With the ‘100 days to Brexit’ countdown clock already ticking, most importers are aware that HMRC is promoting grants to help businesses make the customs declarations that will be required after the end of the Brexit transition period. However, not all are clear on exactly how these can be used to help them prepare.
HMRC has made £26 million available to businesses to prepare for Brexit. The grants are aimed at businesses that are, or are planning to, complete customs declarations, either importers acting in their own name or customs agents working on behalf of others – in other words customs agents.
For businesses that qualify, the grant scheme covers training (in the completion and submission of customs declarations), recruitment (or redeployment) of staff into these types of roles and enhancement of IT infrastructure to be able to deal with customs declarations. The cost of broader advisory expenses incurred on Brexit, for example on strategy or other systems changes, is unlikely to be covered by the training element of the grant.
Taking on compiling and submitting customs declarations is not the same as constructing or submitting a VAT return. There are significant costs, procedures and legal obligations to address, which is one of the reasons most importers employ third-party customs agents to complete the task on their behalf. At present, only a very small number of the importing community make their own customs declarations, usually via Customs Freight Simplified Procedures (CFSP), and tied to other customs regimes, such as customs warehousing. To do this, a high level of compliance is necessary. Importers must be authorised by HMRC to use CFSP and hold a badge to be allowed to access the customs systems on which declarations are made.
For this reason, it’s likely that only the largest businesses with complex supply chains will want to make their own customs declarations and will therefore be eligible for grants. In practice, the grants are offered with the aim of increasing the number of customs agents capable of dealing with the additional customs entries that will be required post Brexit, so HMRC’s target audience for the grants is primarily freight forwarders, hauliers, customs brokers, fast parcel operators and couriers.
Demand for customs agents will be high as the deadline approaches, and the learning curve for newly trained staff will be steep, so it will be challenging to find the right resources to prepare customs declarations in time. The top priority of businesses that import significant quantities of goods from the EU should be to decide whether to set up an in-house capability and, if not, to swiftly seek out a suitably skilled customs agent before the market reaches full capacity.