Customs Update: Summer 2025  

Fiona Parsons
21 July 2025

Navigating the complex world of customs can be a daunting task for exporters and importers alike. During the “Talking Trade & Summer BBQ 2025” event, Neil Bird, Customs and Trade Advisor at Gaston Schul, delivered an insightful talk on the latest customs updates and shared practical advice to help traders ensure compliance while minimising risks.  

If your business is trading internationally, staying informed about regulatory changes and customs best practices is essential. Here are the key highlights and actionable insights from Neil's session.  

1. Understanding Customs Valuation  

Customs valuation plays a critical role in international trade as it determines how much duty and tax traders will pay on imported goods. Neil referenced new guidance introduced by HMRC on 25th June 2025, aiming to clarify the process of customs valuation.  

Key takeaways: 

Valuation beyond the invoice: Simply relying on the invoice value may not suffice. For example, if your goods are imported under FOB (Free on Board) terms, the customs value must also include freight, insurance, and any additional costs incurred to bring the goods to the UK.  

Recent tribunal learnings: Neil shared a cautionary example of a logistics business held liable for over £1 million in VAT due to errors in compliance procedures. The case highlighted the importance of meticulous recordkeeping and ensuring alignment between declaration responsibilities and actual evidence.  

Practical advice: 

  • Familiarise yourself with the latest HMRC guidance and apply its principles in your customs processes.  
  • Review your customs valuation practices to avoid under-declaring or over-declaring values.  
  • Engage a trusted customs advisor if you’re unsure about your valuation compliance.  

2. Mastering Rules of Origin  

One of the most common pain points in international trade is proving compliance with rules of origin (ROO), especially when claiming preferential duty rates under Free Trade Agreements (FTAs).  

Neil highlighted the importance of understanding ROO to avoid penalties or losing cost advantages, referencing a case where an exporter’s use of “German origin” instead of "EU origin" invalidated preferential treatment under the EU-UK TCA.  

Key Takeaways: 

  • Accuracy is everything: Ensure that the precise language required for declarations is used. Different agreements may stipulate different wording, and even small errors can have significant consequences.  
  • Keep documentation in order: Every stage of production and material origin must be traceable to ensure compliance with ROO requirements.  

Practical advice: 

  • Review your supply chain and operations against the product-specific Rules of Origin in relevant FTAs.  
  • Provide training to staff involved in export documentation to minimise human error.  
  • Don’t assume that one ROO approach works for all markets - adjust for each agreement.  

3. Using Postponed VAT Accounting (PVA)  

Many UK businesses rely on postponed VAT accounting to manage cash flow when importing goods. Neil emphasised the importance of ensuring clear instructions are given to customs brokers. A lack of written agreement on using PVA can leave traders liable for unexpected VAT bills.  

Key takeaways: 

  • Clarity is critical: Always confirm in writing with customs brokers whether PVA is to be applied.  
  • Use the right capacity: Ensure you understand whether your broker is acting in a direct or indirect capacity and the implications this has for VAT liability.  

Practical advice: 

  • Regularly audit your customs declarations and check that PVA is applied correctly.  
  • Discuss your VAT strategy with your broker and confirm arrangements to avoid costly misunderstandings.  

4. Preparing for compliance audits  

Neil touched on the growing trend of HMRC conducting stricter compliance audits. Whether it's related to sanctions, restricted goods, or documentation inconsistencies, traders must prove they are meeting all obligations.  

Key takeaways: 

  • Stay ahead of the game: Proactively audit your own processes to identify weak spots before HMRC does.  
  • Adapt to regional rules: Different markets may have localised restrictions or reporting requirements that need to be addressed.  

Practical advice: 

  • Partner with compliance experts during your annual audits.  
  • Invest in digital systems or platforms to streamline documentation and ensure traceability.  

5. Key learning points and next steps  

Neil stressed the importance of staying updated and vigilant when it comes to customs, underlining that regulatory compliance isn’t just about avoiding penalties - it’s about protecting the reputation and viability of your business.  

Your checklist for streamlined customs compliance: 

  • Understand the latest customs valuation guidance from HMRC and adjust internal processes accordingly.  
  • Audit supplier declarations to ensure rules of origin compliance, especially for preferential duty claims.  
  • Regularly review your VAT strategy and written contracts with brokers to confirm PVA applications.  
  • Use technology and expert advice to simplify recordkeeping and prevent costly errors.  
  • Building resilience through awareness  

Customs compliance doesn’t have to hinder your business growth. When approached proactively, it’s an opportunity to streamline operations, reduce risk, and build efficiency. By embedding the insights shared during the Talking Trade event, your business will be better positioned to tackle the complexities of international trade with confidence.  

If you’re unsure where to begin or need tailored guidance, services like Business West’s customs advisory support can help you every step of the way.  

Final Thought: The global trade environment will always evolve, but traders who focus on compliance and stay informed will always be one step ahead. Take the time to review your processes - your future trade success depends on it! 

If you would like any further information or help, please contact our team.