UK CBAM 2027: Registration, Goods and Importer Duties

The UK Carbon Border Adjustment Mechanism (CBAM) is scheduled to apply from 1 January 2027 to specified imports in carbon-intensive sectors. It is a business compliance and tax issue for importers, not a general charge on every imported product.

HMRC's September 2026 Agent Update says the second tranche of regulations needed to implement CBAM has been laid, together with a supporting notice that has force of law. HMRC still expects to publish additional guidance before operation, so businesses should distinguish enacted implementation material from technical details that remain subject to further publication.

The initial sectors are aluminium, cement, fertiliser, hydrogen, and iron and steel. A person may need to register with HMRC when the value of relevant CBAM goods imported over the applicable period reaches the £50,000 minimum registration threshold. HMRC describes both a forward-looking 30-day test and a backward-looking 12-month test.

This is separate from ordinary customs duty, import VAT and the existing rules for low-value imports. Review the UK low-value imports guide for that separate policy, and use the VAT Registration guide when the question is VAT registration rather than CBAM.

What is UK CBAM?

CBAM is intended to place a comparable carbon price on certain high-emissions goods imported into the UK to reduce carbon leakage. UK producers can face carbon pricing under the UK Emissions Trading Scheme; CBAM addresses the comparable import side for specified goods.

The mechanism is not simply a tariff on the country of origin. The amount depends on the covered goods, their emissions information, applicable carbon pricing and the published calculation rules. HMRC has indicated that detailed guidance and default emissions values will be published ahead of introduction.

Goods and sectors in scope

The initial policy covers selected goods from these sectors:

The sector list is therefore a starting filter, not a substitute for commodity-code checking. A business that imports a product used in one of these industries should check whether the actual imported good is a CBAM good.

The £50,000 registration threshold

HMRC's policy summary sets the minimum registration threshold at £50,000 of CBAM goods imported, or expected to be imported, over the relevant period. It describes two tests:

For the first calendar year, HMRC says the backward-looking calculation only needs to look back to 1 January 2027. If both tests are met, the liability starts from the earlier relevant date. Keep a rolling schedule rather than waiting until the year-end.

The threshold is not a free allowance that reduces tax on the first £50,000. It is a registration trigger. Other customs, VAT and business obligations can apply independently.

Who is the liable person?

The liable person is the person responsible under the CBAM rules for importing the relevant goods. That is not always the same as the manufacturer, overseas supplier or freight agent. Contract terms, customs declarations, importer-of-record arrangements and the actual supply chain need to be checked together.

An overseas business producing the goods may provide information about embodied emissions or carbon prices, but that does not automatically transfer the UK importer's registration and return duties. A customs intermediary may submit information on a business's behalf without becoming the business that bears every underlying obligation.

What a registered business must prepare

HMRC says a person liable for CBAM must register, keep records of CBAM goods, submit CBAM returns and pay the tax due. Prepare a controlled data set containing:

1. commodity codes and product descriptions;
2. import dates and the relevant tax point;
3. the value of each covered import;
4. the importer and customs-declaration evidence;
5. quantity and country of origin;
6. direct and, where required, indirect emissions information;
7. carbon prices already paid that may affect relief or calculation; and
8. supplier evidence, assumptions and any default values used.

Do not mix CBAM records with a generic purchase ledger and assume the result is complete. The business needs to be able to show why a product was included or excluded and how the rolling threshold was tested.

Carbon information and default values

The CBAM amount is linked to emissions and UK carbon pricing. HMRC says further details, including default emissions values, will be published before introduction. That means an importer should not invent a final 2027 rate or assume that a supplier's sustainability certificate automatically determines the tax result.

Ask suppliers early for product-level emissions information and the evidence behind it. Keep a versioned record of the methodology used for each shipment. If the official calculation, qualifying carbon-pricing schemes or commodity-code guidance changes, update the calculation and retain the earlier evidence used for filed returns.

Origin, private imports and customs procedures

CBAM is based on the goods and their origin, not only the country from which the lorry or vessel departed. HMRC's policy summary says goods with a UK place of origin under the UK's non-preferential origin rules are outside CBAM. A product manufactured overseas and shipped from a UK warehouse does not therefore become UK-origin merely because the final dispatch is from the UK. Keep the origin evidence and customs declaration that support the classification.

