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UK businesses can take advantage of new Customs procedures legislation

Many UK companies are still uncertain about how to implement the impending changes, or even are unaware, of the European Union and HMRC legislation for goods passing through Customs procedures, which could have a direct financial impact on how they do business.

The new Union Customs Code (UCC) takes effect from May 1 2016 and is intended to standardise the movement of trade across EU member states, simplifying Customs rules and improving security and safety of both inwards and outwards goods, while HMRC’s Alcohol Wholesaler Registration Scheme (AWRS) comes into full effect from April 2017.

Financial penalties and restrictions imposed on goods are the downside for those not compliant, but on the flip side of what may be considered an imposition for many companies is the competitive advantage by having the correct accreditation in place, which is why they should be seeking support from Customs specialists.

Failure to be compliant with the new conditions of the UCC and one of its cornerstones, the Authorised Economic Operator (AEO) scheme, could damage vital sectors like logistics, which is worth over £74billion to the UK economy.

Langdon Systems, which has over 30 years’ experience in supplying Customs expertise and technology in a wide range of sectors, estimates that of the 196,000 UK businesses involved in logistics currently less than 400 are AEO authorised, well behind their main European competitors like Germany which has in excess of 11,000.

Each company’s AEO requirement may be different dependent on where they sit in the supply chain but the focus should be on mitigating risk and securing Customs processes by ensuring the standard is met, which should be viewed as an opportunity and can provide cost savings.

An AEO certificate is an internationally-recognised quality mark demonstrating that a company’s role in the supply chain is secure with Customs controls and procedures, which are efficient and compliant. Businesses with accreditation get quicker access to some simplified customs procedures and, in some cases, the right to ‘fast-track’ shipments through certain HMRC safety and security procedures.

Langdon Systems’ Customs Manager, Dave Bradbury, said: “AEO status will become a necessity for many businesses trading internationally. As well as the financial implications, failure to attain AEO status will result in delays of release for all goods from a Customs Procedure and the possibility of lengthy ones where further scrutiny/examination is required. It is important therefore that those providing logistics services are aware of the implications and impact on them when dealing with businesses authorised for Customs activities.”

Mr Bradbury added: “Around 40% of Langdon Systems’ existing client base has already taken advantage of our AEO programme for their Customs and logistics operations and the company is currently rolling out the offering to non-clients to help firms avoid the pitfalls of not being accredited, including withdrawal of existing Customs Authorisations.”

In addition to the UCC, new laws are coming into force to tighten the business-to-business sale of alcoholic beverages as HMRC cracks down on fraud to ensure the Exchequer gets its full share of excise duty, estimated at over £10billion annually.

To meet the requirements of HMRC’s AWRS registration scheme to tackle alcohol duty fraud businesses must review their obligations, even with companies who would not consider themselves to be wholesale.

The Wine and spirits sector, a fiercely cut-throat market where margins are very tight, leaves no room for error. Compliance with the latest tax schemes and EU legislation will provide for a significant competitive edge for companies over competitors who are incurring dwell time or additional guarantees to operate Customs Procedures.

Mr Bradbury concluded: “We’re working with high profile retailers and distributors of alcohol products to ensure that they are compliant with the new measures. However, even if you have Excise Duty sorted out, the new UCC from May 1st 2016 could upset the applecart for companies dealing with imported goods from outside the EU. You need software that can do all the legwork, such as the returns and reporting to other member states for checking recipients and guarantees for the movement of goods.”

In an environment in which industry is increasingly targeted, compliance and assurance for legitimate business is paramount. Prevention of exposure to fraud, financial difficulties and possible legal action is essential.

To find out further details of software solutions and the AEO training programmes or seminars please contact Langdon Systems Tel. 01942 202202 or visit http://aeo.langdonsystems.com/

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