Policy & Compliance
Customs Agents: The importance of vigilance
There are clear risks involved in acting as a Customs Agent, whether Direct or Indirect. It is important that Members fully understand and assess those risks
C ustoms representation continues to be an important part of the work done by BIFA Members for their customers. BIFA has been clear in its advice that, wherever possible, Members should act as a Direct Customs Agent (a Direct Representative in pre-Brexit terminology). However, in many cases this will not be possible, because the customer/importer is a Non-Established Taxable Person (NETP – not established in the UK). Where a Member undertakes an import entry for an NETP, that can only be done on the basis that the Member acts as an Indirect Customs Agent (Indirect Representation in pre-Brexit terminology). When acting as an Indirect Customs Agent, the Member assumes joint and several liability for any Customs debt arising out of the entry. Customs debt includes duties, import VAT and any fines or other levies imposed arising out of the importation of the goods and includes any liability arising out of a post-entry demand. Post-entry, HMRC may assess, for example, that the value of the goods was under-declared, or an incorrect commodity code used and that additional duty or import VAT is therefore payable. Members should also be aware that even when acting as a Direct Customs Agent, personal liability may arise. This would be the case where the Member knowingly made a false declaration. Specific issues arise in relation to entries made under the Postponed VAT Accounting (PVA) procedure. Legislation requires
that the Customs Agent undertakes quite stringent due diligence in relation to those on whose behalf PVA entries are submitted; a failure to do so exposes the
Member to personal liability for the postponed VAT. See for example the HMRC Guidance Due diligence when making Customs declarations (www.gov.uk/guidance/due-diligence- when-making-customs-declarations).
Warning on UK-incorporated companies Members should also be aware that they may unwittingly fail to recognise that a UK-incorporated company is in fact an NETP, and that they cannot properly act as a Direct Customs Agent (regardless of the box ticked within CDS). In such cases, the Member will be treated as an Indirect Customs Agent and assume joint and several liability. Members should see the BIFA article published in the May 2023 issue of BIFAlink for further discussion on NETPs (scan the QR code). The increasing prevalence of (i) DDP shipments; and (ii) foreign based e-tailers and other foreign sellers holding their stock in the UK in fulfilment houses pending sales being made while the goods are in the UK, have given rise to increasing requests to Members to act as Indirect Customs Agents. It will be for
“ Members should also be aware that even when acting as a Direct Customs Agent, personal liability may arise
12 | August 2023
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