If you import from outside the European Union, you’ll probably use a freight forwarder to transport air freight and ocean freight consignments from your suppliers, and also to Customs clear the goods.
There is however, a common misunderstanding. As importers pay a freight forwarder to take care of the whole transport process, which includes Customs clearance, they assume that the freight forwarder is also responsible for the accuracy of the Customs declaration they submitted, but this isn’t the case.
In 95% of cases, the Customs entry is completed by the freight forwarder on your behalf as a “Direct Representative”, which means although they signed the entry (electronically), you're legally liable for the accuracy of their declaration, any commodity codes used, and the amount of duty and VAT paid.
If errors are made, HMRC will hold you, the importer responsible, often levying fines and demanding underpaid duty covering a 7-year time period. As most importers aren’t aware of this and also lack Customs expertise, they don’t check their import entries for accuracy or provide correct commodity codes from the Customs Tariff to their freight forwarder.
It's quite ironic as many customers also overpay duty because the incorrect classifications/duty rates have been used or they fail to take advantage of duty reliefs which are available from certain countries.
As an example, we reclaimed £26,000 of overpaid duty for a customer who had been paying 2.2% instead of 1.7% duty for several years. Another client relied on their freight forwarder to declare their goods and were paying 4.5% on all products when 50% were liable at 2.2% - which saved them £ 15,000 per annum.
At SCL, suffice to say that we are very experienced in this area and carry out import entry compliance checks for the majority of our customers, archiving all related documents and producing a rolling monthly compliance report. We are often asked to assist with Customs tariff classification for our customers, translating confusing Customs jargon into everyday business language.
From January 2021, we should also mention that imports from the EU will also require Customs declarations and this will require a similar process to an import from the US or China so please contact us if you need guidance or assistance in preparation for BREXIT. It is estimated that there are 130,000 companies in the UK who solely trade with the EU. I should add that we are receiving many calls asking for advice on preparation for BREXIT and my general feeling is that many companies are not prepared, be they an importer or an exporter, so if you’re concerned, please do contact us for advice.
"It is a pleasure to work with Andy who is professional, driven and easy to get on with” Paul Critchlow, Managing Director, Distinctive Medical Products, Runcorn
“We did not know we had a problem with our import shipping until Andy Cliff came to visit and offered us an overview of all of our overseas transport requirements” Richard Brown, Managing Director, Abbey England, Knutsford
“I am writing to thank you for all the work you have done for my company since we started working together in 2017. You have made our incoming freight more “straightforward” and we now know that we get the most favourable prices” Paul Hornby, Managing Director, Foilco, Warrington
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“I would certainly recommend Andy to any company looking to improve cost and service in the logistics area, especially in these uncertain times” Rob Laird, Finance Director, Uren Food Group, Neston
“Not everyone has time to scrutinise invoices to check the costs are correct, especially when the freight forwarders try to bamboozle you with trade jargon” Neil Barlow, Director, New World Air Brake, Warrington
“What really surprised us was that as well as achieving savings of almost 50% on our freight costs, we also saw marked improvements in the service levels” Steve Goldstraw, Managing Director, Staffordshire Hydraulic Services, Stoke-on-Trent
“From the very first meeting, it became apparent that Andy Cliff was professional, committed, tenacious and enthusiastic and very much customer-led in his thinking” Jim Hickey, Head of Procurement, Luxfer MEL Technologies, Manchester