UK CBAM Declarant Authorisation: Who Can Submit CBAM Returns and How to Register for Compliance Before 2027
An Implementation Guide for Compliance Managers Preparing for UK CBAM 2027
CBAM Journal | Sekason Research Limited | London
Scope & Disclaimer
This report is produced by CBAM Journal, operated by Sekason Research Limited (Company No. 14339910), for informational purposes only. It does not constitute legal, financial, tax, or regulatory advice, and should not be relied upon as such. No endorsement of any named company or product is intended or implied. Where company-reported figures appear, they are identified as such. Readers should seek independent professional advice before taking any compliance action.
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1. Executive Summary
1.1 Key Findings
FINDING: UK CBAM commences on 1 January 2027 under the Finance Act 2026, with a £50,000 rolling 12-month registration threshold applied to the value of in-scope imported goods, and the importer — not a tax agent or customs broker — confirmed as the liable person under section 146 of the Act.
SO WHAT: Organisations that have outsourced customs administration to freight forwarders or brokers cannot transfer CBAM liability by doing so; the legal and financial exposure remains with the entity named on the customs declaration.
NOW WHAT: Every organisation importing steel, aluminium, cement, fertilisers, or hydrogen into the UK must confirm its legal importer status and initiate internal compliance preparation before 1 January 2027.
Three findings define the compliance exposure this report addresses.
The importer is liable under Finance Act 2026, section 146 — not the customs broker, not the freight forwarder, and not the tax agent who may submit the return.
The £50,000 rolling 12-month registration threshold is measured on the value of the imported goods, not the CBAM charge — meaning commercial importers in covered sectors reach it in ordinary course.
And the first UK CBAM return, covering all 2027 imports, must be submitted with payment by 31 May 2028 — a deadline that requires supplier data infrastructure, governance, and registration to be in place from day one of the regime.
The five most operationally significant findings from this report are as follows.
Finding 1 — Liability rests with the importer, not the agent.
Under the Finance Act 2026, section 146, the person liable for UK CBAM is the importer of the CBAM goods — specifically, the person in whose name the customs declaration is made, or on whose behalf the goods are imported. A tax agent may submit CBAM returns on the importer's behalf, but cannot register, and bears no legal liability. Organisations that assume their customs broker or freight forwarder absorbs CBAM responsibility carry a material compliance risk.
Finding 2 — The £50,000 threshold triggers mandatory registration.
Registration is required once cumulative imports of in-scope CBAM goods exceed £50,000 on a rolling 12-month basis, under Finance Act 2026, Schedule 17. This is a value threshold applied to the goods, not a CBAM charge threshold. Organisations importing modest volumes of high-value CBAM goods may reach this trigger earlier than anticipated.
Finding 3 — Secondary legislation was laid on 13 July 2026.
HMRC published the force-of-law notice and secondary legislation on 13 July 2026, covering registration, returns, rate calculation, carbon price relief, and transitional provisions. Compliance programmes based on pre-July 2026 summaries are operating from an incomplete picture of the administrative framework.
Finding 4 — The first UK CBAM return covers the full year 2027 and is due by 31 May 2028.
Imports from 1 January 2027 are within scope. The first return and payment deadline is 31 May 2028. Despite the apparent lead time, organisations must have registration, supplier data systems, and embedded carbon records in place from day one of the regime.
Finding 5 — The UK and EU declarant models are structurally different.
The EU regime requires importers and indirect customs representatives to obtain authorised CBAM declarant status through the CBAM Registry before covered goods can be imported in the definitive regime. The UK regime establishes liability through the customs declaration without a separate pre-authorisation step. Multinational organisations cannot apply a single compliance model across both jurisdictions.
Key Reference Table | |
UK CBAM commencement | 1 January 2027 |
Registration threshold | £50,000 rolling 12-month value of in-scope imports |
Liable person | The importer (person named on the customs declaration) |
Registration channel | Government Gateway |
First return period | Full calendar year 2027 |
First return and payment deadline | 31 May 2028 |
Governing legislation | Finance Act 2026, Part 5, sections 143–149; Schedule 17 |
Secondary legislation date | 13 July 2026 |
EU definitive regime commencement | 1 January 2026 |
EU first annual declaration deadline | 31 May 2027 |
1.2 Executive Recommendations
FINDING: HMRC registration for UK CBAM opens via Government Gateway, with secondary legislation providing the administrative framework from 13 July 2026, giving compliance teams a defined but limited window to prepare before 1 January 2027.
