With the reality of Brexit fast approaching, businesses should be planning for a No-deal outcome.
One result of Brexit is likely to be the increase in the number of importers using a Customs Warehouse (CW). If a business imports goods from outside the UK (which will include other EU Member States from 1 January 2020) and it wants to store the goods to delay duty payments, this can be done in a CW.
HMRC has, this month, as a result of the anticipated increase, updated guidance on the use of a CW. Interested parties may wish to consider this publication.
Overview
There are two types of customs warehouse where you can store your goods.
- Public warehouse
This is a warehouse operated by a business whose purpose is to store other people’s goods. They are the warehousekeeper and you are the depositor.
- Private warehouse
This is a warehouse operated by a business to store its own goods. That business is the warehousekeeper and the depositor.
Paying duty and import VAT
A business will need to pay any Customs Duty due and import VAT when it removes its goods from a CW to free circulation (not at the time the goods enter the UK). This a different procedure to duty deferment and often improves cashflow.
Placing goods in a CW
A business is responsible for:
- correctly declaring the goods – if it uses an agent, it must give them clear written instructions about declaring the goods
- ensuring that the goods are sent directly to the CW named on your declaration, within five days of Customs clearance
- providing the warehousekeeper with all the details of the customs declaration
- ensuring that the CW is approved for the type goods being deposited including chilled, frozen or requiring special storage needs, eg; chemicals
- goods being correctly declared on removal from the warehouse
Removing goods from a CW
- when a business releases goods to free circulation, it is ‘discharging’ or removing them from a CW and will pay any VAT and duty due
- customs declaration will be required to remove the goods or declare them to another procedure
- a business will be notified electronically of the entry number and it can remove the goods after it has made the declaration
- there is also a simplified declaration which may be used to remove goods
Further details on managing a CW here.