Customs compliance

Dorian Rosca

Customs Manager

Importing goods into the UK from the EU, the US, China, or other areas of the world can be complicated. Ten months after the UK left the Single European market, customs rules and processes are still in flux as the UK Government implements a phased approach to aligning customs procedures outside the EU.

New and existing importers must know what steps to take and which to avoid to get their goods across the UK border effectively and efficiently. Mistakes in the import process can mean you miss out on reduced rates of duty, and/or your goods are delayed or seized by customs. Clearly, this costs you time, money and damages your reputation.

In this article, we explore five common errors to avoid when importing goods into the UK.

Not checking the Commodity Code

The commodity code given to you by your overseas supplier may not be the right one for the goods you are buying. You should always check it before you use it in your import declaration. As the importer, you are responsible for using the correct commodity code.

Commodity codes are used to classify goods being imported (or exported). You will sometimes see them called HS (Harmonised System) codes. They’re the same. Getting the right code is important to ensure compliance with customs declarations and that the correct import VAT and duties are applied. Using the correct commodity code is also important to ensure any relevant legal or safety regulations are adhered to when importing products that might be dangerous or restricted.

By using an incorrect commodity code, you run the risk that your goods are seized or delayed by customs. If they are, you will face storage charges and possibly fines. You might pay incorrect VAT or duty and if you pay too little you could be liable for extra fees and charges. Furthermore, if HMRC finds incorrect commodity codes in a post-import audit, they could seek penalties on top of claiming any duties that were incorrectly assessed.

No Proof of Origin and not claiming Preference

Not having proof of origin can lead to complications at the border, missed opportunities to reduce duty liability or delays and penalties for non-compliance.

Rules of origin (ROO) are used to determine if products are eligible for duty-free or reduced duties under a free trade agreement such as the Trade and Cooperation Agreement (TCA) between the UK and EU. The rules allow goods that may contain non-originating (non-FTA) components to claim originating (FTA) status. The rules determining country of origin can be very simple if a product is wholly grown or manufactured and assembled primarily in one country. However, when a finished product includes components that originate in many countries, determining origin can be much more difficult. Rules of origin are detailed and specific. They vary from agreement to agreement and from product to product.

How does this relate to the EU-UK Trade and Cooperation Agreement? There is still a misconception among some businesses that they can automatically claim preference on any goods imported from the EU and that, as result, they do not have to pay duty on them. That’s a dangerous mistake! In order to be considered ‘originating’ under the TCA, and to qualify for a reduced rate of Customs Duty, products must be sufficiently worked or processed within the countries listed in the TCA agreement. Simply put, origin is based not on where the goods are shipped from, but where their value originates: usually, this is the last place of ‘significant transformation’.

Proof of origin is used by the importer to show that the goods qualify as ‘originating’ and are therefore eligible to claim preferential tariffs (e.g. 0%). In the EU-UK TCA this proof can be either:

– a statement of origin completed by the exporter on an invoice, or any other document including a commercial document
– knowledge obtained and held by the importer that the goods are originating in the EU (if importing to the UK, or UK if importing to the EU)

Some products are subject to preferential and non-preferential tariff quotas that allow a certain quantity of goods to be imported into a country at a reduced or zero rate of duty. Importers can miss this opportunity to reduce their costs by not doing the necessary checks.

To benefit from the lower rate of duty an importer must claim a tariff quota when the goods are imported. When a preferential or non-preferential quota is exhausted, imports will be subject to the full rate of duty. To benefit from preferential tariffs when importing into the UK, you will need to:

– claim preference on your customs declaration
– declare you hold proof that the goods meet the rules of origin

Incorrect Valuation of Goods

A customs valuation determines the amount of Customs Duty and Import VAT to be paid by the importer. There is one primary method of valuation and five secondary methods which must be used in descending order, they are:

(i) The transaction value (the primary valuation method and used on 90% of all imports) – The transaction value is the “price actually paid or payable”by the buyer to the seller for the goods when sold for export to the EU, adjusted in accordance with specific rules.

(ii) The transaction value of identical goods (secondary) – for goods which are the same in all respects including physical characteristics, produced in the same country as the goods being valued, or produced by the producer of the goods being valued.

(iii) Similar goods – closely resembling the goods being valued based on similar materials and components and have the same functionality, and are produced in the same country as and by the producer of the goods being valued.

