Understandably, many businesses worry about underpaying customs duty because of the sudden shock to company finances at having to pay it in one go and the possible penalties that HMRC may apply.
But, for several reasons, duty is also often overpaid and the process to reclaim it is quite straightforward. Both import duty and VAT will be reimbursed if you have the correct documentation.
There are two ways to make the claim, through the CDS system or manually, with a C285 form.
There is a time frame for this, however:
- Three years for overpayments
- One year for rejected imports
- 90 days for withdrawal of an import declaration
When making an overpayment claim, make sure you have all necessary documents and files ready to upload before you start.
To apply online, you’ll also need to either:
- Sign in with the Government Gateway user ID and password that you use to subscribe to the Customs Declaration Service — this ID will be linked to your EORI number
- Use your email address to get a confirmation code that you can use to sign in
You’ll also need:
- A commercial invoice that shows the value of imported goods
- The amount that should have been paid to HMRC
- A copy of the Movement Reference Number (MRN)
It can also be helpful to include the packing list and transport documents – an air waybill or bill of lading – in the claim, although these are optional.
Please note that it is very likely that HMRC will reimburse your duty deferment account, if you have one, or use any reimbursement to offset future payments, rather than return funds to a corporate bank account.