SO WHAT: Organisations that delay internal mobilisation until late 2026 risk incomplete registration, inadequate supplier data collection, and unresolved governance gaps at the point the regime becomes operational.
NOW WHAT: Compliance Managers must initiate a structured implementation programme immediately, targeting registration readiness and supplier data infrastructure completion before 1 January 2027.
Five priority actions, in order of execution:
Confirm legal importer status for every supply chain involving steel, aluminium, cement, fertilisers, or hydrogen. Identify which legal entity is named on each customs declaration. Where group structures involve multiple import entities, determine which entity carries CBAM liability for each product category. Complete this mapping before HMRC registration opens in late 2026.
Establish threshold monitoring. Begin tracking the rolling 12-month value of in-scope CBAM imports against the £50,000 threshold immediately. Assign ownership to the Finance or Customs function. Where the threshold is already exceeded on a forward-looking basis, treat registration as imminent.
Engage overseas suppliers on embedded carbon data. Most UK importers will not receive verified emissions data from suppliers without a formal data request. Initiate supplier engagement programmes now to ensure records are available for the first return covering 2027 imports.
Assign internal governance ownership. Appoint a named CBAM compliance owner with cross-functional authority across Customs, Finance, Procurement, and Sustainability. Define departmental responsibilities using a RACI framework before registration begins.
Register via Government Gateway when the service opens. Monitor HMRC announcements for the registration opening date. Ensure the legal entity completing registration matches the entity named on the relevant customs declarations. Confirm with any appointed tax agent the scope of their authority and the governance arrangements governing their role.
Priority Matrix | ||
Priority | Action | Risk if delayed |
High | Confirm legal importer identity | Incorrect registration; misassigned liability |
High | Begin threshold monitoring | Late registration; compliance breach from day one |
High | Initiate supplier data requests | Incomplete returns; potential default value penalties |
Medium | Assign governance ownership | Fragmented implementation; audit exposure |
Medium | Prepare Government Gateway registration | Late registration once service opens |
1.3 Report at a Glance
Element | Detail |
Regulation | UK Carbon Border Adjustment Mechanism |
Governing legislation | Finance Act 2026, Part 5; Schedule 17; secondary legislation laid 13 July 2026 |
Commencement | 1 January 2027 |
In-scope sectors | Steel, Aluminium, Cement, Fertilisers, Hydrogen |
Out of scope (UK launch) | Electricity |
Registration threshold | £50,000 rolling 12-month value |
Liable person | Importer (customs declaration name) |
Return submission | Importer or appointed tax agent |
First return deadline | 31 May 2028 (covering 2027 imports) |
Charge basis | Sectoral domestic price × tonnes of CO2e embodied in the imported goods |
Penalty framework | Established via secondary legislation; specific amounts to be confirmed |
EU comparison | EU requires authorised CBAM declarant pre-authorisation; UK does not |
2. Regulatory Context
2.1 Why UK CBAM Was Introduced
FINDING: The Finance Act 2026 established UK CBAM as a fiscal mechanism to prevent carbon leakage — the condition in which UK manufacturers face a domestic carbon price under the UK Emissions Trading Scheme while competing against imports from producers in jurisdictions with no equivalent carbon cost.
SO WHAT: Importer liability exists because the carbon cost is incurred at the point of entry into the UK market, not at the point of production; placing the obligation on the importer — rather than the overseas manufacturer — is the mechanism through which the policy equalises competitive conditions for UK producers.
NOW WHAT: Compliance Managers must treat UK CBAM not as a customs duty analogous to tariffs but as a tax obligation tied to the embedded carbon content of specific goods, which requires a separate administrative structure — beginning with HMRC registration — before 1 January 2027.
UK CBAM addresses a specific market distortion: UK manufacturers in carbon-intensive sectors are subject to the UK ETS carbon price on their domestic production emissions, while importers of equivalent goods from jurisdictions without equivalent carbon pricing face no comparable cost at point of import. Without a border adjustment mechanism, UK domestic producers carry a structural cost disadvantage relative to international competitors. The Finance Act 2026 closes this gap by charging importers on the embedded carbon in covered goods, calculated by reference to the sectoral domestic carbon price.
