Guide
How UK customs works after EU exit: import duty, the 2018 Act, and the 2018 Regulations
A strategic explainer of the post-Brexit customs framework for goods imported into Great Britain. Walks the architecture of the Taxation (Cross-border Trade) Act 2018 and its family of "(EU Exit)" Regulations. Names the three concurrent border liabilities — customs duty, import VAT, and excise — and flags that Northern Ireland operates a separate regime under the Windsor Framework.
When the UK left the EU customs union at the end of the implementation period on 31 December 2020, every commercial movement of goods between Great Britain and the EU became a customs movement for the first time in nearly 50 years. The legal architecture that now governs those movements was put in place during 2018–2020 and is built around one Act and a tightly bound family of statutory instruments. Understanding the shape of that architecture is the foundation for everything else you do as an importer.
This guide is for business owners and finance directors who need a strategic picture of the regime, not the line-by-line mechanics of a Customs Declaration Service entry. It explains what the law charges, who is liable, which instrument does which job, and why every customs SI on the statute book carries the suffix "(EU Exit)".
The Act and the Regulations: powers versus operations
The substantive customs regime sits in Part 1 of the Taxation (Cross-border Trade) Act 2018 (sections 1 to 37). Part 1 does three things. It charges import duty on chargeable goods (section 1). It defines what counts as chargeable goods, sets the amount by reference to the customs tariff in force, and identifies the person liable to pay (sections 2 to 8). And it confers on HMRC the wide regulation-making powers (sections 32 to 37) used to flesh the regime out in detail.
The Act is deliberately thin on operational detail. The day-to-day rules — how a declaration is lodged, how goods are valued, when a customs debt arises — sit in the secondary legislation made under those powers. The lead operational instrument is the Customs (Import Duty) (EU Exit) Regulations 2018 (SI 2018/1248). It runs to several hundred regulations across more than a dozen Parts and is the day-to-day rulebook every importer and customs intermediary works from.
Three concurrent border liabilities
One of the most common misconceptions among first-time importers is that "paying customs" is a single transaction. It is not. When commercial goods cross the GB frontier, up to three separate fiscal liabilities can arise on the same shipment, governed by three different statutory regimes:
- Customs duty — charged under section 1 TCTA 2018. The rate is set by the UK Global Tariff (the Customs Tariff (Establishment) (EU Exit) Regulations 2020, SI 2020/1430) and may be reduced or eliminated by a preferential rate under a free trade agreement.
- Import VAT — charged under the Value Added Tax Act 1994. VAT-registered businesses can account for it on their VAT return through Postponed VAT Accounting rather than paying it at the border.
- Excise duty — charged where the goods are alcohol, tobacco, or hydrocarbon fuels under the Alcoholic Liquor Duties Act 1979 and Tobacco Products Duty Act 1979. Excise is a separate regime that travels in parallel with customs.
Each liability has its own assessment, its own deferment options, and its own appeals route. A guide that talks only about "duty" is talking about one of the three.
Who is liable
Customs liability does not rest only on the named consignee. It rests on the declarant — the person on whose behalf the customs declaration is lodged — and, where a customs intermediary is appointed under indirect representation, on the intermediary as well. Joint and several liability under indirect representation is the single most often missed rule in the regime, and it has caught both importers and the agents who serve them.
Why every SI carries "(EU Exit)"
The naming convention is not cosmetic. Until IP completion day on 31 December 2020 the UK applied the Union Customs Code (Regulation (EU) 952/2013) and its delegated and implementing Regulations directly. At IP completion day, retained EU law took over: the UCC was preserved as part of UK law and then immediately modified to make it operable in a UK-only context. The "(EU Exit)" Regulations are the instruments that perform that re-statement and modification.
In practice this means SI 2018/1248 reads like the UCC rewritten in domestic statutory drafting style. Concepts you may have encountered in the UCC — chargeable goods, customs procedures, customs debt, declarants, transaction value — survive intact. The procedures, declaration types, and underlying logic are recognisable. What has changed is the legal source, the regulator (HMRC alone, no longer co-administered with EU institutions), and the geographic scope.