(iii) Deductive value method (secondary) – calculated on the basis of the unit price at which the imported goods, or identical or similar goods, are sold in the EU to an unrelated buyer in the greatest aggregate quantity.

(iv) Computed value method (secondary) – the most complex method. Value is based on:

– Production and material costs and,
– Costs of transport, loading, handling and insurance, up to entry into the EU and,
– Profit and general expenses equal to those usually reflected in the sale of goods of the same class or kind.

(v) Fall-back method (secondary) – used when none of the above methods apply. It reverts back to previous methods but uses more flexibility when utilising the other methods.

A number of situations where a customs valuation is not straightforward include:

– When a business is transferring stock from one international site to another, there is no sale and, as a result, transaction value cannot be used
– Samples, replacement goods, free of charge items
– When a sales agent is used

An incorrect valuation can lead to Customs imposing or estimating a real value for goods which results in a higher valuation and an increased duty and VAT payment. In addition, the shipment could be stopped and/or confiscated.

Failing to make a Supplementary Customs Declaration

When making an import declaration, the importer may be able to make a simplified frontier declaration – this allows them to enter goods into a customs procedure without the need to provide a full customs declaration at the point of release. By requiring less information it has been designed to reduce time and administration at the border. Importers must meet certain conditions. Once met, HMRC authorises the importer to use simplified procedures.

The importer must submit the supplementary declaration after the simplified declaration to make up the ‘gap’ in HMRC’s information. This allows the importer to delay sending some information about the goods (for non-controlled goods only) for up to 175 days after import, reducing the burden at the point of import. The supplementary declaration provides Customs with more information about the goods, VAT liability and Customs Duty payable.

Failure to complete the supplementary declaration on time, whether a genuine mistake by the importer, a mis-understanding of what is required and when, or not knowing how to file a Supplementary Customs Declaration can lead to fines for non-compliance.

If you have been importing goods from the EU during 2021 it is quite possible you have been using this system – you may not know that you have been. If so, you will be required to submit Supplementary Declarations or risk penalties. You should check with your agent, or whoever is responsible for your declarations, to ensure your business has this covered.

Not knowing who has responsibility for the goods during the shipping process

Incoterms are a set of 11 internationally recognised rules which define the responsibilities of sellers, buyers and shippers. Incoterms specify who is responsible for paying and who carries risks at different stages of the shipment process. They cover shipment, insurance, documentation, customs clearance, and other logistical activities.

As a result, you must know your Incoterms and agree with your supplier the specific term to be used. This will ensure both parties are clear about who exactly is responsible for a shipment throughout the whole shipping and handling process.

Unfortunately, suppliers and importers (particularly new importers) sometimes agree on a particular Incoterm without fully understanding who is responsible for what during the shipping process. This can lead to misunderstandings between parties leading to delays, extra cost, mispriced contracts and double charges.

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In Conclusion

The rules for importing goods into the UK have changed and continue to change.

By carrying out good due diligence to ensure correct preparation for import of your goods, maintaining close commercial relationships with the appropriate partners such as an import agent, freight provider, customer and supplier, clearing customs for imported goods will be more straightforward, efficient and cost effective.

clearBorder’s Border Ready training gives you the knowledge to manage the process with confidence. And for everything else clearBorder Support is your trusted, independent source of advice to take the stress out of international trade.

Sources:
https://www.bkrconsultants.com/media-articles/5-customs-compliance-mistakes-to-avoid
https://www.freightcourse.com/what-is-cargo-ready-date/
https://transporteca.co.uk/international-shipping-guide/
https://transporteca.co.uk/import-mistakes/
https://www.gov.uk/guidance/finding-commodity-codes-for-imports-or-exports
https://www.gov.uk/guidance/appoint-someone-to-deal-with-customs-on-your-behalf
https://smallbusiness.co.uk/the-essential-guide-to-commodity-codes-2544028/
https://www.gov.uk/guidance/check-your-goods-meet-the-rules-of-origin
https://www.gov.uk/government/publications/notice-252-valuation-of-imported-goods-for-customs-purposes-vat-and-trade-statistics/notice-252-valuation-of-imported-goods-for-customs-purposes-vat-and-trade-statistics
https://www.gov.uk/guidance/making-an-import-supplementary-declaration
https://www.trade.gov/know-your-incoterms
https://www.grantthornton.co.uk/globalassets/1.-member-firms/united-kingdom/pdf/documents/tax/09-briefing-paper—customs-valuation.pdf