The importer liability model reflects the point at which goods enter the UK regulatory perimeter. The overseas manufacturer sits outside the UK tax jurisdiction. The importer — as the economic actor completing the customs declaration and bringing the goods into the UK market — is the appropriate point of legal attachment for the charge. The customs declaration is therefore the defining instrument of UK CBAM liability, and the identity of the importer is the first and most consequential governance question any organisation must answer.
The UK CBAM charge is calculated by reference to a sectoral domestic price under the Finance Act 2026, section 149, which is linked to the carbon pricing environment for UK producers in equivalent sectors. The purpose is competitive equivalence, not revenue generation. Compliance Managers briefing their CFO should present UK CBAM as a regulatory cost of import activity in covered sectors — not as a customs duty negotiable through trade agreements or preferential tariff schedules.
2.2 Legal Framework
FINDING: The UK CBAM legal framework comprises the Finance Act 2026, Part 5, sections 143–149 and Schedule 17, supplemented by secondary legislation laid on 13 July 2026 covering registration, returns, rate calculation, carbon price relief, and transitional provisions, together with HMRC's force-of-law notice published on the same date.
SO WHAT: The secondary legislation of 13 July 2026 is the operative administrative document for compliance planning — it fills the gaps left by the primary Act on registration mechanics, return filing procedures, and enforcement — and any compliance programme not reviewed against it is built on an incomplete foundation.
NOW WHAT: Compliance Managers must ensure their legal and compliance teams have reviewed both the Finance Act 2026 and the July 2026 secondary legislation before finalising registration plans and governance structures, as the secondary legislation governs the administrative detail that determines day-to-day compliance obligations.
Legislative Instrument | Content | Date |
Finance Act 2026, Part 5, sections 143–149 | Establishes UK CBAM, defines scope, importer liability, charge calculation basis | 17 March 2026 |
Finance Act 2026, Schedule 17 | Administration and enforcement, including registration threshold | 17 March 2026 |
UK CBAM Secondary Legislation | Registration, returns, rate calculation, carbon price relief, transitional provisions | 13 July 2026 |
HMRC Force-of-Law Notice | Operational notice confirming commencement and administrative framework | 13 July 2026 |
HMRC CBAM Policy Summary | Policy summary setting out HMRC's interpretation of obligations | 9 February 2026 (updated July 2026) |
The Finance Act 2026 establishes the legal basis for the charge. It defines which goods are within scope, who the liable person is, and how the charge is calculated. Schedule 17 covers the administrative and enforcement architecture, including the registration threshold. The Act creates the legal obligation but delegates significant operational detail to secondary legislation — which is why the July 2026 regulations are essential reading, not supplementary.
The HMRC policy summary published on 9 February 2026 and updated following the July 2026 legislation provides HMRC's interpretive framework. It confirms that the liable person is the importer, that a tax agent may be appointed to submit returns, and that registration is compulsory once the threshold is met. The force-of-law notice published on 13 July 2026 confirmed the regime's commencement date and gave operational authority to the administrative provisions.
For compliance purposes, the legislative hierarchy is: Finance Act 2026 (primary) → July 2026 secondary legislation (administrative framework) → HMRC Policy Summary (interpretive guidance).
All three documents must be read together. No single document provides a complete picture of compliance obligations.
2.3 UK vs EU Declarant Models
FINDING: Under UK CBAM, the liable person is the importer identified on the customs declaration, with no pre-authorisation requirement before importing covered goods; under the EU definitive regime, which became operational on 1 January 2026, importers and indirect customs representatives must obtain authorised CBAM declarant status through the CBAM Registry before importing covered goods.
SO WHAT: A multinational organisation that has prepared for EU CBAM under the authorised declarant model cannot apply the same governance structure to UK CBAM — the UK regime has no Registry authorisation step, places liability directly on the importer via the customs declaration, and allows tax agents to submit returns without acquiring a separate authorisation.
NOW WHAT: Organisations active in both the UK and EU must build and maintain separate compliance workflows for each jurisdiction, with different governance owners, registration timelines, and reporting structures, before 1 January 2027.
