Case Study – Classification and Suspensions Review for Jaguar Land Rover Ltd

Background

Customs Connect continue to work with Jaguar Land Rover (JLR) on a Classification and Suspensions project. The project commenced in late 2009 with the intention of mitigating the cost of import customs duty payments on non-EU components for both legacy and future purchasing projects.

JLR has experienced a rate of global volume growth, making the import of new components an increasingly complex process. The management of tariff classification was identified as an area of concern by JLR in terms of compliance as well as calculating the landed costs of imported components.

Customs Connect undertake this work on a contingent, success-based pricing structure. This means that no fees are applicable to our client if we are unable to deliver savings to them. This offers the benefit of minimised risk to JLR.

Our Solution

We work in close collaboration with JLR to identify areas of concern. It was believed that import customs duty was being overpaid on a small number of high-value, high-duty spend components. If these components could be reclassified (backed by Binding Tariff Information rulings from HMRC), it would be possible to expedite duty reclaims through HMRC and return cash to JLR.

In addition to the reclassification work, our experts continue to review JLR’s import data for potential duty suspensions, that allow duty reductions on future imports.

Furthermore, we provide training to JLR’s customs team and act as advisors to them on classifications for new components and assemblies for overseas shipments. We also work closely with JLR’s internal Customs Compliance team to ensure their new Customs Duty Management Systems are used in the correct and most efficient manner.

Results

  • The initial targets set by JLR have been met and far exceeded; the initial target was the recovery of £12 million in customs duty.
  • So far in reclassification the client has received cash repayments from HMRC of £54.02m.
  • Cash flow benefits have been achieved by reducing JLR’s duty liability by more than 58%.
  • The result of ongoing duty savings from our suspensions work is in the region of £6m per annum.

The long-term benefit of our work is an improved customs compliance process at JLR, minimising customs duty for future imports

Our work with Jaguar Land Rover resulted in us winning the 2014 CIPS Supply Chain Management Award for Best Procurement Consultancy Project of the Year.

Find out how we can help with our Customs Classifications Service.

The team at Customs Connect provided a professional and efficient service. Their expertise with respect to Import Duty supported Jaguar Land Rover in realising opportunities which added significant value to its business.

Dr Ralf Speth, CEO, Jaguar Land Rover
Contact us today +44 (0)845 519 0878