The government has provided details on a string of customs measures in its recent Spring Budget announcement.
Duties
From a duties perspective, fuel duty was frozen, with the extension of the 5p cut for a further 12 months, though an argument remains on whether this cut has been sufficiently passed on to drivers. For alcohol, draught relief will increase from 5% to 9.2%, which has been sold as helping to mitigate the planned inflationary rise in alcohol duty expected in August. The only changes therefore concerned excise duty, with no changes announced for conventional customs duty rates, with a potential missed opportunity to ease supply chain difficulties by reducing or eliminating duty rates for food imports.
What else was announced?
Simplifications for customs declarations
As a result of the stakeholder engagement input in the government’s “call for evidence” last year, a number of simplifications and improvements to the Simplified Customs Declaration Process (SCDP) have been announced.
Authorised businesses who use SCDP will now have an increased amount of time to submit their supplementary declarations for imports and exports. The deadline will be shifted from the 4th working day to the 10th calendar day of the month, with the Final Supplementary Declaration (FSD) now due by the 11th calendar day of the month, and a relaxation on the aggregation rules also in scope.
These changes will help to relieve pressure on businesses with high volumes of customs declarations, and in particular those for whom the number of customs declarations has skyrocketed post-Brexit. It remains to be seen whether these changes will have an impact on the monthly payment date for traders holding Duty Deferment Accounts. This measure is, however, very much a sticking plaster for the failures of the existing system, which has become stretched by the increased number of declarations since Brexit.
Voluntary standards for customs intermediaries
The government also announced, much to the interest of businesses who regularly import and partner with customs intermediaries, that they will consult stakeholders in the summer of 2023 on the introduction of a voluntary standard for those operating as customs intermediaries e.g. customs brokers, with the aim of eliminating varying levels of service quality across the sector. While an improvement to service quality levels will be welcome, it remains unclear how a voluntary standard might be effective.
Changes to financial guarantee requirements
The government intends to engage with industry to reduce financial guarantee requirements for traders using certain customs facilitations e.g. special procedures and duty deferment. These requirements were removed for most traders post-Brexit to simplify trading, and the new measures are expected to improve cash flow and ease administrative burdens for a greater number of traders. For business who currently have a customs guarantee in place, it is advisable to understand and review whether the guarantee may no longer be required.
Advance Valuation Rulings (AVR)
A new mechanism to allow for HMRC to issue binding rulings on customs valuation, “Advance Valuation Rulings”, will be set out legislatively in the Spring Finance Bill. Such rulings will act to give certainty to traders with complex valuation arrangements on how to arrive at the correct customs value for their goods, and will supplement the existing mechanisms for binding rulings on customs classification and origin.
Measures will also be introduced in the Finance Bill to the operation of the Trade Remedies Authority (TRA). The proposed changes would give the Government additional powers to decide the outcome of trade remedies investigations while maintaining the TRA’s independent investigatory and recommendation functions. Post-Brexit, the TRA was set up with the intention for it to be act as independent, arms-length body, but this change will act to significantly dilute its independence and powers.
Other simplifications announced include simplifications to the Transit procedure and more details on the Modernising Authorisations project, which aims to streamline and digitise the customs authorisations process.
Source Crowe