Private individuals importing covered goods for non-commercial purposes are also outside the CBAM liability tests. That exclusion does not turn a business import into a private import: the purpose, importer and customs facts must be recorded consistently. A small business owner who orders goods for stock, production or resale should not rely on the fact that the order was placed personally.

Returned-goods relief can remove CBAM liability where the customs conditions are met. HMRC also describes a specific case for Union goods exported from Northern Ireland to the EU and re-imported into the UK: the goods must be re-imported within three years and returned in the same state. Full-relief temporary admission can also keep goods outside CBAM, while partial or no customs-duty relief does not. These are evidence-based customs outcomes, not blanket exemptions for goods that happen to be returned or temporarily stored.

Special customs procedures require a careful tax-point review. A covered good may be processed under storage, inward processing or authorised use before the CBAM tax point. If it becomes a non-CBAM good, the liability can still be based on the relevant portion of the original covered good when the tax point occurs. If it is exported before the tax point, HMRC says there is no CBAM liability and the goods do not count towards the registration threshold. Map the customs procedure, processing step and tax point for each unusual flow.

Registration timing and first-year filing calendar

The £50,000 tests determine when a person becomes liable to register, but the registration deadline is a separate operational rule. Ordinarily, HMRC says the liable person has 30 days from becoming liable. During the first calendar year, however, businesses have until 31 January 2028 to register. This does not remove the need to monitor the threshold from 1 January 2027 or to retain the underlying import records while the registration facility is being prepared.

The first accounting period runs from 1 January 2027 to 31 December 2027. The first return and payment are due on 31 May 2028, five months after the period ends. A nil-liability period still requires a return once the business is within the registered regime. From 1 January 2028, accounting periods move to a quarterly cycle with a two-month return and payment window. For example, the first 2028 quarter is due on 31 July 2028, and the October-to-December 2028 quarter is due on 28 February 2029.

Use a calendar owned by the customs or tax team, not only the finance year-end calendar. The filing timetable is based on CBAM accounting periods and can apply even where qualifying carbon pricing reduces the amount payable to zero. Record the date the threshold was met, the date of registration, each accounting period, the return owner, the evidence reviewer and the payment approval.

What the first CBAM return must contain

HMRC's policy summary says each consignment of the same covered good must be reported separately, and different covered goods in the same shipment must also be reported separately. The return data includes the relevant eight-digit commodity code, net weight in kilograms, emissions intensity in tonnes of CO2e per functional unit, qualifying carbon price in pounds where applicable, the quarter of the tax point for the first period and the country of origin under the non-preferential customs rules.

That list should shape the import data model now. Do not rely on a single annual supplier total or a purchase-ledger description such as “steel parts”. Link each line to the customs declaration, commodity code in force at the tax point, weight, producer emissions evidence or default value, carbon-price evidence and origin record. If a tax agent submits the return, the importer remains the liable person; an agent can act for the business but cannot register on its behalf and does not automatically assume the underlying liability.

If the final return contains an error, HMRC's policy summary allows an amendment within three years of the end of the relevant accounting period. Retain enough evidence to support a correction or repayment claim. A post-filing adjustment should explain the original value, the corrected value, the reason, the affected consignment and the approval trail rather than silently overwriting the working file.

How CBAM differs from other import charges

One shipment can raise more than one of these questions. Paying import VAT does not settle CBAM, and being registered for VAT does not by itself register a business for CBAM.

Frequently Asked Questions

For preparation, identify the commodity codes, importer-of-record position and rolling £50,000 exposure first. Then build the emissions and carbon-price evidence trail. Recheck HMRC's official CBAM collection before the first 2027 imports because technical guidance and qualifying schemes can change.

Official sources

• HMRC: Carbon Border Adjustment Mechanism policy summary
• HMRC: Introduction of Carbon Border Adjustment Mechanism
• HMRC: Check if you need to register for CBAM
• HMRC: CBAM factsheet
• HMRC: Current qualifying carbon-pricing schemes
• HMRC: Agent Update issue 147