CenGroup Director has said that SMEs are missing out on boosting their cashflow by failing to adopt customs warehousing.
Despite being introduced in January 2021, Steve claims that many businesses are still unaware of the benefits that customs warehousing offers to SMEs in particular.
Steve commented: “With margins being persistently squeezed due to driver wage hikes, increases in fuel and energy costs finding ways to streamline cashflow within your business is becoming progressively more important to boosting the bottom line.
“However, through storing goods in customs warehousing cashflow benefits to SMEs importing for instance £1-2 million worth of goods per month could be substantial – especially now that since Brexit, all goods imported from Europe are subject to customs clearance.
“A customs warehouse is essentially a space in which goods that are liable to import duty as well as VAT are stored.
“Storing goods in this way has multiple advantages for importers. In essence customs warehousing is advantageous for one simple reason: it preserves cashflow. By storing imported goods in a customs warehouse, duties are deferred until the goods leave the warehouse.
“This is predominantly because customs duty and VAT payments on certain goods are deferred until they are sold or removed from the customs warehouse and transitioned into free circulation.
“In many cases these tax cost savings can amount to as much as up to 25 and 30 per cent of the upfront cost of the imported goods or cargo.
“Equally, with no legislative requirement or need to pay duty and VAT on goods, if businesses re-export their goods or move goods to another customs procedure other than authorised use, then that duty would instead be paid in the country of destination. This would ultimately mean that double duty payments will be avoided entirely, leading to further savings and improvements to cashflow.
“Storing goods in customs warehousing not only provides cashflow benefits, but also cargo can be imported and stored either in preparation for peak season or simply to preserve the supply chain, preventing any potential delays caused by stock shortages or reduced warehousing space.
“While utilising the benefits of customs warehousing, whether it be independently or through a third party, it must be stressed that seeking out expert advice is imperative to ensure that businesses receive the correct advice and consultation relating to all aspects of customs warehousing to store goods.”
Steve advised that companies must also be aware of the recent changes to the CDS system, which is replacing Chief.
The Customs Declaration Service enables the management of customs financial accounts and download statements, however businesses will need specialist software in order to interact with HMRC systems. If unsure it is important to seek advice about to ensure compliance to avoid costly omissions and errors.
