Frequently Asked Questions

In a broad stroke anywhere from 5 minutes to 3-4 hours (assuming no examinations are taking place and HMRC has not queried the entry for some reason).  There are ‘routings’ that entries take that determine their speed.  The most common three are:

Route 1

Documentary checks. HMRC want to see all paperwork before clearing the entry, and once the entry has been emailed to them by the clearance agent they aim to get these entries customs cleared within 3 hours.  If not cleared by then, Broadside would send through a ‘second request’.  Of course if the vessel arrives after working hours, then the entry will not be emailed to HMRC until the start of the next working day, so make allowances for this.

Route 2

HMRC want to examine your cargo.  This will delay customs clearance to around 3-7 days depending on the workload of the port, and of course HMRC staffing levels.

Route 6

Always our favourite as this one clears in 5 to 60 minutes.  There are two streams, and only HMRC will know why one Route 6 entry will be processed on the 5 minute stream, and yet another will take 60 minutes.  HMRC do not always look at the paperwork for these, and the 60 minute stream does at least allow them time to request paperwork from us before clearance is issued.  If they do request paperwork from the agent on a Route 6 entry, it will in effect from that time, act like a Route 1 entry.

Nearly all route 6 entries are customs cleared unchecked by HMRC though.

All commercial transactions (where you sell products in UK for profit) require an EORI (Economic Operator Registration & Identification) number.  This was introduced in July 2009 to minimise cases of fraud.  This is regardless of whether you are VAT registered or not.

The good news for VAT registered companies is that your EORI number will be the same as your VAT Number, but you still have to register to be EORI approved even if you are VAT registered already.

To apply, go to    https://www.gov.uk/eori

If you are importing goods for your own personal use, and not for commercial sale, you need only state those words alongside the shipment details and then your agent will be authorised to bypass the EORI system and declare the goods for private use.

Of course VAT registered companies can reclaim the VAT they pay to HMRC and non-VAT EORI registered companies and private individuals cannot.

Unless it is food, this is usually based on the value of the goods for a straight ‘Home Use’ type entry (where no special procedure is requested).  Some food entries have duty (or levy) paid according to the net weight of the goods instead.

The value of the goods, the freight and any marine insurance are added together to form a Value for Duty.  Then the correct duty rate is applied to this value.  If the goods are also liable to import VAT then we take afore mentioned Value for Duty figure, add the Import Duty just calculated, and then on top of that we add UK charges (Port handling & release costs, UK delivery charge, customs clearance costs billed by your agent, and also UK insurance on delivery) and these are added to form the Value for VAT.  Then the VAT rate is applied to this figure (as of 2019 the standard Import VAT rate is 20%).  There is discussion within HMRC that post Brexit, Import VAT will be postponed for UK VAT registered businesses (regardless of whether cargo arrives into UK from the EEC or from outside).  This will mean there will be no need to actually pay the import VAT before the cargo is released by HMRC at the port.

I will not bore you with the many procedure codes that we agents short-hand as PCs, but as of 2018 the standard one is: PC 4000 000 – for Home Use Entries (i.e. with duties payable).

If we use this code, then after we have declared the value of your cargo, the customs computer will take the duty and VAT applied to your classification code, and payment is then arranged to HMRC.

So why do we need more than one PC code?  Well sometimes goods are imported just for a warranty repair (Inward Process Relief PC is used in this case), or goods are returned to UK after process in a non EEC country (in which case Outward Process Relief PC is used).

Sometimes crucial paperwork, or even the funds to clear the cargo will not be available for at least two months and so a Warehouse PC could be used in this case, delaying payment till the matter is resolved (however the cargo must remain in a customs-approved warehouse until that time, but at least it can be removed from the container to reduce rent and demurrage charges).

Maybe you are importing goods that were originally British before export from outside the UK and are now being returned (in which case Returned Goods Relief PC can be used).

These different PC’s can either reduce, negate or delay the payment of HMRC taxes, and this gives us the flexibility we need outside of the standard PC of 4000 000.

So if there is something more complex with your shipment, like British origin goods being returned to UK for example, be sure to let your customs clearance agent know at the start, as it much harder to undo these things once the original entry has been submitted to HMRC.