Comparison Dimension | UK CBAM | EU CBAM (Definitive Regime) |
Liable person | Importer (named on customs declaration) | Authorised CBAM Declarant |
Pre-import authorisation | None required | Required — authorised declarant status must be obtained before importing |
Registration process | HMRC registration via Government Gateway once £50,000 threshold met | Application via CBAM Registry / AMM in Member State of establishment |
Who may submit returns/declarations | Importer directly, or appointed tax agent on their behalf | Authorised CBAM Declarant (the declarant is the responsible party) |
Liability transfer to agent | No — liability remains with the importer | No — declarant bears legal responsibility |
Customs representative role | Tax agent may submit returns; no separate authorisation required | Indirect customs representatives may apply for declarant status |
Commencement | 1 January 2027 | 1 January 2026 (definitive regime) |
First reporting deadline | 31 May 2028 (first annual return) | 31 May 2027 (first annual declaration) |
Registry | Government Gateway | CBAM Registry / AMM (EC platform) |
Governing regulation | Finance Act 2026; secondary legislation July 2026 | Regulation (EU) 2023/956; Implementing Regulation (EU) 2025/486 |
In the EU, authorised declarant status is a prerequisite — an importer without this status cannot legally import covered goods in the definitive regime. The EU regime's administrative burden is front-loaded: the declarant must apply, be assessed, and receive authorisation before any import occurs. In the UK, no equivalent front-end gate exists; liability attaches at the point of import by virtue of the customs declaration, and registration is required once the threshold is met rather than as a precondition of importing.
For organisations managing both regimes, the governance complexity goes beyond maintaining two calendars. The accountable person may differ: in the EU, the authorised declarant is an explicitly named and Registry-registered entity; in the UK, the liable person is determined by the customs declaration. Where different entities handle UK and EU imports, or where indirect customs representatives are used in the EU, the identity of the responsible compliance owner may differ between regimes and must be confirmed separately for each.
The EU regime was operational from 1 January 2026, with the CBAM Registry authorisation module having opened on 31 March 2025. Organisations that have already obtained EU authorised declarant status should not assume that entity automatically constitutes the UK liable importer — the two determinations turn on different legal tests.
2.4 What Changed During 2026
FINDING: Two defining regulatory developments occurred in 2026: the Finance Act 2026 was enacted and published on 17 March 2026, establishing the primary legal framework, and secondary legislation was laid on 13 July 2026 covering the operational administrative structure, including registration mechanics, rate calculation, and transitional provisions.
SO WHAT: The July 2026 secondary legislation substantially advanced the level of compliance certainty available, superseding earlier policy summaries and consultations that lacked operational detail on registration tests and administrative procedures.
NOW WHAT: Compliance Managers must review their implementation programmes against the July 2026 secondary legislation as the current operative framework, and must monitor HMRC for any further guidance notices issued before 1 January 2027.
Date | Development | Operational Impact |
9 Feb 2026 | HMRC published CBAM Policy Summary | First definitive HMRC statement on importer liability, tax agent role, and registration threshold |
17 Mar 2026 | Finance Act 2026 enacted | UK CBAM established in primary law; sections 143–149 and Schedule 17 operative |
31 Mar 2025 | EU CBAM Registry authorisation module opened | EU authorised declarant applications accepted — predates UK Act; creates parallel EU obligation for multinationals |
1 Jan 2026 | EU definitive regime commenced | Authorised declarant status became mandatory for EU imports |
26 May 2026 | European Commission updated CBAM Q&A | Confirmed authorised declarant requirement for definitive-phase EU imports |
13 Jul 2026 | UK secondary legislation laid; HMRC force-of-law notice published | Administrative framework for registration, returns, rate calculation, carbon price relief, and transitional provisions confirmed |
The publication of HMRC secondary legislation on 13 July 2026 is the single most consequential development for compliance preparation. Earlier consultations and policy summaries — including the February 2026 policy summary — established the broad parameters of UK CBAM but left the registration mechanics, return filing procedures, and penalty framework to secondary legislation. Compliance programmes structured before July 2026 may contain material gaps.
