Top 10 Customs Clearance Mistakes (And How to Avoid Them)

# Top 10 Customs Clearance Mistakes (And How to Avoid Them)

Customs clearance errors cost UK businesses millions in delays, penalties, and lost opportunities. Here are the top 10 mistakes and how to avoid them.

## 1. Incorrect HS Code Classification

The Problem:
Using wrong commodity codes leads to:
- Incorrect duty calculations
- Customs delays
- Potential penalties
- Risk of audits

The Solution:
- Use professional tools like TariffGenius
- Cross-reference multiple sources
- Keep classification records
- Update codes annually (HS codes change)

Real Example:
A furniture importer used code 9403.60 (wooden furniture) instead of 9403.70 (plastic furniture). Result: 7% overpayment on £500K of imports = £35,000 lost!

## 2. Incomplete or Inaccurate Documentation

Required Documents:
- Commercial invoice
- Packing list
- Bill of lading/Air waybill
- Certificate of Origin (when claiming preferences)
- Import licenses (restricted goods)

Common Errors:
- Missing supplier details
- Incorrect product descriptions
- Wrong quantities or weights
- Missing HS codes

Fix: Create a documentation checklist and verify BEFORE shipping.

## 3. Undervaluing Goods

The Mistake:
Declaring lower values to reduce duties.

The Reality:
- HMRC uses sophisticated valuation databases
- You WILL get caught
- Penalties range from fines to criminal charges
- Damages business reputation

Correct Valuation Includes:
- Transaction value (what you actually paid)
- Shipping costs
- Insurance
- Royalties/license fees
- Assists (materials provided by buyer)

## 4. Ignoring Rules of Origin

The Issue:
Not understanding where goods "originate" from.

Why It Matters:
- Affects tariff rates
- Required for trade agreement benefits
- Wrong origin = wrong duty rate

Example:
T-shirt manufactured in Vietnam using Chinese fabric:
- Origin might be Vietnam (if substantial transformation occurred)
- Or China (if minimal processing)
- Different duty rates apply!

Solution: Get a binding origin ruling from HMRC for peace of mind.

## 5. Missing Deadlines

Critical Timeframes:
- Import declarations: Before or immediately upon arrival
- Duty payments: Usually 30 days
- Appeals: 30 days from decision

Consequences of Late Filing:
- Storage fees accumulate daily
- Demurrage charges from carriers
- Potential penalties
- Goods may be seized

Prevention: Set up automated reminders and buffer time.

## 6. Not Using Trade Agreements

The Opportunity Cost:
UK has Free Trade Agreements with 70+ countries but many importers don't claim preferences.

Example:
Importing £100K of goods from South Korea:
- Standard duty: 8% = £8,000
- With UK-Korea FTA: 0% = £0
- Savings: £8,000 (just need proof of origin!)

How to Claim:
- Obtain valid certificate of origin
- Declare preference on import declaration
- Keep records for 4 years

## 7. Incorrect Incoterms Usage

Common Confusion:
- EXW vs DDP
- CIF vs FOB
- Who pays what and when

Implication:
Wrong Incoterms mean:
- Unexpected costs
- Customs delays
- Insurance gaps
- Liability issues

Best Practice: Agree Incoterms in writing BEFORE purchase.

## 8. Forgetting About Restrictions and Prohibitions

Controlled Goods Require:
- Import licenses
- Certificates (safety, health, environmental)
- Special permits

Common Restricted Items:
- Plants and plant products (phytosanitary certificates)
- Food products (health certificates)
- Chemicals (REACH registration)
- Textiles from certain countries (quotas)
- Endangered species products (CITES)

Mistake: Assuming everything is freely importable.

Solution: Check HMRC's import restrictions database BEFORE ordering.

## 9. Poor Record Keeping

What You Must Keep (Minimum 4 Years):
- Import declarations
- Commercial invoices
- Proof of origin
- Payment records
- Correspondence with suppliers
- Classification decisions

Why:
- HMRC audits happen
- Disputes arise
- Refund claims require evidence
- VAT reclaims need documentation

Tip: Use cloud storage with good search functionality.

## 10. Not Getting Professional Help When Needed

DIY Works For:
- Simple, regular imports
- Low-value shipments
- Common products with clear classifications

Get Expert Help For:
- First-time imports over £10K
- Complex products (machinery, chemicals, food)
- Claiming trade preferences
- Restricted goods
- High-value shipments
- Audits and disputes

Cost vs Benefit:
- Customs broker fee: £50-200 per shipment
- Cost of one mistake: £1,000-£100,000+

## Your Action Plan

This Week:
1. Review your last 10 import declarations
2. Verify HS codes using TariffGenius
3. Check if you're eligible for trade preferences
4. Create a documentation checklist

This Month:
5. Audit your record-keeping system
6. Research trade agreements for your key suppliers
7. Get binding origin/classification rulings for main products
8. Train your team on common pitfalls

This Quarter:
9. Consider AEO (Authorised Economic Operator) status
10. Build relationships with customs broker and freight forwarder

## Tools to Help You Succeed

- TariffGenius: Accurate HS code classification ([Try free](https://tariffgenius.pro))
- HMRC Trade Tariff: Official UK duty rates
- Customs Declaration Service: Electronic declarations
- Chamber of Commerce: Certificates of origin

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Remember: Prevention is cheaper than correction. Invest time in getting it right the first time.

Last updated: October 2025