Roger Williams

The United Kingdom Warehousing Association (UKWA) is in discussion with Her Majesty's Revenue & Customs (HMRC) to clarify HMRC's policy on Customs Warehousing status.

UKWA, whose members operate over a million square feet of warehousing space in the UK, is concerned that HMRC is aggressively targeting bonded warehouse operators and revoking the authorisation to store duty-suspended goods where operators have been found not to have held goods under bond for a relatively short period of time.

Such a policy could have serious commercial implications for some of its member companies, UKWA contends.

"It seems, from feedback we have had from our members, that HMRC is now applying a 'use it or lose it' policy to storage facilities that have been granted Customs or Bonded Warehouse status," says Roger Williams, CEO of UKWA.

"In one particular instance, a UKWA member company received a letter from HMRC threatening to revoke its authorisation as a Customs Warehouse and, despite producing evidence of future potential contracts, is having great difficulty persuading HMRC that it should be allowed to maintain its customs warehouse authorisation," Williams explains.

The UKWA, acting on behalf of its members, is asking if it is now HMRC policy to adopt a more aggressive and rigid approach to bonded warehousing status.

"Given that such a policy is unlikely to raise revenue for the Exchequer but would limit a company's operational flexibility, it is hard to understand the motivation for such an approach," Williams says.

Customs or bonded warehousing allows traders who import goods to delay paying duty and/or import VAT. Duty is not payable when the goods remain in the warehouse and it only becomes payable when the goods are released.

Third-party storage companies with bonded warehouse status have significant commercial advantage, "the ability to defer payment of duty is an attractive option to importers". The loss of bonded accreditation could, therefore, have a significant commercial impact on many businesses in the storage industry.

"Furthermore, before a company is granted customs warehousing status by HMRC, it has to make a significant investment in processes, procedures, systems and staff training. It would be very harsh if this investment were to be wasted because HMRC has decided to adopt a new stance," Williams says.

He says the UKWA accepts that it is right that companies are regularly checked to ensure that they have processes and procedures in place to store goods under bond in the correct and legal way. "But we do not expect HMRC to add unnecessary extra burdens to businesses in what are already extremely tough trading conditions.

"We hope HMRC will clarify its exact position so that those UKWA members that have customs status can take any steps needed to ensure that they retain it."

Established in 1944, the UKWA, with over 600 member companies, controls nearly 100 million sqft. (9.3 million sqm) of warehousing space from nearly 1,300 locations in the UK.