The force-of-law notice published simultaneously confirmed that the regime commences on 1 January 2027 and gave operative authority to the administrative provisions. This combination of secondary legislation and force-of-law notice represents the current definitive regulatory position. Any forthcoming HMRC guidance will refine rather than replace this framework, though compliance teams should monitor HMRC channels for further operational notices before commencement.
3. Compliance Obligations
3.1 Who Is the Liable Person?
FINDING: HMRC states that "the person liable for CBAM is the importer of the CBAM goods," defined under Finance Act 2026, section 146 as the person in whose name the customs declaration is made, or the person on whose behalf the goods are imported.
SO WHAT: Organisations that import in their own name are the liable person regardless of whether they use freight forwarders, customs brokers, or logistics agents to manage physical movement and customs administration — responsibility cannot be contracted away.
NOW WHAT: Every organisation importing steel, aluminium, cement, fertilisers, or hydrogen into the UK must confirm which legal entity's name appears on the customs declaration for each product category before registration opens, as that entity is the CBAM liable person.
Finance Act 2026, section 146 defines the liable person through the mechanism of the customs declaration. The importer is not the entity that procures the goods commercially, nor the entity that pays the supplier invoice, nor the entity that takes physical delivery at the UK border. The liable person is the entity named on the customs declaration — or, where goods are imported on behalf of another party, the entity on whose behalf the declaration is made.
This definition has material implications for group structures. The Finance Act 2026, section 146 does not address group structures explicitly; applying the statutory definition to a common group scenario, the subsidiary named on the customs declaration is the liable person — even where commercial decision-making, financing, and ultimate benefit of the goods rest with a parent entity.
Compliance Managers in multi-entity groups must map each import stream to the legal entity on the customs declaration, not to the commercial entity in the group's procurement structure. Legal advice should be obtained to confirm the treatment of specific group arrangements.
The same analysis applies to buying agents. Where an agent imports goods on behalf of a principal, the agent is named on the customs declaration and is the importer for customs purposes. Whether that agent also constitutes the CBAM liable person depends on whether the import is made on the agent's own behalf or on behalf of the principal. The treatment of indirect representation and buying agent arrangements under UK CBAM has not been addressed in published HMRC guidance at the time of publication. Organisations using agent-import structures should obtain legal advice specific to their arrangement before registration. Organisations using agent-import structures should not assume a single answer applies to all arrangements.
Declarant Decision Framework | |
Question | Implication |
Which legal entity is named on the customs declaration? | That entity is the primary CBAM liable person |
Is the import made on another party's behalf? | Confirm whether principal or agent bears liability under the relevant arrangement |
Does the group have multiple import entities? | Each entity is assessed separately; group-level registration is not a substitute |
Is a freight forwarder or customs agent completing the declaration? | Confirm whether they are acting in their own name or on behalf of the importer |
3.2 Who May Submit CBAM Returns?
FINDING: Under the HMRC CBAM Policy Summary of 9 February 2026, the liable person (the importer) may appoint a tax agent to submit CBAM returns on their behalf, but the tax agent cannot register for UK CBAM and bears no legal liability for the accuracy or timeliness of the return.
SO WHAT: Delegating return submission to a tax agent is an administrative arrangement only — if the return is late, incorrect, or incomplete, the legal and financial consequences fall on the importer, not the agent.
NOW WHAT: Organisations that intend to use a tax agent to submit returns must formalise the governance arrangements — defining the agent's scope of authority, data provision obligations, and review process — before the first return is due on 31 May 2028.
The distinction between who may submit a CBAM return and who is liable for that return is the most operationally misunderstood governance issue in UK CBAM compliance. HMRC's confirmation that a tax agent may submit returns does not create a parallel liability structure. The return, once submitted, is the legal responsibility of the importer. A return submitted in error by a tax agent produces a regulatory consequence for the importer — not the agent. This is a contractual risk to be managed through service agreements and data verification processes, not assumed away by the act of delegation.
Whether customs brokers and freight forwarders may act as tax agents under UK CBAM has not been confirmed in published HMRC guidance at the time of publication. The July 2026 secondary legislation is the operative reference for this question. Compliance Managers should confirm the position directly with HMRC before appointing any party other than a registered tax agent to submit returns on their behalf. This is a material operational gap that needs resolution before registration opens.
