Anna Doherty is the Chartered Institute of Export & International Trade's Customs Advisory Practice director.
It’s been a difficult few years for UK traders. Brexit’s impact on trade with the EU is well documented, with many SMEs in particular finding new customs processes and requirements arduous and costly.
Then US President Donald Trump returned to the White House with a tariff policy that has significantly added to the cost of trade with the UK’s second largest trading partner.
For traders, staying on top of new rules and processes has become an increasingly difficult task. Non-compliance with customs rules and tax miscalculations, including under or overpayments of duties and import VAT, have become more likely amid this complexity.
Continual change
Customs rules and procedures are continuing to change in both the US and EU as well, meaning UK traders need to be ever vigilant. For example, the US last year removed its low value imports relief, also known as ‘de minimis’.
Under this scheme, goods valued under US$800 could enter the US market without incurring customs duties and documentation. The relief had been relied upon by e-commerce exporters for years, and its removal – designed to halt cheap Chinese goods from flooding the US market – has been challenging for many UK SME exporters to the country.
The EU intends to follow suit by removing its own de minimis threshold, with new customs and handling fees to be introduced for low value imports from July this year. The UK is also looking at reforming its low value imports regime and is currently consulting with industry on this.
Stricter policing of rules
These changes reflect what many observers have called the ‘weaponisation of trade policy’ and the return of protectionism. Governments around the world are also taking extra steps to ensure new tariffs and rules are being enforced.
For example, Trump’s ‘One Big Beautiful Bill’, passed in 2025, is enabling the US Customs and Border Protection to go on a hiring spree to increase its number of customs officers to enforce hiked duties on imports. In the UK, HMRC is currently recruiting 5,500 new officials to support compliance enforcement.
Agencies like HMRC are becoming increasingly strict in their monitoring of duty payments and enforcement of customs compliance, with a significant increase in company audits taking place in recent years.
Green shoots of optimism
However, there are causes for optimism.
The UK has secured free trade agreements with various countries, from India to Japan, lowering tariffs for its exports.
It is also negotiating with the EU to reduce some of the administrative burden that’s come in since Brexit and avoided the worst of Trump’s reciprocal tariffs last year through the UK-US Economic Prosperity Agreement.
The UK hopes that this agreement will remain effective while uncertainty remains over US trade policy following the recent Supreme Court ruling over the legality of last year’s tariffs, and Trump’s subsequent imposition of a new global duty on imports into the country.
Despite the UK’s various trade deals, many businesses remain concerned about the level of change in international commerce and the risk that this complexity can eat into any profits they make through it.
Costly mistakes
Earlier this month, I wrote about the importance of being on top of customs processes from the point of view of avoiding underpaying duties. It’s pretty clear that you don’t want to come to a compliance audit and realise you’ve got a significant sum of unpaid taxes that you need to suddenly repay.
However, we also often hear businesses report that they’ve had the opposite problem – that they’ve been overpaying customs duties or import VAT.
For instance, a business may have accidentally fallen foul of anti-dumping or countervailing duties because they’ve misclassified their goods.
Or they may even be losing out on lower rates when importing from a country the UK has a free trade agreement with, because they haven’t claimed the preferential tariff when submitting the customs declaration for originating goods.
Or a company could be overpaying on duties because they’ve incorrectly determined the customs value of their goods by not making the appropriate deductions.
These mistakes can be difficult to spot and can, over time, significantly eat into already tightening margins. If left unchecked, they can also lead to businesses undervaluing their growth prospects in their export markets.
Reclaiming import VAT and duty overpayments
The good news is that, if you can spot duty or import VAT overpayments, the government can pay this back to you, provided you make your claim within prescribed timelines and meet the relevant conditions for reclaim.
Generally, you have three years from the date of acceptance of the import entry, however there are factors that may shorten that window such as validity of the proof of origin for preference claims.
HMRC has a repayment webpage with instructions for how you can do this via your next import VAT return or the Customs Declaration Service (CDS) for duties.
How to avoid duty overpayments
Most companies will want to avoid needing to do this in the first place. To ensure you’re on top of your duty and VAT payments, and avoiding any risk of under or overpaying, here are some practical bits of advice.
Firstly, make sure you have access to the data that has been submitted in your company name into CDS, whether by internal staff or intermediaries. HMRC used to charge for this data, but it’s now freely available through the ‘Get customs data for import and export declarations’ dashboard. This is a relatively new service and is something the Chartered Institute’s team of customs advisors is giving many businesses support on currently.
Secondly, look at what technologies are available to help you sift through this data and identify overpayments quickly.
For instance, MyCustomsInfo has some really useful dashboards and analysis tools for reviewing declaration data, helping you to identify overpayments, keep your business aligned with updating HMRC repayment requirements and helping to protect your profitability.
Finally, a pair of fresh eyes is always a good idea when it comes to reviewing your trade costs and processes. Our advisory services are designed to give you access to independent customs expertise and support, whether through compliance health checks or support applying special procedures.
