With many businesses experiencing a fall in sales, emphasis is being placed on efficiency drives and cost-cutting exercises in preparation for the post-recession recovery.

We understand that finance executives have a balanced scorecard including:

• Cutting costs
  
• Improving competitiveness
  
• Improving cash-flow
  
• Minimising risk

You are constantly looking to identify and implement projects to deliver against these objectives. Common tactics include reviewing supplier arrangements, refinancing with the banks, working on effective tax structures and hedging currency movements to name a few examples.

Customs planning is another tactic which can be used to deliver the above goals. In fact, there are two clear reasons for looking in to this area again, namely:

• Customs cost savings are often easier to realise than savings in other areas because they are looked at less frequently and can often be implemented with minimal co-operation from other parties;
  
• Changes in reviewing supplier arrangements, working on tax strategies, hedging etc are likely to have wider customs implications, some positive, some negative.

We have outlined below five key methods to immediately cut customs costs and inject cash into your business and highlighted some common business tactics which will give rise to customs issues.

What is a "Binding Tariff Information?"

A BTI is a ruling issued to an importer who wants to gain certainty on a classification matter.

Each BTI will bear the commodity code for the product in question and the start date for the validity of the information. It will carry a unique reference number and will show the name and address of the BTI holder. It will show an explicit description of the goods to which it relates and will show the basis of the legal justification for the decision.

BTI is an important tool as there are over 16,000 different commodity codes for goods to be classified under when imported from outside the European Union (EU). Many of these codes have very thin dividing lines. BTI are used for:

•  Purposes of determining import/export duties
  
•  Calculating export refunds
  
•  Calculating amounts granted for imports/exports within the Common Agricultural Policy (CAP)
  
•  Using import, export or advance fixing certificates for the acceptance of the customs declarations

Why are you importing goods when this involves taking on additional risks?

You are most likely driven by a desire to reduce costs and so improve both you margins and competitiveness. However, you may be leaving money on the table if you do not look at the options open to you to reduce your customs duty costs.

Outlined below are seven classic ways to reduce your customs duty costs which are accepted by HMRC.  Many of these ideas can be applied retrospectively going back up to three years giving you an opportunity to recover lost profits.

There are developments taking place in the US to kill off one of the classic customs planning arrangements that allows you to strips any intermediaries' profits out of a charge to duty. If successful, there is a risk of this approach spreading to other countries and impacting your landed costs.