Customs audits are becoming a more common feature of the UK trading landscape and businesses should expect checks to increase now that HMRC has made declaration data freely available.
That was the clear message from the latest Global Trade Live webinar, hosted by the Chartered Institute of Export & International Trade earlier this week (14 April), where over half of the audience (56%) said their business had gone through an HMRC audit in the last five years.
The session came shortly after HMRC made its customs data report service available to all businesses at the start of April. Through this service, businesses can download declaration data submitted into the Customs Declaration Service (CDS) in their name for free.
This replaces the Management Support System (MSS) reports that businesses previously had to pay a subscription for.
Businesses ‘must comply with the laws’
Ilona Kawka, Imports Advisory Practice lead at the Chartered Institute, explained that businesses now had no excuse ahead of an HMRC audit because they now had free access to their declaration data.
“All UK companies that trade goods cross‑border must comply with the laws and regulations, and because of that, they can be subject to customs audits from HMRC,” Kawka said.
HMRC audits can cover records going back three years or more and may examine commodity classifications, valuations, origin claims, use of special procedures and broader record‑keeping practices.
She warned that businesses should not underestimate the consequences of getting things wrong, noting that serious cases of non-compliance can result in penalties, the removal of customs authorisations and even criminal investigations.
“Even the overpayment of duties can indicate a lack of compliance,” she noted.
Kawka also highlighted a report last year that said HMRC was looking to hire 5,500 new compliance officers as evidence that the government is looking to increase enforcement.
Increase in ‘desktop audits’
Tom McGroder, director global trade compliance excellence (EMEA) at Cargill, said that he had noticed a resurgence in audit activity following a lull during the Covid-19 pandemic, and in the immediate period aftermath of Brexit.
“In the last couple of years, we have seen an increase in what I would call desktop audits,” he said, explaining that auditors have often looked to review his company’s customs data remotely, rather than on site.
McGroder added that businesses’ preferential origin claims have also come under greater government scrutiny in recent years, with businesses looking to qualify for reduced tariff rates under free trade agreements, including the UK-EU Trade and Cooperation Agreement.
He also stressed that businesses using customs special procedures, such as inward or outward processing reliefs, must be able to trace goods end‑to‑end.
“If you’re scrambling around trying to find records, it’s a red flag to an auditor that you really don’t know what you’re doing.”
‘Compliance hygiene’
Charlotte Richardson, trade compliance specialist at Adtran, echoed the importance of embedding compliance into day‑to‑day operations, rather than treating audits as one‑off events, and described this as having good “compliance hygiene”.
“Regular checks on import and export data are essential,” Richardson said, noting that even small errors can become compliance issues. She said this also includes reviewing declaration data submitted by intermediaries on a business’ behalf.
“Just because it’s DHL or FedEx doesn’t mean they’re getting it right every time. As the importer of record, it’s still your responsibility.”
Richardson also shared insights from undergoing Authorised Economic Operator audits, which she described as “a whole business assessment” that extends far beyond customs declarations.
Despite their intensity, she encouraged businesses to see audits as constructive.
“Audits can be a really good opportunity to learn from the auditors. They don’t need to just be something that we all fear and dread.”
Understand your data
The webinar also covered how digital tools can be used by businesses to interpret and organise declaration data ahead of an audit.
Dominic McGough, founder and CEO of Customs Plus, said that while HMRC’s new customs declaration data report service is important, the responsibility lies with the business to use the service appropriately.
“This is a dashboard of data that’s been submitted, not a dashboard of data that’s been audited,” he cautioned.
Digital tools like MyCustomsInfo can support businesses to identify risks before HMRC does by flagging data inconsistencies and red flags.
McGough’s final advice was unequivocal:
“If you find a problem, disclose it voluntarily. Don’t sit on it and don’t hide it.”
Always be prepared
Across the panel, the consensus was clear: strong data, documented decision‑making and a proactive approach to compliance are no longer optional.
In an era of increased enforcement, preparedness is the best defence.