Return Submission Responsibility Matrix | |||
Party | May Register | May Submit Returns | Bears Legal Liability |
Importer (liable person) | Yes | Yes | Yes — always |
Tax agent | No | Yes (if appointed by importer) | No |
Customs broker | [To be confirmed — see Research Gap above] | [To be confirmed] | No |
Freight forwarder | [To be confirmed — see Research Gap above] | [To be confirmed] | No |
Other intermediary | [To be confirmed] | [To be confirmed] | No |
Any delegation arrangement requires the importer to retain meaningful oversight. Providing a tax agent with data and receiving back a submitted return without internal verification is not a defensible compliance model. The importer should verify the data inputs to each return, retain records of the data provided to the agent, and confirm submission before the filing deadline.
3.3 Registration Requirements
FINDING: Registration for UK CBAM is mandatory once in-scope imports exceed the £50,000 rolling 12-month value threshold established in Finance Act 2026, Schedule 17, with the registration mechanism administered through Government Gateway and the regime commencing on 1 January 2027.
SO WHAT: The threshold is based on the value of the imported CBAM goods, not on the calculated carbon charge — meaning organisations importing relatively small volumes of high-value goods may cross the registration trigger much earlier in the year than anticipated.
NOW WHAT: Compliance teams must begin tracking cumulative CBAM goods import values on a rolling 12-month basis immediately, because the trigger date determines the point from which liability begins to accrue.
Finance Act 2026 and Schedule 17 establish two tests for registration: a forward-looking test and a backward-looking test. The forward-looking test requires registration where an importer expects to exceed the £50,000 threshold within the applicable look-ahead period specified in Schedule 17 and the secondary legislation.
The backward-looking test requires registration where the threshold has already been exceeded over the rolling 12-month period. The precise look-ahead period for the forward-looking registration test is set out in Finance Act 2026, Schedule 17, and the July 2026 secondary legislation. Compliance Managers should verify the specific time window against those instruments before finalising threshold monitoring procedures.
Special transitional rules apply for the period around 1 January 2027 commencement. The secondary legislation laid on 13 July 2026 includes transitional provisions, the specific mechanics of which are not fully set out in the Step 2 research data.
Registration Threshold Decision Matrix | ||
Scenario | Registration Required? | Action |
Cumulative CBAM imports over rolling 12 months already exceed £50,000 | Yes | Register without delay once Government Gateway service opens |
CBAM imports expected to exceed £50,000 within the look-ahead period under Schedule 17 | Yes — forward test applies | Register before those imports occur |
Cumulative CBAM imports are below threshold on both tests | Not yet | Maintain monthly monitoring; register when threshold is met |
Imports have exceeded threshold but organisation has not yet registered | Compliance breach | Register immediately; seek advice on late registration implications |
Only non-CBAM goods are imported | No | Monitor product scope annually |
Registration is completed through Government Gateway — the platform used for other HMRC registration obligations including VAT and customs declarations. The legal entity completing registration must be the same legal entity that constitutes the liable person under the customs declaration analysis. Where an organisation has multiple legal entities importing CBAM goods, each entity must assess the threshold separately and, if applicable, register separately.
HMRC has not yet published a definitive list of information required at the point of Government Gateway registration. Compliance Managers should monitor HMRC's CBAM guidance pages for registration service details as the commencement date approaches.
3.4 Record-Keeping Requirements
FINDING: Under the UK CBAM framework established by the Finance Act 2026 and HMRC policy guidance, liable persons must retain records from the point they become liable — including evidence of the imported goods, embedded carbon data from suppliers, and documentation supporting the accuracy of each CBAM return — even before the HMRC registration service is available.
SO WHAT: Organisations that import CBAM goods in 2027 but have not established supplier data collection processes by 1 January 2027 will face the first return period without the records needed to substantiate accurate embedded carbon figures, creating the risk of potential default value penalties and audit exposure.
NOW WHAT: Compliance Managers must implement supplier data collection programmes and internal document retention procedures before 1 January 2027, treating record-keeping as a day-one obligation rather than a pre-return preparation task.
