A customs debt is the amount you owe for import or export duties. Import duty is any customs duties payable on goods imported into the UK or EU, such as:

• Common Agricultural Policyyou (CAP) charges

When you get a customs debt notification

If HMRC believes you’re liable for customs debt, we’ll send you a letter to let you know the decision we intend to make. You have 30 days from the date the letter was issued to reply with any information that might affect our decision — this is known as your ‘right to be heard’.

If you do not reply within 30 days, or the information you’ve given does not change HMRC’s decision, you’ll receive a final decision letter. This is the notification of the debt. A post clearance demand note (C18) to tell you that the customs debt is now due, along with instructions on how to pay, will be sent separately.

If you still disagree with the decision you can make an appeal.

HMRC have 3 years from the date the customs debt was owed to notify you about it. This is normally the date of the customs entry. The 3-year notification period also applies to the repayment and remission process, and one year for rejected imports. This can be extended to a minimum of 5 years and a maximum of 10 years for entries on or before 31 December 2020.

For entries on or after 1 January 2021 the notification period can be extended up to 20 years.

Make a voluntary disclosure

You can submit a voluntary disclosure to report an underpayment for the import of goods for customs duties and import VAT. A business or representative can submit a voluntary disclosure to HMRC for the following:

• errors or mistakes identified after the original import or export declaration has been submitted
• before the importation or exportation of goods has taken place, where there is a failure to submit a import or export declaration allowing the release of goods into free circulation

You can submit a voluntary disclosure at any time to make adjustments or amendments not identified on the original import or export declaration form. A C18 demand note will be issued to collect the underpayment.

How to submit a voluntary disclosure claim

You can declare an underpayment for the import of goods declared through the Customs Declaration Service (CDS).

You’ll then be able to make a payment for the extra duty or VAT due by:

• using a duty deferment account to pay online
• requesting a charge (C18) by post — you’ll receive a payment slip you can use to make the payment

Interest on customs debt

You’ll be charged interest on any debts paid more than 10 days after the issue of the C18. You’ll be notified of the interest charge separately, after payment of the debt. You may also be charged interest on debts that arise after your goods have been released or where HMRC correct a declaration you have made. You will be notified of the charge when you receive your duty liability notification letter.

Who is liable

The person or organisation who made the import or export declaration for the imported goods is the debtor. This means that they are liable for the customs debt.

If you are the declarant but use an agent or representative to make an import or export declaration on your behalf, they may be liable depending on the type of representation.

The debtor will either be:

• the member company which makes the import or export declaration
• an agent acting on behalf of the member making the declaration, depending on the type of representation

Someone dealing with customs for you

A person or organisation (the principal) may appoint an agent to act on their behalf. The agent must be established within the UK for customs purposes.

Types of representation

There are 2 types of representation. They are:

• direct representation, where the representative acts in the principal’s name — using code 2 in box 14 of the import or export declaration

• indirect representation, where the representative acts in their own name but on behalf of the principal — using code 3 in box 14 of the import or export declaration

The representative will be acting in their own name (and on their own behalf) if they either:

• do not state the type of representation on the import or export declaration
• are not empowered to act as a representative

You should keep written confirmation of the type of representation agreed between the agent and the principal.

Direct representation

If an agent acts as a direct representative of the principal, the principal is solely liable for the customs debt.

The agent may become jointly and severally liable if both of the following apply:

• the principal gives clear instructions
• the agent makes a deliberate or unreasonable error

If the agent wants to delegate tasks to a sub-agent, the agreement between the agent and the principal must make an allowance for this. If it does not, the sub-agent will:

• not be empowered to directly represent the principal
• be considered as acting on their own behalf
• be fully liable for any customs debt that occurs

If you’re established in the UK and import goods into Great Britain (England, Scotland and Wales), you can ask someone to act directly, even if they’re making a declaration using:

• an entry in the declarant’s records

You should agree with your agent if you need to have a duty deferment account to make payments, or if they’ll use their own.

Indirect representation

If an agent makes a import or export declaration as an indirect representative of the principal, they will both be jointly and severally liable for any customs debt. HMRC may seek payment from either the agent or the principal.

If the agent is the holder of the authorisation for a customs procedure (such as inward processing or a customs warehouse) that the goods have been placed under, they’ll be responsible for any debt owed as a result of:

• procedure not being discharged correctly
• any action taken by them that caused goods to be unlawfully removed from customs control

Agents acting as indirect representatives can ask sub-agents to represent them in a direct capacity. The sub-agent only becomes liable for the debt if they make a deliberate or unreasonable error that would make them jointly and severally liable.