HMRC’s computer system relies on numbers and not words when calculating tax charges for your imported cargo.  That is why we use ten digit commodity codes instead of descriptions.

I must apologise to most importers if a statement in HMRCs online literature comes as a shock to them:

“You, as the importer or exporter are responsible for the correct tariff classification of your goods.  Union Customs Code Regulation 952/2013 Article 15 refers”

https://www.gov.uk/guidance/why-you-must-classify-uk-imports-and-exports

This is because you (or your client) will know the product better than a customs clearance agent, and unlike us, will know what it looks like.  After all, you would have done the research on the product before ordering a large shipment from overseas, and whilst we agents will do our best to show you what choices are available, it is you the importer that HMRC will take legal action against should an incorrect classification code result in underpayment of HMRC taxes.

Even when the mistake is an innocent one, they can make you repay unpaid taxes for up to four years prior to the mistake and this can add up over time, so it is advisable to get this code classified correctly from the start.  If you give Broadside good notice I can email you a form to complete and email onto the customs classification department.  They will email you back the commodity code number which you can pass onto your customs clearance agent (Broadside) so that the right amount of duty, VAT and other taxes are paid on import.

Because these shipping terms which should appear on the sales invoice your supplier has raised, will determine if any sea freight and/or marine insurance is to be added to the value of your product before import duty is calculated.  For example Incoterms FOB (Free of Board) means all charges have been paid up to loading onto the vessel in the foreign port (let’s assume Ningbo).  So we must add the freight from Ningbo to UK, plus any arranged marine insurance before calculating duty.

CIF UK port (Cost Insurance Freight) means that everything is paid up to the port of entry in the UK.

See link below for more information:

https://www.gov.uk/guidance/international-trade-paperwork-the-basics#international-trade-contracts-and-incoterms

Or just type SHIPPING INCOTERMS into your search engine to learn more.  The terms are usually written in 3 alpha form, i.e. FOB, CIF, DDP etc.

Some shipping lines will need an original Bill of Lading before they arrange delivery or release your cargo to a merchant haulier.  This is something you should check with your supplier before shipment.

If the relationship between seller and buyer is fluid then the seller may release the cargo overseas with no need to produce a hard copy Bill of Lading (only an ‘original’ version of this will be accepted).  If however the seller has never sold to the importer before, the Bill of Lading acts as transfer of ownership, and the seller may often arrange for the BL to be lodged with an associated bank in the UK (one that is near to your address) and, once you have paid your seller for the release of the goods through that bank, they will issue you with a few originals of the BL.  You then present one of them to the shipping line that control that BL document.  They can now either arrange delivery for you (under your instruction) or arrange release to a private merchant haulier if you so wish.

If someone scans a BL to you and it read as SURRENDERED or TELEX RELEASED (this term is still used today) or even WAY BILL then these documents do not need to be produced in original form.  However, if you are arranging release or delivery, and your name is not listed as ‘Consignee’ on the BL then you will need to get the named consignee to email a release over to the shipping line, releasing the cargo in your name.  Before the shipping line receives this, they will not take any instruction from you.

Some countries enjoy a reduced preferential rate of duty with the UK.  The reduction is allowed either because they are not fully developed commercially compared say to the USA, which does not raise origin preference documents for European imports.  Sometimes the reduction may be because the country’s government has committed to reducing arms or drug trading, which can be verified by the UK, and so they too may benefit from a reduced trading agreement.

These documents are usually either EUR documents or GSP documents (there is no hard and fast rule which country will issue which type of document, but your agent should be able to inform you which preferential group your sellers’ country belongs to).

As of July 2018 for example Trinidad and Tobago are part of the ACP group (African, Caribbean & Pacific) which can issue EUR forms, whilst Vietnam is part of the Generalised System of Preferences group that can issue GSP forms.

These forms can either reduce or negate the import duty paid on import to the UK.  If you do not produce this document on import, you can if you want, pay the duty on deposit, and reclaim the import duty on later submission of the preference form.  Some countries like Turkey have their own preference form, an ATR1.

These documents do not provide a blanket reduction of duty for all products, and may reduce duty on one commodity code, negate it on another, and not be applicable to the third.

