January and February has been a strange couple of months. Business confidence appears to returning but at a much slower rate than anticipated and hoped for. There have been a plethora of tax changes (not least the return of VAT to 17.5% from 15%) that businesses have had to take on board but the predominant impression so far is that businesses are still very cautious about expenditure and financial directors are seemingly unwilling to spend unless there is an immediate visible return on investment and addition to the "bottom line".

On the whole this is a sensible policy in terms of certain discretionary expenditure as conserving cash reserves is critical for survival it does come with an element of risk.

However, businesses and financial directors need to recognise that HMRC is becoming more assertive and tactically aggressive. Those businesses that are not complying with their customs obligations are at a very real risk of penalties and civil actions. The replacement of "prevention rather than cure" by "it's just a scratch, it'll be fine" coupled with the EC-Customs raising of the bar and a more assertive HMRC will see more and more businesses fall foul of penalties and civil actions.

This article may appear negative in its tone but trust us it isn't! Its aim is to make businesses aware of the early trends that we have noticed developing in the first quarter of 2010. HMRC customs audit teams will not have as much sympathy as you may think if you are found to be in breach of your customs obligations. They will simply turn round and say that everyone is in the same boat regarding the recession but non-compliance is quite simply that: non-compliance.