Don't Let the Current Economy Impact Your Customs Duties

Businesses to Face Continuing Challenges

Just when we thought we were entering a phase of ‘new normal’ following the pandemic and Brexit, we now find ourselves in the grip of a humanitarian and economic crisis that could have a significant impact on your customs duties. However, Barbourne Brook can help you navigate these challenges and mitigate your customs duty risks.

Inflationary Pressures Adding to Customs Costs

Energy prices are continuing to go through the roof. The increase in energy costs is likely to add further to shipping costs. The customs value includes shipping costs, so duty costs will also rise. We recommend looking at ways of offsetting these customs costs through the use of duty reliefs or deducting other qualifying elements from the customs value.
Interest rates increases will be added to the cost of finance. Finance costs, e.g. deferred payment terms, are often included in the invoice price adding to customs costs. With appropriate planning, you can strip out finance costs from the customs value.
Exchange rate volatility also significantly impacts customs costs as non-sterling prices are converted to sterling at the HMRC exchange rate. HMRC uses its rate even if your business has hedged your currencies. Looking at alternative less volatile currencies may mitigate uncertainty.

Increasing oil price , high price of oil, growing arrow graph

The Ukraine Impact

Imports from Ukraine and Russia are non-existent.
Shipping routes are also being affected, with ships having to avoid specific routes.
There is a risk that other countries supporting Russia will have sanctions applied, especially if intelligence indicates Russia is accessing global markets and breaking sanctions by routing goods through these countries.
Companies should be looking at supply chain sensitivities and consider mitigation such as dual sourcing.

Our Customs Analytics Tool Can Help You

Using our Customs Analytics Tool, Barbourne Brook’s team of experts can quickly provide information on the impact of the aforementioned economic factors.

Find more information on Customs Analytics here.

Get in touch today.