In some cases the supplier overseas may be authorised to ‘self-authenticate’ their commercial invoices, to also act as a preferential document.  For those that can do this, they will have an approval number that the UK will recognise, and validate on inspection of their commercial sales invoice.

Yes, unfortunately demurrage (similar to a car park fee) will be charged even though you had no control over the examination taking place.  You see demurrage includes ‘quay rent’ (think of this as being what the council would charge the car park company for use of the grounds) and the Port who charge this to the shipping line, will bill this out regardless of the reason.  Unfortunately, everyone who gets billed ‘demurrage’ or ‘quay rent’ will claim it back from their customer, until it reaches the importer, who cannot claim back the charge, but must simply absorb it, and accept it as part of the risk of shipping cargo to the UK.

Shipping lines will have a ‘free period’ of time before demurrage (or rent) is charged.  These can vary from line to line, but most work within a 5-7 day ‘free period’ and most commence this from the container landing date (a few may still work from vessel arrival instead)

Basically because you do have a choice if the shipping company itself does not have enough drivers available to collect your container before the quay rent & demurrage starts.

You could always get an outside company to arrange the haulage for you, so they feel they have not cornered you into using their services with no other alternative available.  Therefore they will consider the charge justified even if there are not able to deliver your container prior to the demurrage start date.

I am often asked this, and it boils down to two factors, the landing date and the ‘cut-off’ period.

The landing date is when the container actually lands on the quayside in the UK. With vessels getting bigger and bigger it can take between 1-3 days for a container to come off the vessel.

The ‘cut-off’ period is when the shipping line (or merchant haulier) will no longer be legally required to monitor the progress of your cargo.  Before this period, they may chase the importer or agent for payment of charges, to cancel a delivery (on their own volition) because either the vessel has been delayed or there is a sudden shortage of drivers.  Many shipping lines will outsource the haulage to a third party with whom they will communicate on the status of your cargo. After the ‘cut-off’ period has passed, this information would cease.  After this point the driver is free to apply for your container and should it not be released by HMRC or a payment not be received, or the Bill of Lading has not been lodged with them yet, then you would be charged for the ’wasted journey’ as the driver will be unlikely to get another container to load at such short notice.  The charge you would have to pay is often the haulage rate for a second time to cover the wasted journey and for the actual journey when delivery is acceptable to both parties.  The second delivery if not soon, may also incur demurrage charges of course.  The ‘cut-off’ period is often set as midday on the working day before delivery.

And your clearance agent, as much as they want to please you, does not want to upset you by suggesting a delivery date on a Wednesday for a Monday vessel arrival when there is a good chance that the container will not land on the quay before 1200hrs on the Tuesday (‘cut-off’ period).  Hence a day 4 delivery for a day 1 vessel arrival is more likely to be suggested.

Also the gap may be wider between vessel arrival and delivery as West Midland and northern deliveries from southern ports often have a 2 day ‘cut-off’ period set (so those would be best set for a Friday delivery based on a Monday vessel arrival).

Also remember that vessel can be delayed, which is another reason for not being too optimistic on you expectations for a delivery within a few days of vessel arrival.

All these factors have to be accounted for, so bear this in mind when arranging any delivery.

In short it’s generally viewed as safer to use the shipping line that transported your goods to UK for haulage.  Why?  Well they own the container your goods are in, and so any error by their driver that results in damage to the container or a late return to the quay of the empty container after delivery would be for them to absorb.  However, if you request merchant (independent haulage) then their responsibility would end and yours would begin as they have handed their container into your charge when the error occurred.  In such a case, you would have to pay any fine or repair costs (or hopefully your merchant haulier would absorb this through their own insurance).

Also if you use merchant haulage you often have to pay the shipping line a handover fee (often around £70) and this is often called a LoLo fee.  They have the right to charge this anyway as it is a fee for taking the container off the vessel but it is usually waivered if you let them delivery the container for you.

That said merchant haulage can be cheaper on shorter journeys from the port (arguably 100 miles or less) and they are a great asset at bank holidays when shipping lines often get short of drivers, especially in the run up to Christmas.

The further away you get from the port of collection the more economical ‘grid’ delivery (used to refer to shipping line arrange haulage) can be.