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Customs compliance – once treated as an operational afterthought, often conflated vaguely with “logistics” – is now elevated to risk management, resilience planning, and commercial strategy. The geopolitical landscape is changing too quickly, and the cost of being a “high-risk” trader is rising too sharply, to treat border procedures as mere paperwork. Defined simply, an AEO (Authorised Economic Operator) is a business accredited by customs authorities as a secure, compliant, and low-risk operator within global supply chains. The concept sits within the WCO SAFE Framework of Standards, a global initiative designed to secure and facilitate international trade by creating a network of trusted traders. Programmes such as the UK AEO, the EU’s AEO scheme, and the US CTPAT act like a central nervous system for international, risk-based, cross-border trading. Recent events underscore the significance: shipping delays linked to conflict in the Red Sea – which disrupted up to 30% of global container traffic at peak – exposed the fragility of global logistics. At the same time, sanctions regimes have proliferated at unprecedented speed, with more than 15,000 new Russia-related measures introduced globally since 2022. And, with the UK continuing to roll out its Border Target Operating Model, the message is clear: countries are moving toward risk-segmented borders, where “trusted” traders move faster and with fewer costs.   Why this matters In a post-COVID, geopolitically disrupted world, AEO certification signals strong governance, reduces border friction, and mitigates supply chain risk. For executives, it is not just about customs paperwork; it’s about positioning the business to compete effectively, respond to global disruptions, and unlock strategic opportunities. 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In short: AEO is a capex-light competitiveness investment, converting compliance effort into measurable operational, financial, and commercial returns. What makes AEO hard to achieve? And why that difficulty creates advantage For most companies, the complicating factors are underlying gaps in organisational maturity. Achieving AEO requires demonstrable control over data, processes, security, and supplier assurance; many businesses simply lack this level of visibility. Customs teams can often operate with fragmented documentation, inconsistent SOPs (standard operating procedures) across regions, and limited integration with procurement, finance, or security. This can make customs audits – and the gathering of evidence required for AEO – challenging. Moreover, the certification journey demands cross-functional alignment: HR, IT, security, finance, procurement, logistics, and executive leadership all play a role. 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Expert and independent customs advisory for your business Contact the clearBorder team → What a post‑clearance audit involves A post-clearance audit is a formal review conducted by customs authorities after goods have been released, typically targeting a sample of transactions or specific high-risk importers and exporters. These audits may be conducted remotely using documentation and electronic records, or on-site, where auditors inspect company systems, invoices, contracts, and shipping documents. Key areas examined often include: Classification of goods: ensuring that Harmonized System (HS) codes are correctly applied. Valuation and duty assessment: verifying the declared value matches invoices and contracts. Origin compliance: confirming preferential trade agreement claims and rules-of-origin certifications. Documentation and recordkeeping: checking invoices, bills of lading, import/export licenses, and internal controls. 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Operational insight: audit findings also reveal process gaps, bottlenecks, or inconsistencies in documentation that, once addressed, strengthen internal controls and enhance supply chain reliability. Board-level relevance: for executives and supply chain leaders, post-clearance audits provide actionable intelligence on duty exposure, contractual compliance, and sourcing risks, informing capital allocation, procurement strategies, and long-term operational resilience. Competitive advantage: boardrooms that embed post-clearance audit learnings into governance frameworks can reduce cost leakage, avoid disruption, and demonstrate to investors and stakeholders that trade compliance is managed strategically, not reactively. In short, by reframing post-clearance audits from a compliance obligation to a boardroom-level decision-support tool, companies transform regulatory scrutiny into a mechanism for improving efficiency, accountability, and cross-border operational excellence. Best practice for cross-border business Centralised recordkeeping  Ensure all transactional, shipping, and contractual documents are readily accessible and consistently maintained. Risk-based internal audits Conduct periodic internal reviews to identify potential classification, valuation, or origin issues. Training and governance Equip trade teams and finance departments with the knowledge to respond proactively to audits and apply consistent policies. Technology-enabled compliance Use ERP and trade-compliance software to track transactions, automate reporting, and flag potential discrepancies early. A collaborative approach  Engage proactively with customs authorities, demonstrate transparency, and respond promptly to audit queries. Practical steps for executives For trade leaders, managing post‑clearance audits strategically means treating them as a force multiplier for internal control and risk intelligence. 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How post‑clearance audits strengthen global trade compliance
Customs compliance

