Key Takeaways
- HMRC will publish a customs-specific voluntary disclosure framework by the end of 2026, announced in the June 2026 Tax Update.
- Currently, there is no dedicated customs disclosure route — businesses rely on the C285 form, general tax disclosure, and Notice 301 provisions.
- The new framework aims to reduce administrative burden and encourage timely, unprompted disclosure of customs errors.
- HMRC is simultaneously strengthening the customs civil penalty regime, making voluntary disclosure more important than ever.
- Importers should audit their customs declarations now — errors found and disclosed before HMRC discovers them attract significantly lower penalties.
- Voluntary disclosure prevents HMRC from publishing your details as a deliberate non-complier.
What’s Changing
On 23 June 2026, the UK government published its “Tax Update 2026: Simplification, Modernisation and Fairness” — a wide-ranging set of measures covering everything from low-value import relief to customs modernisation. Buried among the announcements was one that should matter to every UK importer: HMRC will develop and publish a customs-specific voluntary disclosure framework by the end of 2026.
This is not a minor administrative tweak. For the first time, there will be a structured, purpose-built process for businesses to tell HMRC “we got our customs declarations wrong” — without navigating the current patchwork of forms, notices, and general tax disclosure routes that were never designed for customs errors.
According to Baker McKenzie’s analysis of the Tax Update, the framework is “intended to encourage businesses to make unprompted disclosures of errors in a timely manner, while aiming to reduce the administrative burden required.” The ICAEW noted the same commitment in its summary of the announcement.
The timing is not coincidental. In the same update, HMRC signalled it will strengthen the customs civil penalty framework, including a review of maximum penalty amounts with a view to further deterring non-compliance. The message is clear: make it easier to come forward voluntarily, and make it more expensive not to.
The Current Landscape: How Businesses Disclose Customs Errors Today
If you discover a customs error today — a wrong commodity code, an undervaluation, a missed duty relief, an origin mistake — there is no single, obvious route to put it right. Instead, you are navigating a fragmented system that was never designed as a coherent disclosure framework.
The C285 Form
The C285 form is the primary tool for claiming repayment of overpaid import duty and VAT. As of June 2026, HMRC updated its CDS guidance to confirm that even notification and withdrawal requests for post-clearance amendments must be submitted via a C285.
The form works for overpayments, but it is fundamentally a repayment mechanism, not a disclosure tool. If you underpaid duty — the more common and more serious scenario — the C285 does not provide a clear path. You are left to contact HMRC through general channels and hope the process treats you as a voluntary discloser rather than a target.
General Tax Voluntary Disclosure
HMRC’s general voluntary disclosure process, last updated in April 2026, covers income tax, corporation tax, VAT, and other taxes. It is not customs-specific. The guidance talks about tax returns, offshore matters, and the Worldwide Disclosure Facility — none of which map cleanly onto a customs declaration error.
A business using this route for a customs issue is effectively forcing a square peg into a round hole. The process does not account for the unique features of customs compliance: multiple declarations per month, third-party broker involvement, commodity code complexity, and the fact that customs errors often span dozens or hundreds of individual entries.
Customs Notice 301 — Civil Penalties
Notice 301 governs civil penalties for contraventions of customs law. It contains one crucial sentence for anyone considering a disclosure: “You will not receive a penalty if you discover and disclose a contravention voluntarily.”
The current maximum penalties under Notice 301 are £2,500 per contravention for significant irregularities and £1,000 for others, with a cap of £25,000 per site from a single compliance check. For a business with hundreds of declarations, those per-contravention figures can add up fast.
But Notice 301 is a penalty framework, not a disclosure framework. It tells you what happens if you do not disclose — it does not tell you how to disclose.
The Result: Uncertainty
The current system creates a perverse incentive. Businesses that discover errors face a choice: navigate an unclear disclosure process with uncertain outcomes, or stay quiet and hope HMRC does not look too closely. A dedicated framework removes that ambiguity. It says: here is the process, here is what you need to provide, here is what will happen next.
