What to do when you cannot pay Customs and Excise fees

When importing goods from a non-EU country, your business needs to pay customs duty before the items can enter. Excise duty is a tax applied to specific imported goods like alcohol, tobacco, and fuel, in addition to customs duty.

It’s important to clear your goods through UK customs for effective trading because delays can significantly impact your business’s cash flow and profits. Before exploring what happens if you can’t pay your customs and excise fees, let’s understand what these charges entail.


How are customs fees calculated?

Customs fees include three main parts:

  • UK Duty: This is a percentage based on the type of goods, their value, and where they came from.
  • VAT: Currently set at 20% of all charges.
  • Extra costs: These cover things like storage and testing of goods by UK Customs.

Whether you usually pay customs and excise fees right away when goods are imported, or HMRC allows you to delay payment, not meeting these obligations can be really bad for your business.


What happens when my business can’t pay the required customs and excise duty?

If you don’t pay customs and excise fees, your goods will be kept in a storage warehouse until you settle the payment. You’ll also have to pay additional costs for this. If the goods can’t enter the UK, you’ll face the added expense of sending them back to their home country, hoping your supplier will refund you or deal with the official destruction of the items.

To avoid a customs disaster and make sure you can distribute your imported goods in the UK as intended, what steps can you take?


Control cash flow

Properly handling your cash flow helps you pay your bills on time and avoids issues with suppliers and HMRC. Cash flow forecasts, which predict your detailed cash needs over a period, also help you address any shortages that may come up.


Seek professional help

Getting assistance from licensed insolvency practitioners (IPs) lets you give your business a thorough check-up to ensure you’re not on the road to insolvency. IPs can find the best solutions for you, such as applying for HMRC’s Duty Deferment Scheme, which allows you to delay payment for up to 30 days.


Additional finance

You might manage to settle your customs and excise fees by securing extra business funding. Various finance options are accessible to businesses, providing an alternative to traditional banks, and some can be secured quite swiftly. These encompass financial products based on the value of your tangible assets and your sales ledger. The most suitable option depends on the nature of your business.

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Formal insolvency

If your business is officially insolvent and has multiple debts, you might be able to enter a process that shields the business from closure. Company administration is one such process that could help – it provides a period of protection during which the best options can be figured out without worrying about legal actions.

If you need more help when you can’t pay your customs and excise fees, please get in touch with one of our licensed insolvency practitioners at Vanguard Insolvency. We’re a significant part of Begbies Traynor Group – the UK’s largest professional services consultancy – and specialise in business rescue and recovery. With offices spread across the UK, we can offer free same-day consultations.

Senior Partner at Vanguard Insolvency Practitioners | Website | + posts

I am an insolvency professional with a distinguished career specialising in commercial insolvency, adeptly navigating Creditors Voluntary Liquidation, Company Voluntary Arrangements, and Company Administrations. With a comprehensive understanding of insolvency laws and an unwavering commitment to ethical practices.