Customs debt liability
What happens if you underpay import or export duties and who is responsible for the debt.
A customs debt is the amount you owe for import or export duties. Import duty is any customs duties payable on goods imported into the UK or EU, such as:
- anti-dumping duties
- Common Agricultural Policy (CAP) charges
- import VAT
Customs debt notification
If HMRC believes you’re liable for customs debt, we’ll send you a letter to let you know the decision we intend to make. You have 30 days from the date the letter was issued to reply with any information that might affect our decision — this is known as your ‘right to be heard’.
If you do not reply within 30 days, or the information you’ve given does not change HMRC’s decision, you’ll receive a final decision letter. This is the notification of the debt. A post clearance demand note (C18) to tell you that the customs debt is now due, along with instructions on how to pay, will be sent separately.
If you still disagree with the decision you can submit an appeal.
HMRC have 3 years from the date the customs debt was owed to notify you about it. This is normally the date of the customs entry. The 3-year notification period also applies to the repayment and remission process, and one year for rejected imports. This can be extended to a minimum of 5 years and a maximum of 10 years for entries on or before 31 December 2020.
For entries on or after 1 January 2021 the notification period can be extended up to 20 years.
Make a voluntary disclosure
You can submit a voluntary disclosure to report an underpayment for the import of goods for customs duties and import VAT. A business or representative can submit a voluntary disclosure to HMRC for the following:
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errors or mistakes identified after the original customs declaration has been submitted
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before the importation or exportation of goods has taken place, where there is a failure to submit a customs declaration allowing the release of goods into free circulation
A voluntary disclosure can be submitted at any time to make adjustments or amendments not identified on the original customs declaration form. A C18 demand note will be issued to collect the underpayment.
How to submit a voluntary disclosure claim
You can use form C2001 to declare an underpayment for the import of goods declared through either:
- Customs Handling of Import and Export Freight (CHIEF)
- Customs Declaration Service (CDS)
This will result in a charge (C18) being raised for the extra duty or VAT due.
If a higher figure is calculated, HMRC will tell the agent or consignee who submitted the C2001 form. We will then issue a C18 demand note to collect the additional customs debt.
If you made your declarations using CHIEF
You should report the underpayment using form C2001. You’ll receive a payment slip you can use to make the payment.
If you made your declarations using the Customs Declaration Service
You should report the underpayment using form C2001CDS. You’ll receive a payment slip you can use to make the payment.
Interest on customs debt
You’ll be charged interest on any debts paid more than 10 days after the issue of the C18. You’ll be notified of the interest charge separately, after payment of the debt.
Who is liable
The person or organisation who made the customs declaration for the imported goods is the debtor. This means that they are liable for the customs debt.
If you are the declarant but use an agent or representative to make a customs declaration on your behalf, they may be liable depending on the type of representation.
VAT Groups
The debtor will either be:
- the member company which makes the customs declaration
- an agent acting on behalf of the member making the declaration, depending on the type of representation
Someone dealing with customs for you
A person or organisation (the principal) may appoint an agent to act on their behalf. The agent must be established within the UK for customs purposes.
Types of representation
There are 2 types of representation. They are:
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direct representation, where the representative acts in the principal’s name — using code 2 in box 14 of the customs declaration
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indirect representation, where the representative acts in their own name but on behalf of the principal — using code 3 in box 14 of the customs declaration
The representative will be acting in their own name (and on their own behalf) if they either:
- do not state the type of representation on the customs declaration
- are not empowered to act as a representative
You should keep written confirmation of the type of representation agreed between the agent and the principal.
Direct representation
If an agent acts as a direct representative of the principal, the principal is solely liable for the customs debt.
But the agent may become jointly and severally liable if both of the following apply:
- the principal gives clear instructions
- the agent makes a deliberate or unreasonable error
If the agent wants to delegate tasks to a sub-agent, the agreement between the agent and the principal must make an allowance for this. If it does not, the sub-agent will:
- not be empowered to directly represent the principal
- be considered as acting on their own behalf
- be fully liable for any customs debt that occurs
If you’re established in the UK and import goods into Great Britain (England, Scotland and Wales), you can ask someone to act directly, even if they’re making a declaration using:
- simplified declarations procedures
- an entry in the declarant’s records
You should agree with your agent if you need to have a duty deferment account to make payments, or if they’ll use their own.
Indirect representation
If an agent makes a customs declaration as an indirect representative of the principal, they will both be jointly and severally liable for any customs debt. HMRC may seek payment from either the agent or the principal.
If the agent is the holder of the authorisation for a customs procedure (such as inward processing or a customs warehouse) that the goods have been placed under, they’ll be responsible for any debt owed as a result of:
- procedure not being discharged correctly
- any action taken by them that caused goods to be unlawfully removed from customs control
Agents acting as indirect representatives can ask sub-agents to represent them in a direct capacity. The sub-agent only becomes liable for the debt if they make a deliberate or unreasonable error that would make them jointly and severally liable.
Last updated 23 April 2024 + show all updates
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The 'Customs debt notification' section has been updated to correct an error. HMRC will send you a 'final decision letter' to notify you of your debt. You will receive instructions on how to pay HMRC and a post clearance demand note (C18) separately from this letter.
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More information added about customs debt notification letters and who is liable for customs debt through indirect representation.
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Information about when a sub-agent becomes liable to a debt has been updated in the 'Indirect representation' section of the guide.
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Guidance about customs debt notifications has been updated.
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Information about the 3-year notification period, making a voluntary disclosure and direct representation have been updated. A new section about how to submit a voluntary disclosure claim has been added.
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Information about changes to how HMRC deal with interest charged on late payments of duty has been added.
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Updated the details about interest on customs debt - the information about the minimum charge has been removed.
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If you’re established in the UK and import goods into Great Britain (England, Scotland and Wales) you can ask someone to act directly using their own authorisation, to make declarations using either simplified declaration procedure or entry in the declarant’s records.
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Information has been added to explain when to use either form C2001, or C2001CDS.
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First published.