For most UK businesses, customs declarations are handled by a freight forwarder or customs agent, often on either a direct or indirect basis. Many exporters/importers may not fully understand how this setup works, or the implications involved, but it’s essential for all parties to be clear on their responsibilities and liabilities. This understanding ensures that proper checks and audit processes are in place.
What is a customs declaration?
An export or import declaration is required when goods leave or enter the UK, regardless of the destination or origin. This official document outlines essential details on the goods, the reason for export/import so customs can assess duties, taxes or legal requirements. Completing a customs declaration requires access to the Customs Declaration Service (CDS) via specific software and specialised knowledge and expertise - which is why most businesses choose to work with a customs agent.
What does direct/indirect representation mean?
The representation level refers to the roles the customs agent (or freight forwarder) assumes when handling customs declarations on behalf of a business:
Direct Representation: This is the most common representation level used. The agent acts in the name of and of behalf of the business, usually based on clear instructions. The trader is solely liable for errors and customs debt. However, in the situation were the agent makes a “deliberate or unreasonable error”, the agent becomes jointly liable for errors and debt.
Indirect Representation: The agent will act in their own name on behalf of the business, sharing joint liability with the business for the accuracy and compliance of the declarations. Both parties could be held accountable for any errors or issues.
What can you do to manage your liability?
Your agent is most likely operating under direct representation, so providing clear instructions is crucial. While some agents offer a checklist, it’s wise to create your own, covering details like any special procedures (e.g., is it a repair?), the origin of the goods (e.g., are you claiming preferential rates?), and required licenses (e.g., dual-use items).
The clearer your instructions, the lower the risk of errors from your agent. However, if a mistake does occur and you’ve provided thorough instructions, your agent will be responsible for making amendments or compensations.
You should also check declarations to make sure you are satisfied with what has been declared and your compliance levels.
How can the Chamber help?
The Chamber can act as your customs agent (direct representation) – we pride ourselves on compliance so speak to our team at chambercustoms@gmchamber.co.uk to find out more. For more information about our services, click here
If this is new to you, consider joining our export/import training courses or completing a Foundation Award in International Trade.
Contact international@gmchamber.co.uk or call 0161 393 4314 to discuss further.
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