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International Trade newsletter - November 2018

HMRC newsletter on recent issues covering International Trade.

How can I keep myself up to date with HMRC publications?

You can sign up to receive notifications of any announcements on the GOV.UK website. (www.gov.uk/government/organisations/hm-revenue-customs)

Training for Intermediaries

HMT Teasury and HMRC have designed a package of measures to support the intermediaries sector to expand ahead of March 2019. This includes a one-off investment of £8 million. There are three ways these funds will be used: contracts with training providers for ceating and delivering new courses; a grant scheme to support intermediaries and/or businesses with the upfront costs of training their employees; and, a grant scheme to support investment in automation in the sector. For more information and to follow progress on this initiative go to: www.gov.uk/government/news/hm-treasury-and-hmrc-invest-in-customs-training-and-automation--2

How much do you know about the corporate offence of failure to prevent the criminal facilitation of tax evasion?

The legislation that entered into force in October 2017 does not radically alter what is criminal. It simply focusses on who is held to account for acts contrary to the current criminal law. It does this by focussing on the failure to prevent the crimes of those who act for or on behalf of a corporation. This includes employees, agents or those that provide services for or on their behalf. For more detailed guidance please visit this link.

Returned Goods Relief (RGR)

The key requirements for relief from Customs Duty and VAT under the RGR regime (for goods re-imported into the UK) are:

  • that the relevant goods must have been in free circulation with all duties and taxes paid when exported from the EU
  • the same goods must be re-imported in an unaltered state within 3 years of the date of original export

It is up to the declarant to make sure they have sufficient evidence to prove both these points. A recent tribunal case on this matter focussed on poor attention to detail in relation to paperwork and being active in overseeing shipping agents. This meant they could not prove they qualified, not that they didn’t qualify. This is an important distinction. RGR is a derogation from the statutory rules on duty liability and the rules must be strictly ahered to.


Using the wrong tariff code and/or misdeclaration of origin can lead to an incorrect liability for duty and VAT being applied. You must use the UK Trade Tariff to find the right commodity code for your goods. This is available online on GOV.UK. Detailed guidance to help you classify your goods is also available on GOV.UK. We also publish tariff notices containing information about how to correctly classify certain types of goods for import purposes. Go to GOV.UK and search ‘tariff notices’.

A recent Tribunal case concerned the correct classification of Poppadoms. The duty rate applicable to the initial classification was 5.5% but according to HMRC’s classification the duty rate was 15.7%. The appeal was dismissed by the First Tier Tribunal. In issuing their decision the Tribunal drew on the two sets of explanatory notes that are relevant to the interpretation of the Combined Nomenclature (CN): The Harmonised System Explanatory notes (HSENs) (issued by the WCO) and the Combined Nomenclature Explanatory Notes CNENs (issued by the European Commission).

False claims to origin

A recent tribunal decision on Origin relates to false claims of origin of garlic. The garlic was declared as having originated in India rather than China. The reason the actual origin was falsified was because it breached the quota from China and would have been liable to an amount of €1,200 per tonne in addition

to the 9.6% duty. The appellants had been required to pay the higher amount. There were a number of innocent parties caught up in this deliberate scam. The fact that they relied on documents subsequently found to have been falsified or inaccurate was not in itself a reason for their import duties to be repaid. Their appeal was dismissed.

This case highlights the risks of lack of due diligence or failure to ask yourself ‘does this look too good to be true?’

Seizure and restoration

When is a decision not to restore reasonable?

When goods are seized there are two things a person can do: One is to challenge the legality of the seizure (in the Magistrates Court) and one is to seek restoration of the goods. Section 152(b) of the Customs & Excise Management Act 1979 (“CEMA”) gives HMRC discretion to restore seized goods, subject to such conditions (if any) as they think proper. This will usually be in the form of duty and VAT (where due) and a financial penalty adequate to penalise the behaviour and encourage compliance with the laws and regulations.

Each case is considered on its own merits to determine if there are circumstances which would make it appropriate for restoration to be offerred. HMRC’s policy on mixed goods (i.e. goods found mixed with goods liable to forfeiture in order to mislead or conceal a fraud) is that they will be restored only in “very exceptional circumstances”.

If the request to restore is refused and the refusal is upheld when the case goes to review there is further recourse, this is to lodge an appeal of the decision to the Tribunal. To be succesful before the Tribunal the Appellant would have to prove that any decision not to restore was one that could not have been reasonably arrived at.

The fact that a different person may have reached a different conclusion is not in itself proof that the decision was unreasonable.

Recent changes

Change in approach on indirect representation for some customs authorisation holders (CIP10) Indirect representatives will no longer be able to use their own simplified procedure approvals when making declarations to special procedures which are held by their customers.

How to obtain preferential treatment for trade with Turkey (Notice 812)
This notice explains the rules which must be satisfied if goods are to qualify for preferential tariff treatment under the agreement the European Union (EU) has concluded with Turkey for a wide range of industrial products, and under reciprocal traditional preferential trade arrangements the EU has concluded with Turkey for most agricultural and all coal and steel products. It was updated in August 2018 to provide clarity around what constitutes commercial documentation.

Tariff Quota notice 104
This notice introduced new quotas imposing provisional safeguard measures on imports of certain steel products (tariff-quota-notice-104)

Tariff stop press notice 19
This notices highlights the re-balancing measures adopted by the EU in reaction to US steel and aluminium tariffs. us-steel-and-aluminium-tariffs

CDS – Import declaration completion guide
Are you keeping up to date with information about CDS? import-declaration-completion-guide

Customs Compehensive Guarantee
Did you know that some of the contact details for approved banks or financial insitutions HMRC can accept as a guarantor has been updated customs-comprehensive-guarantee

Notice 826 – Tariff preference – Imports
Were you aware that the period of validity for preference documents has been updated? notice-826-tariff-preferences-imports

N.B. As an importer, even if you engage a freight forwarder to faciliate a movement, importing goods correctly to the UK remains your responsibility, and ignorance of the law is not considered reasonable excuse.

Reporting Fraud

If you need further information please visit GOV.UK (customs-excise-and-vat-fraud-reporting) or you can speak to the VAT, Excise and Customs Helpline on Telephone: 0300 200 3700.


If you have any feedback on this newsletter or any ideas for subjects to be included in future versions please email jane.hassan@hmrc.gsi.gov.uk.

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