Why a Dedicated Framework Matters
Customs errors are not like tax return errors. A single importer might file hundreds of declarations per year, each with dozens of data fields. Commodity codes run to 10 digits. Valuation rules span six methods. Origin rules change by trade agreement. Even diligent businesses make mistakes.
The most common customs errors include:
- Wrong commodity code — the single biggest source of underpayments and overpayments. A code that is one digit wrong can change the duty rate from 0% to 12%. Our commodity code classification tips explain how to get this right.
- Incorrect valuation — missing additions to the transaction value (royalties, assists, packing costs) or using the wrong valuation method entirely.
- Origin errors — claiming preferential duty rates without meeting the rules of origin requirements.
- Missed duty reliefs — failing to claim available reliefs (inward processing, end-use, temporary admission) and overpaying as a result.
- Procedural failures — missing documentation, late declarations, or incorrect procedure codes on CDS.
A customs-specific framework can address these in ways the general tax disclosure process cannot. It can provide guidance on how to calculate underpaid duty across multiple declarations. It can clarify how far back you need to go (the standard time limit for customs debt notification is three years, but this extends in cases of criminal behaviour). It can set out what supporting evidence HMRC expects.
The administrative burden point is significant. Under the current system, a business correcting 50 declarations might need to submit 50 separate C285 forms, each with its own supporting documentation. A streamlined framework could allow bulk disclosure with summary calculations — saving time for both the business and HMRC.
What the New Framework Is Likely to Include
HMRC has not published detailed proposals yet, but the announcement and the wider context give us a reasonable picture of what to expect.
A Structured Disclosure Process
The framework will almost certainly provide a step-by-step process: how to notify HMRC of the error, what information to provide, how to calculate the duty owed, and what happens after submission. This mirrors the structure of existing HMRC disclosure facilities for other tax heads.
Reduced Penalties for Unprompted Disclosure
The existing penalty framework already rewards voluntary disclosure. Under HMRC’s Compliance Handbook (CH82470), penalties for inaccuracies are reduced based on the quality of disclosure:
| Behaviour | Maximum Penalty | Minimum with Unprompted Disclosure |
|---|---|---|
| Careless | 30% | 0% |
| Deliberate, not concealed | 70% | 20% |
| Deliberate and concealed | 100% | 30% |
The new framework is expected to embed these reductions explicitly into the customs context, making it clear what level of disclosure quality earns what level of reduction.
Protection from Public Naming
HMRC has the power to publish details of those penalised for deliberately failing in their tax obligations. The existing disclosure guidance confirms: “If you come forward voluntarily you’ll earn the maximum reduction of any relevant penalties for the quality of disclosure, and we’ll not publish your details.” The new framework will almost certainly carry this protection forward.
Alignment with the Strengthened Penalty Regime
The Tax Update announced a review of maximum customs civil penalty amounts. The expectation, per Baker McKenzie, is that this will “particularly focus on breaches of approval conditions relating to essential customs infrastructure at border locations.” The new disclosure framework and the strengthened penalties are two sides of the same coin: make disclosure easier, make non-disclosure more expensive.
What UK Importers Should Do Now
The framework is not here yet, but waiting until it is published is a mistake. Here is what you should be doing between now and the end of 2026.
1. Audit Your Customs Declarations
If you have not done a compliance audit in the last 12 months, do one now. Focus on the high-risk areas: commodity codes for your top 20 product lines, valuation methodology, origin claims, and procedure codes. A third-party customs consultant or your broker can help — but remember, the legal responsibility for accuracy sits with the importer, not the broker.
2. Quantify Any Errors Found
If the audit finds errors, calculate the duty impact. How much was underpaid? Over what period? How many declarations are affected? This is the information HMRC will want, and having it ready positions you to disclose as soon as the framework is published.
