Firms should take practical measures in line with HMRC proposed customs revamp

The plan is one of around 40 government proposals to simplify and modernise the tax and customs framework by reducing administrative burdens, modernising HMRC processes and improving compliance across the tax system.

The introduction of a voluntary disclosure mechanism is expected to have significant implications for importers and exporters, businesses acting as ‘importer of record’, customs intermediaries, freight forwarders and organisations operating complex international supply chains. It will also be particularly relevant for businesses that regularly submit customs declarations, either directly or through third-party agents

“Many businesses discover declaration errors months or even years after goods have been imported or exported. The current process for correcting historic customs errors can be fragmented and, in some cases, uncertain. A formal voluntary disclosure framework should provide greater clarity around how businesses can disclose errors to HMRC in a consistent and structured manner,” said Sukhbir Binning, tax law expert at Pinsent Masons.

The government’s stated aim is to encourage timely and unprompted disclosures, improve compliance and reduce administrative burdens. It also suggests HMRC wishes to resolve customs compliance issues more efficiently and focus its resources on deliberate non-compliance rather than businesses seeking to correct genuine mistakes.

Until further details are published, businesses should take practical steps to strengthen their customs governance arrangements, Binning said.

“Firms should begin reviewing internal compliance processes to ensure customs errors are identified and escalated promptly, undertaking regular customs health checks, and maintaining robust audit trails to support customs declarations,” she said. “Firms should also begin assessing whether there are historic customs errors as well as monitoring developments as HMRC publishes further details of the framework and considering whether internal compliance procedures need to be updated once the new regime is introduced.”

The proposals broadly align with HMRC’s wider objective of encouraging taxpayers to ‘get it right first time’ and engage proactively where issues arise.

“However, the effectiveness of this framework will depend heavily on its design. Specifically, clarity will be needed around eligibility, the extent of penalty mitigation, and how the regime interacts with existing customs post-clearance processes and voluntary amendment mechanisms. Without this, there is a risk that businesses may remain cautious about engaging fully, particularly where there is uncertainty as to whether a disclosure could trigger wider scrutiny,” said Binning.