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What Happens If You Don’t Pay Customs Charges?

If you don’t pay customs charges, parcels will be kept by customs. The parcel(s) will typically be stored in a warehouse that will hold the goods for 30 days. If the outstanding customs payment isn’t made within this 30-day time period, then the parcel is likely to be abandoned, destroyed (only in certain cases) or returned back to the sender – which is unlikely to come free of charge due to each country having their own rules when it comes to customs.

Customs, duties and taxes can be applied to every parcel that’s shipped outside of Great Britain. The cost will vary depending on the item’s value and its ultimate destination. Sometimes the supplier will offer a refund for returned items but don’t be surprised if this is not the case.

So to prevent a customs conundrum, read on to see what you can do to ensure your distribution of imported goods (in the UK) continues as planned.

How to deal with and manage customs charges:

  • Control cash flow
    Try forecasting your business’s cash flow so you can effectively manage your ingoings and outgoings. This means you can spot any shortfalls in good time and make plans to tackle this ahead of schedule. It’s important to keep your books accurate and up to date by ensuring all cash flow is regularly updated, this helps to better understand your businesses financials.
  • Seek professional advice
    Turn to licensed insolvency practitioners (IPS) to give your company’s financial situation a good once-over. This will allow you to see how it’s doing and to make sure that it can continue to pay the bills. Seeking help from professionals can help to identify what’s working well and what isn’t working and, in some cases, you might be advised to apply for HMRC’s Duty Deferment Scheme, where you have 30 extra days to delay a payment.
  • Sort after additional finance
    To help the business pay custom and excise fees you could look into additional funding. There are plenty of options to choose from that aren’t just turning to the high street and they can be sorted easily and efficiently.
  • Build a cash reserve
    By putting money aside in the business, you can manage unexpected occurrences where you may need to dip into the reserve pot, rather than turn to lenders or banks.
  • Formal insolvency
    If your business has multiple debts and is officially insolvent, you may be able to turn to company administration to prevent entire business closure. This process allows for a moratorium period which gives your company time to weigh up your best options without being taken to court.

Custom, duties and tax calculations
With 195 countries globally, trying to work out customs, duties and tax fees can prove problematic. Trying to carry out calculations manually is practically undoable when each region has their own process for valuation and their own way of doing things.

What’s included in your customs fees?

  • UK Duty
  • VAT
  • Miscellaneous costs

Some businesses may pay customs and excise costs instantly as and when goods are imported. Other businesses that are allowed by HMRC can defer payments, but failing to fulfil these customs and excise obligations can be detrimental to a business.

What are custom charges?

Custom charges refers to the process that happens when an item enters the UK from its place of origin. The item starts off with an inspection from the customs authority team, Border Force, who act in support of HMRC. When inspecting received items, they look out for prohibited and restricted goods and review the customs declaration to include the necessary charges such as custom duty, excise and import VAT.

When an item does have chargeable fees, there are two ways to recover the costs, this includes delivery duty unpaid and delivery duty paid.

Delivery Duty Unpaid

When an item is shipped without custom charges being paid, the payment responsibility is that of the recipient. The recipient must pay the delivery duty before the item can be released and delivered.

Delivery Duty Paid

This simply means that the seller takes full responsibility for the goods once they have been readied for import. They will take on board all of the fees and risks surrounding the transport of the goods in question, clear the goods for both export and import, and ensure that all of the associated customs formalities are carried out.

What/who is Border Force?

Border Force maintains national prosperity by ensuring that goods and individuals move around through legitimate means. This law enforcement command manages this by carrying out immigration and custom checks at ports and airports. Border Force is in operation to prevent anything harmful entering the UK, whether that’s people or items.

What are prohibited and restricted items?

Although prohibited items and restricted items may seem like the same thing, they are different. Prohibited items will never be allowed to be sent via post and restricted items can be sent but there are limitations.

Restricted and prohibited items

The sender of the parcel should always check that the item they are sending isn’t prohibited and is safe to post.

To give you an idea of the sort of items that can fall into the restriction and prohibited sections, take a look a this brief list:

  • Animals / livestock / Insects
  • Artwork
  • Cultural goods
  • Plants

Not everyone will be entitled to a licence to ship the aforementioned items but in some cases it is possible to do so.

However, if you intend on importing or exporting live animals or plants, you must provide additional details and checks will be performed to ensure that you have adhered to the strict duties of care.

Follow this link to Gov’s guidance on live animals and animal product shipments for more information.

Follow this link to Gov’s guidance on plants and plant products shipments to learn more.

Apply for a licence to export arts, antiques and cultural goods by following this link to Gov’s website.

What are international restricted goods?

Restrictions are different from one country to the next, so it’s important to understand that some items may fall under the restricted section due to the economy, religion or the environment of the parcel’s destination.

Why custom duties are important in international shipping

When an item is shipped to another country, it’s likely you will be required to pay extra costs – known as duties and taxes – before the item or items can be delivered to their destination. The reason behind the Government applying taxes to shipments is because it helps to:

  • Safeguard domestic companies from competitors overseas
  • Control the distribution of certain goods
  • Increase revenue by applying taxes

What is a customs declaration?

A custom declaration refers to an official document that catalogues all goods that are being exported and imported, and this is shared with the customs office. Customs declaration offers complete visibility of all goods that enters and exits a country which ensures that everything is safe and approved before being shipped to its destination.

KlearNow is perfect for:

  • Importersa business that brings goods into a country.
  • Custom agents and brokersalso known as an import broker, custom agents and brokers facilitate customs clearance by making importing and exporting of goods quick, simple and reliable.
  • Freight forwardersorganise the transportation of goods from one place to another, typically overseas, making end-to-end activities easy and simple.
  • Carriersa business that ships materials and goods using the road system.

How can KlearNow help you?

KlearNow is an on-demand transparent customer clearance platform that offers importers, freight forwarders and customs brokers the ability to see real-time logistics in process.

KlearNow is the first customer clearance and document management platform built with its businesses in mind. KlearNow combines AI technology with a cloud-based platform, which means that users can now enjoy more business and all at less cost thanks to its full transparency and easy-to-use interface that’s accessible using any smart device. 24-7 hours, 7 days a week, KlearNow can take care of all the tiresome paperwork all at a flat fee per shipment – regardless of the parcel’s size.

How does KlearNow work?

Getting started with KlearNow is simple.

  • Set up your account 
  • Share your shipping documents – you can use this platform to file your commercial invoices, packing lists, bill of lading, etc.
  • We’ll file your customs declaration in minutes – we can send your customs declarations directly to HMRC quickly and easily for you, so you don’t have to.

With KlearNow, you can be kept in the know and enjoy transparency in your business thanks to our intuitive platform that updates shipment statuses in real time, so you can see for yourself when customs clearance receives your parcels. From here, your customs documents will be added and accessible on your very own personal dashboard.

To enjoy the benefits of KlearNow you only pay a flat fee which can be done from your shipment dashboard. Here, you can also monitor any outstanding duty and VAT amounts too.

Want to transform the way you work with an AI-driven, shared-economy platform? Go no further than KlearNow, we offer a cost-effective solution that makes logistics straightforward and provides unmatched visibility from end-to-end shipments.

Contact us today, we’d love to hear from you.