The family of customs SIs
SI 2018/1248 does not stand alone. The operational regime is split across a family of sister instruments, each handling a discrete part of the picture:
- SI 2018/1249 — Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018. Covers the duty-suspension procedures: customs warehousing, inward processing, temporary admission, authorised use, and outward processing.
- SI 2018/1258 — Customs Transit Procedures (EU Exit) Regulations 2018. Implements the Common Transit Convention for goods moved under duty suspension between customs offices, including the heavy GB–EU roll-on/roll-off corridor.
- SI 2020/1430 — Customs Tariff (Establishment) (EU Exit) Regulations 2020. Establishes the UK Global Tariff, the default non-preferential schedule.
- SI 2020/1457 — Customs (Origin of Chargeable Goods) (EU Exit) Regulations 2020. Sets the non-preferential origin rules used to determine country of origin for trade-defence and statistical purposes.
- SI 2020/1605 — Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020. The catalogue of reliefs (returned goods relief, transfer of residence relief, end-use relief and so on).
If you read a customs SI in isolation you will encounter cross-references you cannot resolve. The instruments are designed to be read together, with TCTA 2018 sitting above them as the enabling Act.
The pre-Brexit machinery that survives
Not everything is new. The Customs and Excise Management Act 1979 still does heavy lifting, particularly on enforcement. Its offence machinery — improper importation, untrue declarations, fraudulent evasion of duty — survives EU exit and underpins the criminal side of customs enforcement. Border Force seizure powers, condemnation proceedings, and many of the procedural provisions used at the frontier all flow from CEMA 1979 read with Part 1 TCTA 2018.
What the regime asks of you
From a strategic perspective the regime imposes three continuing obligations rather than a single transactional one. You must register as a trader (the GB EORI), you must declare every chargeable movement on the Customs Declaration Service, and you must keep records for four years to support post-clearance audit. Customs compliance is not paid and forgotten on the day the goods land — it is a continuing obligation that HMRC can examine years afterwards.
How this affects your business
For a first-time importer, the practical implications of the architecture are these. You are dealing with at least three statutory regimes in parallel (customs, VAT, and possibly excise), so your finance and operations functions need to coordinate. Your liability under indirect representation may extend to your customs agent, and that needs to be a conscious commercial choice rather than the default that happens because the freight forwarder filled in a form. Your record-keeping window is four years, which is longer than many businesses keep operational paperwork by default, so the retention policy needs to be deliberate. And your declarations are submitted on a digital service (CDS) that demands data you may not currently capture in your purchasing systems — most notably the 10-digit commodity code, the customs procedure code, and the valuation method.
The architecture rewards businesses that treat customs as a function rather than a task. Once you have an EORI, an intermediary relationship, a deferment account or PVA election, a record-keeping system, and an internal owner for classification and valuation, the regime becomes manageable. Without any of those, every shipment is a fire drill.
Civil and criminal penalties for customs contraventions
<ul>
<li><strong>£1,000</strong> for less serious contraventions, such as a minor declaration error.</li>
<li><strong>£2,500</strong> for more serious contraventions, such as failure to keep required records.</li>
</ul>
<p>Penalties stack per contravention. A reasonable excuse defence is available, and unprompted voluntary disclosure substantially mitigates exposure.</p>
<p><strong>Criminal offences</strong> under the Customs and Excise Management Act 1979 sit alongside the civil regime: section 50 (improper importation), section 167 (untrue declarations), and section 170 (fraudulent evasion of duty). Maximum penalty on indictment is seven years' imprisonment.</p>
How this connects to other obligations
This explainer sits at the head of the customs content estate. The natural next steps depend on where you are in the lifecycle. If you have not yet imported, the pre-import compliance checklist confirms readiness. If you are about to lodge your first declaration, the CDS declaration task guide walks the data fields. If you are already importing and want to verify your valuation is correct, the customs valuation reference covers the six WTO methods in hierarchical order. If you have discovered a historic error, the voluntary disclosure guide explains how to amend without (or with reduced) penalty exposure.
For the wider fiscal picture, import VAT is covered in the VAT content estate and excise in the excise duty content estate. For the Northern Ireland regime, follow the geographic callout above.
Look up duty and VAT on the UK Trade Tariff
Notice 252: valuation of imported goods for customs purposes, VAT and trade statistics