The record-keeping obligation under UK CBAM is more operationally demanding than equivalent obligations under most trade-related taxes, because the central data point — embedded carbon in the imported goods — does not arise from a domestic process the importer controls. It arises from the production process of an overseas supplier, who may have no existing system for calculating, recording, or transmitting emissions data in the format required.
Most UK importers will not receive verified embedded carbon data from overseas suppliers without a formal engagement process. Compliance Managers should assume that supplier data will need to be actively requested, structured, and verified rather than passively received.
The specific record retention period and the evidential standard HMRC will require for embedded carbon data have not been confirmed in published guidance at the time of publication. HMRC default values for use where verified supplier data is unavailable are also subject to forthcoming guidance. Both should be confirmed against the July 2026 secondary legislation and any HMRC operational notices issued before 1 January 2027.
Record-Keeping — Indicative Minimum Framework | ||
Specific content requirements to be confirmed against the July 2026 secondary legislation and HMRC operational guidance. | ||
Record Type | Source | Purpose |
Customs declarations for each CBAM import | Customs agent / trader records | Confirms liable importer identity and goods in scope |
Commodity codes for each imported product | Customs declaration | Confirms in-scope classification |
Country of origin documentation | Supplier / shipping documents | Required for rate calculation |
Embedded carbon data | Supplier — production emissions records | Core data input for CBAM charge calculation |
Supplier verification documentation | Third-party or accredited verifier | Evidential support for embedded carbon figures |
CBAM return submissions | HMRC Government Gateway | Evidence of compliance with filing obligations |
Communications with appointed tax agent | Internal records | Governance evidence for agent arrangements |
The practical challenge of supplier data collection is greatest for importers in long or fragmented supply chains — a characteristic of steel products in particular, where the embedded carbon figure depends on the production route, the processing of intermediate products, and the energy mix of the manufacturing facility. For cement and fertilisers, embedded carbon figures depend heavily on production process chemistry and fuel inputs that vary between producers and facilities.
3.5 Governance Responsibilities
FINDING: HMRC guidance confirmed as of 13 July 2026 specifies that the importer is liable and that a tax agent may submit returns, but does not assign named departmental owners or provide an internal RACI model — leaving governance architecture entirely to each organisation.
SO WHAT: Without a defined governance structure, UK CBAM implementation is likely to become fragmented — with threshold monitoring owned by one function, supplier engagement by another, and return preparation by a third, with no single owner responsible for the end-to-end compliance cycle.
NOW WHAT: Compliance Managers must secure formal executive endorsement of a CBAM governance framework — naming owners for each functional responsibility and establishing reporting lines to Senior Management — before HMRC registration opens in late 2026.
UK CBAM is an enterprise-wide obligation. It touches customs operations (where the goods enter and who declares them), finance (where the liability is calculated and the charge is paid), procurement (where supplier data must be obtained), sustainability (where embedded carbon figures are assessed against company-wide reporting), and legal/compliance (where the regulatory framework is interpreted and return accuracy is assured). No single function can discharge all of these responsibilities without cross-functional coordination.
The RACI framework below assigns accountability at the functional level. Organisations should adapt it to their specific structure, including where functions are combined in smaller organisations or where additional specialist functions (such as Tax or Treasury) play a material role.
UK CBAM RACI Governance Matrix | ||||||
Responsibility | Compliance/Legal | Customs | Finance | Procurement | Sustainability | Senior Management |
Legal importer identification | A | R | C | I | I | I |
Threshold monitoring (£50,000) | A | C | R | I | I | I |
Government Gateway registration | A/R | C | C | I | I | I |
Supplier carbon data requests | A | I | I | R | C | I |
Embedded carbon data verification | A | I | I | R | R | I |
CBAM return preparation | A | C | R | I | C | I |
Tax agent oversight | A/R | I | C | I | I | I |
Board and executive reporting | A | I | C | I | I | R |
Penalty risk management | A/R | C | C | I | I | C |
Regulatory monitoring | A/R | C | I | I | C | I |
R = Responsible, A = Accountable, C = Consulted, I = Informed
Senior Management's primary UK CBAM governance role is oversight and resourcing. The Compliance or Legal function is accountable for the end-to-end framework. Finance owns financial calculations and payment execution. Procurement owns the supplier engagement process. Customs owns the import identification process. Sustainability provides technical support on embedded carbon methodology. None of these functions can operate in isolation from the others.
