Check you are presenting the correct classification and declarations to HMRC

Logfret issues warning – Ensure correct classification of your products

Simon Huntley at Logfret (UK) Ltd, is urging businesses to check that they are presenting the correct classification and declarations to HMRC:

We were recently approached by a new customer that had previously transported powder puffs - including applicators - under a duty-free cosmetics HS code. Upon examination, HMRC deemed that the container and puff were the dominant HS code for the goods and reclassified the shipment, charging 2% tax. This was also backdated to include previous shipments.

To avoid future instances of noncompliance, Logfret, in conjunction with HMRC, completed a full review of their products and the customer was very happy with the service they received.

Export licensing and compliance is also a very important part of day-to-day trade worldwide. Many items are classed as dual use and it can often be difficult to tell what they are.

Would it surprise you to know that anything produced specifically for the Military, using their technical specifications, e.g. a shut-off valve, and then put on general sale by a manufacturer, will still require an export license, regardless of who is buying the goods? The company - ultimately the Directors - will be held responsible for ensuring that they provide the relevant paperwork for the sale of the product and satisfy the export compliance regulations.

Many shippers are under the impression that selling their goods EX WORKS means that they are no longer responsible, in any way, for the goods once they leave their premises. This is not the case in the eyes of HMRC and the ECJU, as shown below:

Notes from HMRC (which links in with Article 27(1)(b)(ii) of the Order)

– If an overseas company (the buyer) is invoiced for the goods, then the UK seller is liable for the exporting of the goods (as far as HMRC are concerned), regardless of whether or not the goods are then picked up by the buyer’s shippers.

A Unha-3 rocket fired by North Korea was recovered by the Japanese Navy and found to contain temperature/pressure sensors from the UK and parts from USA/China and Republic of Korea. The companies involved were prosecuted.

The impact of non-compliance can have disastrous consequences for businesses. If you are in any doubt, it’s advisable to enlist the services of an expert to ensure your goods are classified correctly. Logfret have the experience and know-how to be able to advise customers, and we welcome your enquiries. Call 01952 971 628, or email lhr@logfret.co.uk