good graces of the importer whether we see that duty paid.”