HMRC conduct post clearance customs audits on importers of goods, very often resulting in the issue of demands for significant amounts of underpaid customs duty. In many cases such demands can cover a three year period, and mostly arise from the use of incorrect commodity codes, incorrect claims to preference or underdeclared customs values, as well as from breaches of the conditions for specific duty reliefs.
The concept that a customs audit is “routine” or “random” is a myth. HMRC examine the data declared on customs entries and select companies for audit where the data shows a likelihood that customs duty may have been underpaid.
Recent information obtained by Menzies from HMRC through Freedom of Information requests has highlighted some interesting figures.
During the year to 31 March 2026, HMRC issued 17,286 C18 post clearance demand notices to importers. These had a total value of £418,209,074 in underpaid customs duty. That’s around 8% of the total customs duty collected by HMRC throughout the same period.
Of the 17,286 demands issued, only 4% were challenged through the reviews and appeals process -the other 96% were simply accepted and paid, possibly because many importers don’t feel confident in challenging decisions made by a government organisation.
So, what happened with the 700 demands that were submitted for review?
- 52% were upheld by the review team, however 21% of these sought further redress to the First Tier Tribunal (sorry no information as to how they fared, but some of these will still be live cases).
- 4.5% were reduced
- 11.5% were cancelled
- 7% were rejected as not meeting the requirements for review (eg submitted out of time)
- 25% were resolved or withdrawn before the review.
This indicates that HMRC’s accuracy rate on issuing post clearance demands is only just over half, yet only 4% of all demands are challenged. The figures above show that 16% of challenges were successful, at least in part, and a further 7% missed out on a likely technicality – probably through a lack of experience in dealing with HMRC disputes.
Can a customs audit be avoided?
Customs audits are driven by data. The data used by HMRC in selecting targets for audit is available to every UK importer, and provides a useful insight into an importer’s customs compliance. Proactive analysis of import data can help to identify any anomalies or errors and importantly, provide an opportunity for corrective action long before HMRC even look at the data.
What’s the key message?
The key message to importers is that HMRC don’t always get it right when they issue duty demands. Anybody receiving a C18 post clearance demand for payment is encouraged to consider seeking professional advice as to the chances of a successful appeal. At Menzies, our customs team has a strong record of success in securing cancellation of adverse decisions, reductions in duty demands and resolution of disputes, often before they reach the review stage. Timeframes are important – we need some time to understand the facts of the case, so we would welcome a discussion as soon as possible with anybody in receipt of a C18 post clearance demand.
If you would like to know more about dealing with a duty demand, or about how we can analyse your customs import data, please get in touch.
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