Due diligence when instructing a customs agent — what the importer is still liable for

One of the most common mistakes made by Polish importers and exporters operating in the UK market is the false assumption that instructing a customs agent (customs agency) relieves them of all liability. In practice, the opposite is true. The importer of record — the entity that formally brings goods into the United Kingdom — remains responsible for the accuracy of the customs data even when the entire operational handling has been delegated to an external customs agency. HMRC may pursue outstanding customs debt, penalties and interest directly from the importer, regardless of any agreement with the agent. That is why it is so important to carry out thorough due diligence both before selecting an agent and throughout the working relationship. This article explains exactly what importer liability means, how direct representation differs from indirect representation, what information you must provide to your agent for clearance to proceed smoothly and in compliance with the rules, and how to verify the competence and authorisation of a customs agency operating in the UK.

Direct vs. indirect representation — who is liable for the customs debt

The fundamental question when instructing clearance is the type of representation. Under the UK Customs (Customs Procedures and Customs Formalities) Regulations, a customs agency may act on your behalf in two ways:

Type of representation	Who submits the declaration?	Who is liable for the customs debt?
Direct	Agent — in the name of the importer	Importer (principal)
Indirect	Agent — in their own name	Agent and importer jointly and severally

Under direct representation the agent acts solely as your authorised representative — all legal consequences of the declaration (including any customs debt and penalties for irregularities) fall on you as the principal. Under indirect representation the agent is jointly and severally liable with the importer, but HMRC is entitled to pursue either party. Important rule: even where the agent bears joint and several liability, HMRC is not required to approach the agent first — it may issue a demand directly to the importer.

Source: gov.uk — Customs agents: direct and indirect representation

What a customs agency guarantees — and what it does not

A good customs agency is responsible for: - Correct submission of the customs declaration in the CDS (Customs Declaration Service) on the basis of data provided by the importer - Knowledge of procedures — selecting the correct customs procedure code, correctly applying reliefs and suspensions - Timeliness — submitting the declaration within the required time window - Formal completeness — verifying whether documents (commercial invoice, packing list, B/L or AWB) are required

A customs agency is not responsible for: - The accuracy of the customs value — as the importer, you know the actual transaction price - The correctness of the HS/CN classification — the agent may advise, but ultimate liability rests with the importer - The declaration of country of origin — if you provide an incorrect origin, the consequences (penalty, retroactive duty) fall on you - Undisclosed circumstances — if you conceal information about special transaction conditions (e.g. royalties or licence fees included in the price), the declaration will be incorrect through your fault

What information you must provide to your agent

A smooth and correct clearance requires complete data from the importer. Below is a list of documents and information you should prepare before contacting a customs agency:

Document / information	Why it matters
Commercial invoice	Basis for determining the customs value
Packing list	Verification of quantities and weight
B/L or AWB	Confirmation of transport
EORI number (UK or EU)	Required for submitting the declaration
HS/CN code of the goods	Tariff classification
Country of origin + proof (e.g. EUR.1, statement on origin)	Application of TCA tariff preferences
Description of goods in English	Required in the CDS declaration
Incoterms	Effect on customs value (CIF vs FOB)
Transaction value and currency	Basis for duty calculation
Import licence number (if applicable)	For controlled goods

The absence of any of the above may cause a delay in clearance or result in an incorrect declaration. A customs agency can only act on the data you provide.

How to verify the competence of a customs agency in the UK

Not every company offering customs services in the UK operates legally and competently. Before instructing clearance, check the following:

1. HMRC authorisation (Authorised Agent) HMRC does not maintain a public register of customs agents, but you can ask the agent for the EORI number under which they submit declarations — and verify that the EORI is active.

2. AEO status (Authorised Economic Operator) AEO is a UK/EU certificate for entities meeting the highest customs compliance standards. An agency holding AEO-C (customs simplifications) or AEO-S (security and safety) certification is a quality indicator. The list of AEO holders can be checked in the HMRC database.

3. Professional indemnity insurance A professional customs agency should hold a Professional Indemnity Insurance policy. Ask about the scope — it should cover errors in customs declarations.

4. Membership of trade bodies - BIFA (British International Freight Association) - FCSA (Freight, Customs and Shipping Agents) - CIOT (Chartered Institute of Taxation) — for agents with tax adviser qualifications

5. References and experience in your sector A customs agency specialising in electronics will not necessarily be familiar with the nuances of classifying textiles or chemicals. Ask about experience in your product category.

What to check in the agreement with your customs agent

The agreement with a customs agency (Customs Agent Agreement or Service Agreement) is a key document that should clearly set out:

• Type of representation — does the agent act in your name (direct) or in their own name (indirect)?
• Scope of the agent's liability — what the agent is responsible for, and what they are not
• Importer's information obligations — what data you must provide and by when
• Indemnity clause — can the agent seek to recover from you the costs of any penalty imposed due to incorrect data you supplied?
• SLA and response time — how quickly the agent will submit the declaration after receiving the documents
• Fees and charges — does the price include amendments to declarations, or are these charged separately?

The absence of a written agreement, or signing one without reading it — particularly where it contains unfavourable clauses — represents a genuine financial risk.

When HMRC may pursue the importer despite an agent's error

HMRC is entitled to issue a tax demand (C18 Post Clearance Demand Note) directly to the importer in the following circumstances:

1. Incorrect customs value — even if the agent submitted the declaration on your instruction, HMRC may determine a higher customs value and pursue the difference in duty plus interest from you
2. Incorrect HS classification — if the goods should have been classified under a different code with a higher duty rate
3. Incorrect origin — if preferential origin (e.g. EU) was declared but the goods originate from a third country
4. Post-clearance audit — HMRC has 3 years to verify declarations; upon discovering irregularities it issues a C18 with interest

In practice this means that even several years after clearance you may receive a demand for outstanding duty and VAT. The amounts can be significant — particularly where goods attract high duty rates.

Practical tips for importers

Retain documentation for at least 4 years — HMRC has the right to verify declarations for 3 years, and the loss of documents will make it harder to defend yourself in the event of an audit.

Verify HS codes yourself — do not rely on the HS code provided by your supplier. Use the UK Trade Tariff (trade-tariff.service.gov.uk) or apply to HMRC for a Binding Tariff Information (BTI) ruling.

Check every import declaration — your agent should provide you with a copy (Entry Acceptance Number or MUCR). Keep these documents alongside your invoices.

Communicate changes to the transaction — if the value, quantity, delivery terms or country of dispatch change, inform your agent before the declaration is submitted, not after.