Procedure 42 (Regime 42) allows goods to be imported from a third country into one EU member state without paying VAT there, provided the goods are moved straight on to a recipient registered for VAT-EU in another member state. VAT is then accounted for by the buyer in the destination country as part of an intra-Community acquisition of goods.
Contents
In brief — what you'll learn
- ✓ How to prepare the process and documents
- ✓ How the declaration and inspection work
- ✓ How to maintain compliance and settlements
How to prepare the process and documents
The scope of responsibility of the parties
The minimum data set for the declaration
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How the declaration and inspection work
Running the declaration smoothly requires agreeing the schedule with the carrier in advance and confirming that all documents are ready before the vehicle is presented. It's essential to distinguish responsibility between the parties to the transaction, since this determines the scope of data submitted to the official systems.
The operational stages from notification to release
The operational process from notification to the release of the goods consists of several key stages: submitting the pre-lodgement to the CDS system, obtaining an MRN (Movement Reference Number), physically presenting the goods for clearance, document verification by customs, and release or being held for inspection. Each of these steps should be documented, keeping copies of system confirmations and correspondence with the authorities. The waiting time for release depends on the type of inspection and the risk category assigned to the shipment by the automated risk-management system.
The most common risk points and how to reduce them
The most common operational delays arise when the commercial documents don't match the transport data, so it's worth introducing a completeness check before the vehicle is even presented. The key risk points are: a customs value that doesn't match the invoice, an incorrect tariff code, a missing or invalid EORI number for the counterparty, and inconsistent classification of the goods between the transport document and the declaration. An effective way to reduce this risk is an internal checklist completed before every notification.
How to maintain compliance and settlements
Archiving, amendments and evidence of due diligence
Under HMRC's requirements, customs documents must be kept for at least 4 years from the date of clearance. This archive should include: customs declarations along with system confirmations, commercial invoices and transport documents, correspondence with customs, and any amendments submitted after the original declaration. Evidence of due diligence — i.e. documentation confirming that the company checked its counterparties' details and the classification of the goods — is essential during an official inspection and can protect against sanctions if irregularities are found.
Working with a customs agency and internal audit
Regular work with a customs agency makes it possible to keep internal procedures up to date with changing HMRC and GOV.UK rules. An internal audit carried out every quarter should check: the correctness of the tariff codes used, whether counterparties' EORI numbers are up to date, whether the customs value is consistent with transfer pricing policy, and whether the documentation archive is complete. It's worth recording the audit results as a report, which serves as evidence of due diligence in the event of an external inspection.
Summary
In summary: in the area of 'Regime 42 - explained', what matters most is running the process according to current official guidance, with a clear split of responsibility and documentation of every decision. This approach reduces delays, cuts down on corrections, and makes it easier to defend your settlements during an inspection. If any requirement is unclear, check the current GOV.UK guidance or consult an accredited customs agency experienced in handling trade between the United Kingdom and the European Union.
Legal basis and sources
- HMRC: UK Trade Tariff (UI)
- HMRC: Check a UK EORI Number API
- GOV.UK: Making an entry summary declaration
If the rules or system notices are updated, check the current GOV.UK or KAS guidance before submitting a declaration.
Frequently asked questions
What is Regime 42 and when does it apply?
Regime 42 is a customs procedure that allows goods imported into the EU to be exempted from VAT in the member state of entry, when the final destination is another EU member state. It's used when the importer holds a valid VAT number in the destination country and meets the intra-Community reporting requirements. In the context of trade with the United Kingdom, this procedure has taken on particular importance since Brexit, when goods enter the EU via an external border.
What documents are needed to correctly submit a declaration under Regime 42?
To submit a declaration under Regime 42 you need: a commercial invoice showing the customs value, a transport document (CMR or bill of lading), the importer's and exporter's EORI numbers, the CN tariff code (8 digits), a certificate of origin for the goods (if required), and the importer's VAT number in the destination country. Missing any of these can result in the shipment being held or customs refusing to release the goods.
Who is responsible for errors in a customs declaration?
As a rule, responsibility for errors in a customs declaration lies with the importer or their customs representative acting under authorisation. The scope of responsibility depends on the type of representation — direct or indirect — set out in the agreement with the customs agency. Under indirect representation, the customs agency is jointly liable with the importer for the accuracy of the data in the declaration.
How long should customs documents relating to Regime 42 be kept?
Under HMRC's requirements, customs documents must be kept for at least 4 years from the date of clearance. This applies to customs declarations, commercial invoices, transport documents, and all correspondence with customs. In the event of an inspection or a dispute with the customs authority, complete documentation is key evidence of the importer's due diligence.
What should you do if an error in the tariff code or customs value is discovered after the declaration has been submitted?
Once an error in a submitted declaration is discovered, you should promptly submit an amendment through the CDS system, quoting the MRN of the original declaration and describing the scope of the changes. HMRC requires amendments to be submitted before a customs decision is issued or before statutory deadlines expire. Reporting the error yourself before an official inspection is treated as evidence of good faith and can reduce the level of any sanctions.
Related guides
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