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Customs offices, where are you?
March 2007
Mike Hodge, International Trade Today
In my last article, I expressed some concerns I had about the quality of advice that HMR&C makes available to businesses engaged in international trade. I said I was going to make some enquiries and this is exactly what I have done.
The trigger for all this, apart from the shortcomings I usually harp on about, was a comment made at the December 2006 Joint Customs Consultative meeting, where, in an agenda item on ‘HMR&C’s Transformation’, the HMR&C speaker was heard to say, ‘The Golden Age [of Customs] is over’. At the time of writing this article, I have not had sight of the minutes but I am certain the comment will not be reported. However, three or four of the Trade side representatives who attended the meeting have confirmed the comment, so I thought I would do a bit of market research.
One of my contacts is a writer for a variety of publications; he is not a Customs specialist but he decided he would try and find out where ‘an importer’ could get some decent and reliable advice. He told me he started with the HMR&C press office, ‘who turned out to be completely useless’. I am not at all surprised by that – after all, it’s a press office, not an Advice Centre.
So, the National Advice Centre was his next port of call. He listened to the ‘press 1, press 2, press 3’ and, with an air of optimism, he pressed option 3. He waited five or 10 minutes, gave up and rang again. This time he got through to a desk and said that he wanted some general help on importing insofar as it related to Customs controls. He was told that the National Advice Service did not provide advice of that nature. He was advised to speak to the Department of Trade and Industry. No telephone number was given – it was a case of ‘just go away and do it’. Of course, the writer is no further forward.
I am aware also of a company that has an issue with ‘assists’ – these are tooling, design etc., costs incurred outside the EU and which relate to goods previously imported. Under the Customs Duty Valuation rules, these additional charges have to be declared for Customs duty purposes – albeit retrospectively.
The company tried to find a Customs office to write to but that sort of contact is no longer available. Two calls to the National Advice Centre were unsuccessful so the company secretary (not easily prepared to give up his quest to pay this additional duty) resorted to sending an email to the Advice Centre.
The reply duly came and the company was told to complete a C18 Post Clearance Demand Note and send it, with the remittance, to the Office at Salford. However, it added: ‘I cannot provide you with the address.’
So, the diligent company secretary got on to the Customs website and, under Forms, looked for the C18 document. It was not listed. So, returning to the ‘search’ facility, he put in C18 and, mirabile dictu, the form appeared. Unfortunately, was nothing at all to do with back duty on a Customs matter – it’s to do with the transfer of a married couple’s allowance – not quite what the company secretary had in mind.
The point I am trying to make is that, for someone trying to find out how to do things correctly, the information, advice and guidance is simply not there. I believe there are 120,000 regular exporters and 100,000 regular importers in the UK. Obviously, some are in both camps so it would not be unreasonable to assess that there are some 180,000 international trade businesses.
Once upon a time, there were Customs offices, which housed civil servants who could actually be spoken to. I know we have to move forward, I know someone decided that a merger between Revenue and Customs was desirable and I know that a whole load of staff had to go. I also know that HM Revenue & Customs is a tax collecting department – not a place where free advice is provided.
But doesn’t the Government feel that it has a duty of care to look after importing and exporting businesses, which are the lifeblood of the UK? I don’t know what these companies contribute to the Exchequer and the national trade figures but, unless something is done very soon, they won’t be there to contribute.
Two other issues that cause me concern are the advent of the Multi Annual Strategic Plan and the Authorised Economic Operator Scheme – both compulsory initiatives dreamt up by the Brussels bureaucrats. I have written about them in previous issues so I won’t bore you with the details again. The point is, of course, that they both have a major impact on international trade businesses.
In July, UK businesses will be allowed to apply for Authorised Economic Operator approval. These will be granted from 1 January 2008. The rumour on the street is that the approval process is very time consuming and immensely thorough. Hours of man work will be required. What happens if 5,000 businesses apply? Also, it seems likely that a business in the UK will not be allowed to trade with the United States unless it obtains AEO approval. And there are plenty of businesses for which the US is a major market or supplier.
I don’t think that HMR&C is, in any way, prepared for an influx of applications. I don’t think they have the resource, the systems, nor the departmental knowledge to deal with the detail required for AEO approval. I have no knowledge of any departmental training initiatives going on and I really do shudder to think what an utter shambles this could be. It would be marvellous if I was proved wrong – I’ve been wrong before (at least, I think I have) but I am sure I’m not wrong about this.
The looming disaster worsens when I add that the new codings for the SAD Document go live on 1 July; no transitional period is now planned. On that date Customs will receive not only a number of AEO applications but many enquiries from businesses whose goods are stuck on docksides because Customs won’t be able to clear them (we must get our codes right, you know!)
Ending on a slightly more up-beat issue, I need to bring you up to date on the present situation on the Immigration, Asylum and Nationality Act 2006 (known as IAN). I wrote an article on this new bit of lunacy in the May 2006 issue.
Basically, anyone moving goods into and out of the UK into another member state will be required to provide a whole load of extra freight data. More anti-terrorist stuff is highly desirable but much of the required information is simply not available. The IAN Act received Royal Assent in March 2006 and the Home Office and other regulatory bodies have been pushing ahead with the development of the secondary legislation that would spell out the fine detail. It was planned to have this in place by 31 March 2007.
Last summer there was extensive consultation with the relevant trade sectors that would be impacted by the legislation. Their concerns centered on the prohibitive costs to UK businesses and whether or not the proposed legislation was in contravention of the Treaty of Rome Articles, which guarantee the free movement of goods in free circulation within the European Community.
Things went quiet in the autumn of last year as a first draft of the secondary legislation was awaited. However, in December the Home Office announced that it was reconsidering its policy and that a hold had been placed on the secondary legislation. There was an almost audible, collective sigh of relief from the Trade!
Be warned, though: the Home Office has made it clear that it still intends to legislate and provide the police with powers to require freight data where they have grounds to suspect that particular consignments are linked to illegal activity. It plans to have the legal drafts available before the end of October 2007.
If this is the case, the major trade concerns will have been removed and, better still, someone somewhere has paid attention to the consultative process even if it was after the event. Take heed, though, we are by no means out of the wood.