How business leaders turn border inspection controls into competitive advantage

TLDR Border inspections are often seen by businesses as red tape, but they’re also where operational discipline is tested. Leaders that anticipate requirements, align suppliers, and digitise documentation don’t just reduce delays – they build resilience and credibility. Managed well, inspections move from being a hidden cost to a lever for competitive advantage in cross-border trade. Border inspection controls are often viewed as friction: a routine hassle at ports and checkpoints. But for many businesses, the moment a shipment is stopped is also the first time they discover something has gone wrong – and by then it’s usually too late. Proactive planning and inspection readiness are essential to avoid these surprises. Yet, for companies operating across global trade lines, inspections are not only obstacles; they’re among the highest-leverage levers for competitive advantage. Processes such as sanitary and phytosanitary (SPS) checks, documentary review, health certificates, and physical inspections can determine whether a shipment flows smoothly, or stalls – affecting margins, customer confidence, and market access. Since post-Brexit inspections ramped up, UK firms estimate that the new border checks on goods from the EU could cost £4.7bn. Meanwhile, as many as 40 million customs declarations are made annually by traders moving goods between Great Britain and the EU – many of which face potential inspection delays depending on origin, product category, or documentation quality.  However, there is an opportunity here. Business leaders can turn managing border inspection procedures from cost centre to competitive differentiator – by deploying strategy, technology, governance and preparedness to gain speed, trust, and margin in cross-border trade. What border inspection means for modern business Border inspection refers to the regulatory checks goods undergo when crossing into a new jurisdiction: verification of documentation (health or phytosanitary certificates, origin declarations, conformity standards), identity and authenticity of goods, and physical or laboratory inspection for SPS or safety risks. Under recent UK-EU trade changes and SPS control regimes, exporters must comply not only with customs formalities but also with enhanced checks at Border Control Posts (BCPs/BIPs), TRACES notifications, and possibly lab testing. For instance, for a fresh produce supplier in Kent, a shipment of fruit arriving without a valid phytosanitary certificate would likely be delayed at the border, incurring storage or demurrage charges. Worse, if inspections revealed pests or disease risk, the goods would be rejected or destroyed – harming reputation, causing waste, and raising compliance costs.  On the other hand, companies that build careful inspection readiness (verifying certificates ahead, aligning with TRACES requirements, scheduling documents so pre-notification is seamless) typically secure faster release times, lower cost uncertainty, and greater access to high-value markets. Proactivity and planning Border inspections are not the place to discover errors. By the time goods are stopped, the damage is often already done: spoiled products, storage fees, missed delivery windows, and reputational harm. The real discipline lies upstream. Successful businesses treat inspection readiness as a continuous process, not a last-minute box-tick. That means: Mapping requirements in advance for every product line, supplier, and market. Building checks into supplier relationships, so certificates and declarations are correct before goods even leave origin. Running “dry runs” of inspection procedures to identify weak points before they become costly. Digitising documentation flows, so that nothing is lost in email chains or last-minute uploads. Proactivity transforms the inspection process from a reactive firefight into a predictable, managed part of the supply chain.  For leadership teams, this shift is as much about culture as compliance: creating an organisation that is prepared for scrutiny, resilient under pressure, and trusted by regulators and customers alike. Compliance burden to competitive edge Being “inspection-ready” is a source of strategic strength. Companies that embed inspection procedures into their governance, horizon scanning, and trade planning reduce the delays that drive up landed cost and erode margins. They also avoid hidden costs like spoiled goods, customer penalties, or lost contracts due to delayed fulfilment. In sectors where SPS is critical – food and agriculture, pharmaceuticals, livestock, plants – reputation and reliability are non-negotiable. Buyers and regulators are increasingly intolerant of lapses. Investing in proper inspection readiness, lab capacity, document integrity, and anticipating regulatory shifts (for example, those enforced through BTOM or changes to UK/EU inspection regimes) earns trust, strengthens supply chains, and differentiates businesses in crowded markets. For leaders, inspection controls are asset insurance. Proper inspection strategy translates uncertainty into predictability – making border checks a signal of operational maturity. Managing border inspection procedures strategically The way border inspections are managed determines whether they drain resources or create competitive advantage. Strategic management means treating inspection procedures as part of enterprise risk and supply chain planning, not just as a last-mile compliance task. At its simplest, this requires three things: anticipation, alignment, and accountability.  