UK CBAM: What importers should prepare before January 2027.

The UK Carbon Border Adjustment Mechanism (UK CBAM) introduces new tax, reporting and record-keeping obligations for certain carbon-intensive imports. Although the first return and payment will not be due until 31 May 2028, they will cover imports made during 2027.

Customs information must be captured from the start of 2027. Where actual emissions data will be used, the relevant supplier data and verification evidence must be secured in time for reporting.

So, what should businesses be preparing now?

1. Identify which imports could be affected

The first step is to establish whether your business imports goods covered by UK CBAM.

At launch, UK CBAM will apply to specified goods in five sectors: aluminium, cement, fertiliser, hydrogen, iron and steel.

However, being active in one of these sectors does not automatically mean every product you import is covered. Scope is determined by commodity classification, with the relevant commodity codes set out in Schedule 16 to the Finance Act 2026.

Start by reviewing your UK import data and identifying the commodity codes that may fall within scope.

The aim is to move beyond a general understanding of the affected sectors and establish which of your actual imports require attention.

The UK government is also consulting on a possible future expansion of UK CBAM to include certain refinery products. This is not part of the confirmed scope for January 2027.

2. Confirm liability and monitor the £50,000 threshold

Once potentially affected goods have been identified, businesses need to establish who is the liable person for UK CBAM purposes.

The liable person is the importer for UK CBAM purposes. Where a customs declaration is made on another person’s behalf, the person on whose behalf it is made is the liable importer.

It is also important to understand whether the business could reach the £50,000 minimum registration threshold.

This threshold is based on the value of imported CBAM goods, not their weight or the amount of CBAM tax payable.

The threshold must be monitored throughout the year. Businesses must consider whether they expect to import £50,000 or more of relevant CBAM goods within the next 30 days. On the first day of each month, they must also check whether relevant imports reached £50,000 over the preceding 12 months. Imports before 1 January 2027 are excluded.

Importers should therefore establish how affected import values will be identified and monitored, rather than waiting until the end of the year to assess their position.

Although UK CBAM takes effect on 1 January 2027, HMRC's registration service opens in January 2028. Businesses becoming liable during 2027 have until 31 January 2028 to register. They must still monitor affected imports and retain the necessary records throughout 2027.

3. Review your customs data and estimate the financial impact

UK CBAM brings together information that may already exist across different parts of a business.

Commodity classification, importer details, customs value, net weight, origin and customs procedure information all contribute to understanding the UK CBAM position of imported goods.

Accurate customs data is essential. Incorrect net weights can affect calculated embodied emissions, while incorrect commodity codes can change whether goods fall within scope and which default emissions values apply.

Before January, importers should review the quality of their customs data and identify gaps that could make UK CBAM reporting more difficult later.

This also creates an opportunity to establish a consistent way of identifying affected shipments as they enter the UK.

Businesses can also use HMRC’s published default emissions values and illustrative sector rates to estimate potential UK CBAM costs. The illustrative rates are not the final rates for 2027. These initial estimates can help assess the impact on purchasing budgets and margins, although the final tax payable will depend on the applicable rates, emissions information and any eligible Carbon Price Relief.

4. Start the emissions data conversation with suppliers

UK CBAM liability is linked to the emissions embodied in imported goods.

Importers can use actual verified emissions data or applicable government default emissions values.

For businesses intending to use actual emissions data, supplier engagement is particularly important.

The relevant information may need to come from the producer or producing installation. Actual emissions data must meet UK CBAM monitoring and independent verification requirements.

Importers should ask suppliers whether producing installations have emissions data for calendar year 2026 that can be verified for UK CBAM purposes. Qualifying verified 2026 data may be usable for 2027 imports where verified 2027 data is unavailable, subject to the applicable requirements.

Where actual emissions data will be used, importers should also establish how they will obtain the relevant verification report or goods-specific verification summary. The choice between default values and actual emissions data should be considered before filing, as a submitted return cannot subsequently be amended simply to replace default values with actual emissions information.

Useful questions to address now include:

• Which suppliers and producing installations are associated with affected goods?
• Can they provide the required emissions data, verification reports or goods-specific verification summaries?
• Who will coordinate supplier requests and ensure the supporting evidence is available before filing?

These conversations can take time, particularly where information needs to be gathered from several suppliers or production locations.

Starting early gives businesses more opportunity to identify missing information before it becomes a reporting problem.

5. Establish record-keeping and reporting processes

Businesses should not wait until the first UK CBAM return is due to reconstruct their 2027 import activity.

The first accounting period runs from 1 January to 31 December 2027, with the first return and payment due by 31 May 2028. UK CBAM then moves to quarterly accounting periods from 2028.

Importers should prepare to retain the customs, supplier and emissions information needed to support their obligations.

Depending on their circumstances, this may include records of affected goods, import dates, customs values, net weights, origin, customs procedures, producing installations, emissions information and supporting verification evidence.

Records should also remain traceable to individual consignments. Businesses should not rely solely on annual totals when preparing their reporting information.

Where relevant, businesses should also consider whether Carbon Price Relief could apply and what supporting information would be required.

Businesses below the registration threshold should also keep records supporting their position. Relevant UK CBAM records generally need to be retained for six years from their creation or the end of the accounting period they relate to, whichever is later.

The practical objective is to make sure information can be retrieved and supported when required, rather than assembled retrospectively under reporting deadlines.

6. Make sure responsibilities are clear internally

UK CBAM is not solely a customs-data issue.

The information needed to prepare may involve customs operations, finance, compliance, procurement and suppliers. Without clear ownership, individual pieces of information can remain disconnected.

Before UK CBAM begins, businesses should establish who will coordinate the preparation process, monitor affected imports and the registration threshold, request emissions information, maintain supporting records and oversee reporting obligations.

External support may help with individual activities, but the liable person remains responsible for meeting their UK CBAM obligations.

Clear responsibilities now can help prevent gaps between the teams and organisations involved.

Preparation should begin before the first reporting deadline

For affected importers, the priority is to identify gaps now, before UK CBAM takes effect. Reliable customs data, early supplier engagement, an understanding of potential costs and clear internal responsibilities will make it easier to meet the requirements as they begin to apply.

Take the next step with our free UK CBAM readiness checklist

We have created a practical UK CBAM readiness checklist to help importers assess their exposure, prepare the relevant information and identify where further action may be needed.

Explore our UK CBAM Trade Intelligence page and download the free readiness checklist.

For businesses looking for support, Gaston Schul can help review customs information, identify potentially affected imports and support preparation for the new requirements.