3. Document Your Internal Controls
HMRC looks favourably on businesses that can demonstrate robust internal controls — even if those controls did not catch every error. Document your customs compliance procedures, your broker instructions, your commodity code review process, and any training your team has received. This evidence supports a “careless” rather than “deliberate” classification if errors are found.
4. Consider Disclosing Now for Material Errors
If your audit finds material underpayments — particularly if they cross the threshold from careless to deliberate — waiting for the new framework may not be the right call. The current process, fragmented as it is, still offers the core benefit: voluntary disclosure before HMRC discovers the error. The penalty reduction for unprompted disclosure applies now, not just when the new framework arrives.
Contact HMRC through the existing channels, make clear you are making a voluntary disclosure, and document everything. If in doubt, engage a customs solicitor or specialist adviser — the cost of professional advice is almost always less than the penalty for getting it wrong.
5. Watch for the Framework Publication
HMRC has committed to publishing the framework by the end of 2026. Monitor gov.uk, the HMRC customs bulletins, and trade body communications (BIFA, CILT, IOE&IT) for the announcement. When it lands, move quickly — the framework is likely to be most favourable to early adopters.
The Bigger Picture: A Customs Compliance Crackdown
The voluntary disclosure framework does not exist in isolation. It is part of a broader HMRC push on customs compliance that includes:
- Strengthened civil penalties — a review of maximum penalty amounts, with a focus on border infrastructure breaches.
- Customs modernisation call for evidence — open until 15 September 2026, seeking views on trade digitisation and the future UK customs model.
- Removal of low-value import relief — the £135 de minimis threshold is being removed by October 2028, bringing millions more consignments into the full customs regime.
- PAS 41201:2026 — the new BSI standard for customs intermediaries, raising the bar for broker competence.
The direction of travel is unmistakable: HMRC expects higher standards of customs compliance, and it is building the tools to enforce them. The voluntary disclosure framework is the carrot — a clear, low-friction path to put things right. The strengthened penalty regime is the stick.
For UK importers, the calculation is straightforward. The cost of a proactive compliance audit and voluntary disclosure is almost certainly lower than the cost of HMRC finding the errors first. And with the new framework on the horizon, there has never been a better time to get your customs house in order.
Frequently Asked Questions
When exactly will the new customs voluntary disclosure framework be published? HMRC has committed to publishing it by the end of 2026. No specific date has been given. The framework was announced as part of the Tax Update 2026 published on 23 June 2026.
What is the current process for disclosing a customs error? There is no single dedicated process. You can use the C285 form for overpayments, contact HMRC directly for underpayments, or use the general tax voluntary disclosure route. Customs Notice 301 confirms that voluntary disclosure of contraventions means no penalty will be applied, but it does not provide a disclosure process.
What happens if I do not disclose a customs error and HMRC finds it? If HMRC discovers the error, you lose the protection of voluntary disclosure. Penalties are higher — up to 100% of the underpaid duty for deliberate and concealed errors. HMRC can also publish your details as a deliberate non-complier. In serious cases, criminal investigation is possible.
How far back can HMRC go for customs errors? The standard time limit for notifying a customs debt is three years from the date the debt was incurred. This extends to longer periods in cases involving criminal behaviour. If you are considering a disclosure, you should review declarations going back at least three years.
Does using a customs broker protect me from liability? No. The legal responsibility for the accuracy of a customs declaration sits with the importer of record, not the broker. Even if your broker made the error, HMRC will pursue you for any underpaid duty. You may have a separate claim against your broker, but that does not reduce your liability to HMRC.
Should I disclose now or wait for the new framework? If you have found material errors — particularly underpayments — disclosing now is generally the safer course. The core benefit of voluntary disclosure (penalty reduction, no public naming) applies under the current system. Waiting risks HMRC discovering the errors first. For minor or technical errors, waiting for the streamlined framework may be reasonable, but document your findings and your decision in either case.