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THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING DO YOU HAVE CONFIDENCE IN YOUR CUSTOMS DUTY POSITION? Find out whether your customs duty arrangements are working by using our guide to identify potential risks and opportunities. DO YOU HAVE CONFIDENCE IN YOUR CUSTOMS DUTY POSITION? Recent experiences have highlighted the significant impact on margins that any mistakes in applying customs duty rules can have on businesses – from incorrect valuations on products leading to a deficit of duty being paid, to reliefs for rejected or returned goods not being appropriately claimed. Answer these questions to help evaluate your customs duty profile: 1 Do you know how much your company is paying in customs duty across the EU? yes/no 2Are you confident you are paying the right rate of customs duty? yes/no Yes to all Many businesses successfully use import agencies to clear goods. However, whilst diligent, speed of clearance is usually their priority and if any customs duty is due, responsibility lies with the business. It is therefore important to review your arrangement to ensure you accurately account for customs duty. To provide you with confidence in your customs duty arrangements, RSM has designed a guide which will help you identify key areas of uncertainty – and potential risks and opportunities. Still have questions? Our specialists can advise on how forthcoming changes to customs duty might impact you, and help you navigate these changes to give you the confidence that you understand and are prepared for these new developments. For further information please contact your usual RSM adviser. 2 Our survey indicates that you can have a fair degree of confidence in your existing customs duty arrangements. But, have you considered the impact of the 2016 customs duty changes? If you are importing goods in to the UK or elsewhere in the EU you should read our ‘Key issues’ of the European Union Customs Code addressing the new rules which come in on 1 May 2016. THE POWER OF BEING UNDERSTOOD 3Have you ensured you are claiming suitable reliefs? yes/no 4Have you considered whether certain reliefs, such as a customs warehouse, could save you money? yes/no 5Do you make use of reliefs available for rejected goods, returned goods etc? yes/no No to 1 or more Your answers indicate that you may need a bit more information on managing your customs duty arrangements. Are you aware of specific changes taking place in relation to customs duty? RSM might be able to help you identify possible costs and savings. In addition if you are importing goods in to the UK or elsewhere in to the EU you should read our ‘Key issues’ of the European Union Customs Code addressing the new rules which come in on 1 May 2016. Good news. However, to ensure you are on top of developments and to retain your level of confidence read our ‘Key issues’ of the European Union Customs Code addressing the new rules which come in on 1 May 2016. 3 KEY ISSUES OF THE 1 MAY 2016 EUROPEAN UNION CUSTOMS CODE Major changes are just around the corner, as on 1 May 2016 the European Union Customs Code comes into force, replacing the existing European Community Customs Code. If you import goods into the EU, it could impact you in the following ways: More information Our advisers would be pleased to talk to you about the customs duty changes and specific savings you could make. To discuss further, please contact your usual RSM adviser. • Increase in the financial guarantee required – Any UK business operating a customs warehousing or utilising inward processing or other customs duty reliefs, will need to provide a financial guarantee to cover the annual amount of potential duty that could be due. This change is expected to result in additional costs for the guarantee provision, as well as potential restrictions on working capital facilities in providing security to the guarantor. • The absence of Authorised Economic Operator (AEO) accreditation may result in additional cost – AEO is a supply chain systems accreditation, approved by HMRC. To qualify, a business needs to be able to demonstrate that its processes are customs compliant – a process that takes up to 6 months to achieve. Companies without AEO accreditation may struggle to qualify for suspensory regimes and may not be able to access guarantee waivers. • Duty liability of royalty payments – An increase in duty costs? Customs duty currently applies to royalty payments. However this is limited to where such payments are a condition of sale/import of affected goods. This limitation is expected to be removed and therefore other royalty payments will be subject to customs duty. Agreements which give rise to the payment of a royalty in respect of imported goods should be reviewed to determine whether there are any mitigation opportunities to reduce the expected increased in duty cost. • Customs valuation changes – Removal of first sale opportunity – The basis of customs valuation when importing goods is expected to change. It is likely to mean that the opportunity to use the ‘first sale for export’ value will be removed with instead, customs valuation being based on the final sale before import. There is expected to be a transitional period but this change will eventually lead to an increase in customs duty costs for those that are currently using the first sale relief. rsmuk.com The UK group of companies and LLPs trading as RSM is a member of the RSM network. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm each of which practises in its own right. The RSM network is not itself a separate legal entity of any description in any jurisdiction. The RSM network is administered by RSM International Limited, a company registered in England and Wales (company number 4040598) whose registered office is at 11 Old Jewry, London EC2R 8DU. The brand and trademark RSM and other intellectual property rights used by members of the network are owned by RSM International Association, an association governed by article 60 et seq of the Civil Code of Switzerland whose seat is in Zug. RSM UK Consulting LLP, RSM Corporate Finance LLP, RSM Restructuring Advisory LLP, RSM Risk Assurance Services LLP, RSM Tax and Advisory Services LLP, RSM UK Audit LLP, RSM Employer Services Limited and RSM UK Tax and Accounting Limited are not authorised under the Financial Services and Markets Act 2000 but we are able in certain circumstances to offer a limited range of investment services because we are members of the Institute of Chartered Accountants in England and Wales. We can provide these investment services if they are an incidental part of the professional services we have been engaged to provide. Baker Tilly Creditor Services LLP is authorised and regulated by the Financial Conduct Authority for credit-related regulated activities. RSM & Co (UK) Limited is authorised and regulated by the Financial Conduct Authority to conduct a range of investment business activities. Whilst every effort has been made to ensure accuracy, information contained in this communication may not be comprehensive and recipients should not act upon it without seeking professional advice. © 2015 RSM UK Group LLP, all rights reserved. 1016.