5 Costly Customs Mistakes That Could Get Your Business Fined by UK Customs (or Worse)
Introduction
5 Costly UK Customs Mistakes That Could Get Your Business Fined (or Worse)
Introduction
Navigating customs regulations can be tricky, and even small mistakes can lead to serious fines, shipment delays, or even confiscation of goods. Businesses importing into the UK must be aware of the most common customs pitfalls to avoid costly penalties from HM Revenue & Customs (HMRC). Whether you’re a first-time importer or a seasoned logistics professional, ensuring compliance with customs regulations is crucial to maintaining a smooth and cost-effective supply chain.
In this guide, we’ll cover five of the most common customs mistakes businesses make—and how you can avoid them.
Mistake #1: Using the Wrong Tariff Code (HS Code)
Why It’s a Problem
Every product has a specific Harmonized System (HS) Code that determines its customs duty rate. Misclassifying a product can result in higher import duties, additional paperwork, and delays.
Real-World Example
A UK electronics importer mistakenly classified LED light bulbs under “Consumer Electronics” (HS Code: 9405.10) instead of “Electrical Lighting Equipment” (HS Code: 8539.50). This led to a 30% increase in import duties, costing the business thousands in extra fees.
How to Avoid This Mistake
✅ Use the UK Trade Tariff Tool to classify goods correctly. ✅ Consult a customs expert or freight forwarder for classification advice. ✅ Apply for Advance Tariff Rulings (ATR) from HMRC for certainty.
Mistake #2: Under-Declaring the Value of Goods
Why It’s a Problem
Some businesses falsely lower the declared value of their imports to reduce customs duties and VAT. Customs authorities routinely audit shipments and undervaluation is a major red flag that can result in heavy fines, shipment holds, and legal action.
Real-World Example
A UK fashion retailer under-declared a shipment of designer handbags, claiming the total value was £50,000 instead of £150,000. When HMRC audited the shipment, they discovered the discrepancy, issued a £25,000 penalty, and suspended the company’s customs account.
How to Avoid This Mistake
✅ Always declare the true commercial invoice value of your goods. ✅ Keep detailed records of supplier invoices and payment receipts. ✅ Understand acceptable discounts and declare them correctly.
Mistake #3: Not Checking Restricted & Prohibited Goods Lists
Why It’s a Problem
Certain items cannot be imported into the UK without special licenses. Importing restricted goods without the correct approvals can result in shipment seizure, legal penalties, and reputational damage.
Common Restricted Goods in the UK
- Chemicals & Hazardous Materials (require special permits)
- Food & Agricultural Products (subject to health certifications)
- Technology & Surveillance Equipment (require export control licenses)
What Happens If You Don’t Comply?
Goods may be held indefinitely, destroyed, or returned at your expense. If authorities suspect criminal intent, companies and individuals can face prosecution.
How to Avoid This Mistake
✅ Check UK Government’s Restricted & Prohibited Goods List before importing. ✅ Obtain necessary import/export licenses before shipment. ✅ Work with a customs broker to ensure compliance.
Mistake #4: Not Registering for an EORI Number
Why It’s a Problem
An Economic Operators Registration and Identification (EORI) number is required for any UK business importing or exporting goods. Without an EORI number, customs cannot process your shipments, causing significant delays and additional costs.
How to Apply for an EORI Number in 5 Minutes
- Visit the UK Government EORI Registration Page.
- Enter your VAT number (if applicable) and company details.
- Receive your EORI number via email within 48 hours.
How to Avoid This Mistake
✅ Ensure your business has an active EORI number before importing. ✅ Register even if you only import occasionally. ✅ Double-check that your EORI number is linked to your customs declarations.
Mistake #5: Assuming Brexit Didn’t Change Anything
Why It’s a Problem
Post-Brexit, UK businesses no longer have frictionless trade with the EU. Many companies underestimated the changes, leading to shipment delays, rejected goods, and unexpected tariffs.
Common Brexit-Related Customs Issues
- New customs declarations required for UK-EU shipments.
- Different VAT rules apply for EU and non-EU trade.
- Rules of Origin impact duty rates—goods with non-UK/EU components may face higher tariffs.
How to Avoid This Mistake
✅ Stay updated on post-Brexit trade rules. ✅ Work with a customs broker to navigate new regulations. ✅ Use Postponed VAT Accounting (PVA) to simplify VAT payments.
Conclusion
Customs mistakes can be costly—but they’re avoidable with the right knowledge and planning. Understanding tariff classifications, declaring correct values, ensuring compliance with restricted goods regulations, and staying updated on Brexit changes can save your business from unnecessary fines, delays, and penalties.
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