(FREE) New research suggests almost 3 million GBP more was paid in customs duty than before Brexit. How can you NOT pay customs duty with Rules of Origin?
In the article published on 23.02.2022, CITY AM, reported that "Customs duties paid by UK businesses have jumped 64 per cent to a record £4.5bn in the year to 31 January 2022, up from £2.9bn in the previous 12 months".
"Customs Duties must be paid where goods enter a market from abroad unless there is a legitimate way to reduce or suspend them" said Arne Mielken, Managing Director of Customs Manager Ltd, a customs consultancy and training company
UK Accountancy firm UHY Hacker Young had said in their report, according to CITY AM, that the increase stems from a post-Brexit rise in customs duties. This is now being felt not only by businesses but also by consumers.
It confirms trends we saw at Customs Manager Ltd. Looking at the last five months to 31 January 2022, the research said, that over £2.1bn paid in that period alone.
The new spike in Customs Duty may also be due to the fact that since 1 January 2022, the submission of customs declarations prior to importation became a mandatory requirement for many ports of entry, such as Dover or the Eurotunnel.
Where no Free Trade Agreement is used, and by that we mean the Rules of Origin contained within it, duties usually have to be paid. These can be quite high - even up to 70+ % for some products.
"Post-Brexit ‘Rules of Origin’ requirements mean anything sold in the UK by EU businesses must wholly or largely originate in the EU to be exempt from customs duties when it enters the UK" CITY AM states.
Where a company cannot prove the origin, they may be liable to pay the full rate of customs duty and could face penalties. The need to prove the origin of the product through a statement on the origin or by claiming "importers knowledge" increased administration and makes some companies realise that their product does not actually originate in the EU, contrary to their previous belief. This can be quite a shock", Arne Mielken argues.
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