Failure to prepare for the new customs duty arrangements could hit the bottom line of textile, fashion and footwear importers, accountancy experts have warned.
The new Union Customs Code, which aims to streamline legislation and procedures across the EU, comes into force on May 1, 2016.
Under it, wholesalers, distributors and retailers that import goods will need to obtain Authorised Economic Operator status in order to avail themselves of the EU’s duty suspensions scheme.
The scheme allows the duty-free importation into the EU of raw materials and semi-finished products that cannot be supplied (or supplied in sufficient quantities) from EU or Turkish manufacturers and are used to make another product.
AEO status is given to companies that have passed a robust supply chain inspection and can show their customs controls and procedures are compliant. In some cases it allows firms to fast-track shipments through certain HMRC safety and security procedures.
Ian Carpenter, head of indirect taxes at accountancy firm Baker Tilly, said: “Some importers will find they will need to change the way they manage their supply chain; others will need to obtain AEO authorisation.
“Careful preparation is required as any mistakes in customs duty can have a significant impact on margins. This can be from incorrect valuations on products leading to a deficit of duty being paid or from reliefs for rejected or returned goods not being appropriately claimed.”