Anticipation involves mapping inspection requirements by product line, jurisdiction, and trading partner: knowing exactly which goods are subject to SPS or veterinary checks, and what certificates are required.  Alignment means ensuring logistics providers, customs brokers, and suppliers operate with the same information flow and deadlines.  Accountability ensures that failures – missing documentation, late pre-notifications, non-compliant packaging – are traceable and corrected systematically. The difference in outcomes can be stark.  Imagine two chilled meat exporters shipping into the EU: one submits pre-notifications late, with incomplete veterinary certificates, leading to 48-hour delays and spoiled stock; the other invests in integrated systems and supplier training, clearing inspections with minimal disruption.  The cost differential is measured not only in tariffs and storage fees, but also in lost customer trust. Dimension Reactive approach Strategic approach Planning Ad hoc, shipment-by-shipment Integrated into supply chain and risk frameworks Documentation Last-minute collation Proactive collection, verified weeks in advance Stakeholder alignment Broker-driven, fragmented Shared protocols across brokers, suppliers, carriers Cost impact Frequent demurrage, spoilage, surcharges Reduced hidden costs, predictable landed pricing Reputational impact Delays seen as unreliability Compliance maturity signals trust and resilience   Technology and digitalisation Technology is increasingly the differentiator in border inspection performance. Digital pre-notification systems such as TRACES (for EU imports) or IPAFFS (for UK) are already mandatory for many products. Businesses that integrate these platforms with their ERP or supply chain systems reduce errors and ensure certificates are linked to shipments automatically. Automation also enhances inspection readiness. Tools that flag expiring supplier declarations, validate health certificates, and cross-reference tariff and SPS rules reduce reliance on manual checks. According to McKinsey, companies that digitise trade compliance processes cut inspection delays by up to 30% and free staff to focus on exception management rather than repetitive data entry. Hypothetical vignette A global seafood exporter integrates TRACES with its inventory system. Each consignment is automatically pre-notified, with health certificates uploaded directly from suppliers. The result: clearance times drop, cold-chain integrity is maintained, and the company wins new contracts by consistently delivering “inspection-ready” consignments. Book a Consultation Ready to get expert help? Book a consultation today and take the next step. Book Your Consultation Turning inspections into an asset When handled strategically, inspections provide assurance that a company’s supply chain meets the highest standards. For example, businesses in the pharmaceutical and agri-food sectors often use their inspection track record as a quality signal in investor pitches and customer contracts. Proactive engagement with authorities can also bring reputational dividends.  Companies that voluntarily exceed minimum requirements – by adopting digital traceability, commissioning third-party audits, or collaborating with regulators to pilot new border control processes – position themselves as industry leaders. This is particularly valuable in markets where sustainability, safety, and provenance are decisive factors for customers. Hypothetical vignette A UK dairy exporter faces repeated delays due to misaligned veterinary paperwork. By investing in supplier training and a compliance dashboard that tracks documentation completeness in real time, the business not only cuts clearance delays by 60% but also uses its improved performance as part of an ESG narrative with retailers, highlighting transparency and reliability. Ultimately, inspections are unavoidable. But leaders who manage them strategically can convert what most treat as a liability into a source of trust, efficiency, and long-term competitive advantage. Closing the compliance / competitive gap  Though it seems ill-advised to make predictions regarding the trading world of today, it’s fairly safe to assume that border inspections will remain a fact – but how businesses approach them determines whether they are a recurring liability or a source of resilience.  According to the World Bank, border compliance costs globally equate to significant operational drag, due largely to mismanagement. Yet companies that invest in digitalisation, supplier training, and strategic broker partnerships can turn these costs into predictable, manageable elements of trade. For business leadership teams, the imperative is clear: border inspection controls should be seen as a test of operational maturity and a lever of competitive positioning. Those who treat inspections as part of enterprise strategy are better placed to protect margins, reassure customers, and win advantage in markets where compliance and trust increasingly define success. Contact clearBorder today for expert SPS controls guidance →

How business leaders turn border inspection controls into competitive advantage
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