The India Deal Cut Your Duty to Zero. Are You Actually Claiming It?

Since 15 July, clothing and textiles coming in from India have qualified for zero duty into the UK. A lot of importers started claiming it right away. Others are still paying up to 12% on the very same goods, and nothing on the invoice would ever tell them so. 

Over a full year of shipments that adds up fast. On a reasonable apparel or home textiles programme you can be into six figures without much effort, and on the larger accounts we see it runs into seven. Most of that is usually recoverable too. The problem is that very few businesses have a reliable way of knowing whether they are missing it in the first place. 

Why importers miss it

Most of the time the reason is fairly ordinary. It often comes down to the data: the preference was there and the goods qualified, but it never got keyed against the entry, so nobody ever claimed it. In other cases the broker or agent running your declarations did not apply it, and because you rarely see the clearance yourself, that gap can sit there for years. And plenty of importers have never known a preference existed on a particular line, which is fair enough when staying on top of which agreement covers which commodity code, and from when, is close to a full-time job that nobody owns. 

India shows how fast this can change. In January, Indian clothing and textiles lost their preferential access under the Developing Countries Trading Scheme and jumped to the full UK Global Tariff, as much as 12% on clothing. Six months later the new UK-India agreement brought the same goods back down to zero. That is a single product line moving twice in half a year, before you even multiply it across every country you buy from and every code you import under. Trying to keep track of all that by hand is where things start to slip. 

Eighteen months to get the data, a minute to read it

Doing this by hand is a slog. You are pulling years of declaration data together, stitching month after month into one place, and building pivot tables to test each entry against the preference that should have applied. It takes forever, mistakes creep in, and the rates have often moved again before you have finished. 

Often the harder part is getting hold of the data in the first place. With one clothing importer, it took me eighteen months to persuade the business to release their CDS data. Once they handed it over, it took a minute or two in CAT360 to see that they had missed £5.1 million of preference. 

What Cat360 is doing here

CAT360 takes your declaration data and reads it against every live trade agreement, line by line. For each entry it works out whether a preference was available, whether there was a better rate than the one you used, and whether the claim would hold up against the rule of origin for that product. If Indian preference has been missed, it shows you where. If a stronger rate is sitting under a different agreement, it points you straight to it. 

You still have to meet the rule of origin. The goods have to qualify, and you need to be able to prove it, whether through a statement on origin from your supplier, a certificate, or importer's knowledge you can stand behind. What you lose is the guesswork. Rather than hoping your duty position is right, you can see it and back it up if HMRC comes asking. 

Worth a look this month

While the India change is still fresh, it is worth putting a couple of questions to your team. Do you know, entry by entry, whether you are on the best rate available to you? And would you even know if your agent had missed a preference on your behalf? If you are not confident either way, working out what that has cost you since January is usually an eye-opener. 

If you would like to see where you stand across every agreement you could be using, including anywhere Indian preference has slipped through, we can show you what CAT360 finds in your own declaration data.