UK customs terms
What is duty under management?
Most businesses can tell you what they paid in duty last year. Far fewer can tell you the total value of duty they are responsible for, which is a different and larger number. Duty under management is that number, and it is the one that tells you whether customs is material to your business.
The definition.
Duty under management is the cumulative value of customs duty a business is responsible for over the three-year audit window: duty actually paid, plus duty saved or mitigated through free trade agreements, special procedures and other reliefs.
Shortened to DUM. The important part is the second half. Duty you legitimately avoided paying still passed through your customs process, still depended on a claim being correct, and is still capable of being demanded back if it was not.
That is why it is a management measure rather than an accounting one. Duty paid appears in your accounts. Duty saved does not, which is precisely why it goes unmanaged: nobody owns a number that never appears on a ledger. A preference claimed in error costs exactly as much as duty underpaid, and it is found the same way, by looking at the declaration afterwards.
A worked example.
A mid-sized importer over a three-year window. The duty paid line is the only one that appears in the accounts.
| Component | Value |
|---|---|
| Period | 36 months |
| Duty paid | £1,000,000 |
| Duty saved through FTA claims | £4,000,000 |
| Duty saved through special procedures | £5,000,000 |
| Total duty under management | £10,000,000 |
The finance director in this business sees £1m of duty over three years, about £333,000 a year, and reasonably concludes that customs is a small cost line. The figure they are actually responsible for is £10m, ten times larger, and £9m of it rests on preference and procedure claims being correct. Every one of those claims was made on a declaration that can be checked afterwards.
Why the number matters.
Two reasons, and they land with different people.
It sets the materiality of your customs exposure
Finance teams size risk by the value at stake. Presented as duty paid, customs looks like a modest cost line and gets the attention a modest cost line deserves. Presented as duty under management, it often turns out to be one of the larger uninsured exposures in the business, and the conversation about resourcing it changes accordingly.
It demonstrates that duty is actively governed
Knowing your DUM, and being able to show how you arrived at it, is evidence that duty is managed rather than passively incurred. That distinction matters in an HMRC audit, where the question is not only whether an entry was right but whether the business has a process capable of knowing.
How to work out yours.
Everything you need is in your own declaration data, which HMRC gives you for free.
Pull three years of CDS reports
Request them from HMRC's Get customs data service, the one that replaced the paid MSS reports. Each request covers up to 31 consecutive days and you can go back four years, so three years of cover is thirty-six requests per report type. Our step-by-step guide walks through it, including how to authorise someone else to pull them for you.
Total the duty actually paid
From the tax lines report. This is the straightforward half and the only part most businesses already know.
Value what you did not pay
For every line where a preference was claimed, work out the third-country rate that would otherwise have applied and take the difference. Do the same for special procedures and any other relief. This is the half that takes the work, because it means holding the tariff as it stood on each declaration date rather than as it stands today.
Add them together, and keep the workings
The total is your duty under management. Keep the calculation, because the number on its own is less useful than being able to show how you got to it.
Step three is where a manual exercise usually stalls, and it is the reason we built the calculation into CAT360 rather than leaving it as a spreadsheet job. If you want to see the scope of doing it yourself, we have written that up honestly in customs data in Excel or Power BI.
Four ways the number comes out wrong.
Counting only duty paid. The most common error, and it understates the figure by whatever proportion of your trade moves under preference or a special procedure. For businesses with strong FTA coverage that can be most of it.
Using twelve months instead of thirty-six. The three-year window is not arbitrary. It matches the period HMRC can look back over, so it is the window in which an error is still capable of costing you money.
Forgetting special procedures. Inward processing, customs warehousing, temporary admission and end use all suspend or relieve duty. That relief is duty under your management, and it depends on conditions being met and evidenced.
Valuing savings at today's tariff rate. A preference claimed in 2024 has to be valued against the third-country rate that applied in 2024. Using the current rate produces a number that is confidently wrong.
Questions
Is duty under management an official HMRC term?
No. HMRC has no such measure, and you will not find it in the Trade Tariff or in guidance. It is a management measure used in customs consultancy, and we use it because the alternative, quoting duty paid alone, consistently understates what a business is responsible for.
Why three years rather than one?
Because it matches the audit window. An error inside that period is still capable of producing a demand or a repayment, so it is still live. Outside it, the number is history.
How is it different from customs value?
Customs value is the value of the goods, which is the basis duty is calculated on. Duty under management is the duty itself, both paid and relieved. A business can have a very large customs value and a small DUM if most of what it imports is duty free.
Does a high DUM mean we are doing something wrong?
No. A high figure usually means the opposite: that you are claiming the preferences and procedures available to you. What it does mean is that a larger amount rests on those claims being correct, which is an argument for checking them rather than for claiming less.
Can CAT360 calculate this for us?
Yes. It is one of the standard measures in the platform, worked out from your own declaration data across the audit window, with the duty saved element valued against the tariff that applied at the time rather than today's. The 14-day trial runs on your own reports, no card required.
We use several brokers. Does that change the calculation?
Not the method, but it does change how hard it is to gather. Your CDS reports cover every declaration made under your EORI regardless of who filed it, which is the point: the number is yours, not any one broker's.
Find out what yours is.
CAT360 works your duty under management out from your own declarations, across the full audit window, and shows you which of the claims behind it do not hold up. 14 days on your own data, no card required.