4. Key Dates and Deadlines
4.1 UK Timeline
FINDING: The UK CBAM timeline runs from the Finance Act enactment on 17 March 2026 through to the first return and payment deadline of 31 May 2028, with the regime commencing on 1 January 2027 and covering all in-scope imports from that date.
SO WHAT: The approximately 6-month window between the July 2026 secondary legislation and the 1 January 2027 commencement date is the primary implementation window — organisations that treat it as an awareness period rather than an execution period will face unresolved governance and data gaps when the regime becomes operational.
NOW WHAT: Compliance Managers must map internal implementation tasks against the UK timeline below and assign completion dates that build in verification time before each regulatory milestone.
Date | Regime Event | Operational Action Required |
17 March 2026 | Finance Act 2026 enacted — UK CBAM established in primary law | Begin legal framework review; initiate governance design |
9 February 2026 | HMRC Policy Summary published | Review importer liability definition; assess registration threshold against current import volumes |
13 July 2026 | Secondary legislation laid; HMRC force-of-law notice published | Review July 2026 regulations in full; finalise implementation programme; begin supplier engagement |
Late 2026 | HMRC Government Gateway registration expected to open | Confirm legal importer identity; prepare registration information; register once service opens |
1 January 2027 | UK CBAM commences | All imports from this date are within scope; registration must be in place; record-keeping obligations active |
Full year 2027 | First CBAM accounting period | All in-scope imports tracked, valued, and embedded carbon data collected for the full year |
31 May 2028 | First UK CBAM return and payment due | Submit return via Government Gateway (or appointed tax agent); pay CBAM charge |
4.2 EU Timeline
FINDING: The EU CBAM definitive regime became operational on 1 January 2026, with authorised declarant status mandatory for all imports of covered goods, and the first annual CBAM declaration due by 31 May 2027 covering 2026 imports.
SO WHAT: Organisations importing covered goods into both the UK and EU are under active EU CBAM obligations now and must simultaneously prepare for UK CBAM, creating a dual compliance burden with different declarant models, different registries, and different deadlines.
NOW WHAT: Compliance Managers with dual-jurisdiction exposure must coordinate UK and EU CBAM workstreams under a unified project structure, with named owners for each jurisdiction, and must not allow EU obligations — which are already live — to absorb resource at the expense of UK CBAM preparation.
Date | EU CBAM Event | Operational Action Required |
31 March 2025 | CBAM Registry authorisation module opened | Importers and indirect customs representatives could begin applying for authorised declarant status |
1 January 2026 | EU definitive regime commenced | Authorised declarant status became mandatory; imports without declarant status non-compliant |
26 May 2026 | European Commission updated CBAM Q&A | Confirmed authorised declarant requirement for all definitive-phase EU imports |
31 May 2027 | First EU annual CBAM declaration due | Declaration covers full year 2026 imports; must be submitted by authorised declarant |
Ongoing | Annual CBAM declarations | Each year's imports declared by 31 May of the following year |
The EU timeline creates an immediate compliance requirement that is separate from, and running ahead of, the UK CBAM implementation schedule. Organisations that have not yet applied for EU authorised declarant status through the CBAM Registry in their Member State of establishment are in breach of EU CBAM requirements if they are importing covered goods into the EU.
4.3 Compliance Calendar
FINDING: The UK CBAM annual compliance cycle — from threshold monitoring through supplier data collection, return preparation, and filing — requires continuous management across multiple functions, with the first full cycle running from 1 January 2027 to the return deadline of 31 May 2028.
SO WHAT: Reactive compliance management is structurally incompatible with UK CBAM's continuous monitoring and data collection requirements — organisations that manage CBAM as a periodic filing exercise will face data gaps and return inaccuracies.
NOW WHAT: Compliance Managers must embed UK CBAM into the organisation's recurring compliance calendar before 1 January 2027, assigning monthly and quarterly review responsibilities to named function owners.
Period | Key Task | Owner |
Now — 31 Dec 2026 | Complete legal importer mapping; initiate supplier data requests; finalise governance framework; register once Government Gateway opens; implement threshold monitoring | Compliance / Customs / Finance |
Jan 2027 | UK CBAM live — all imports within scope from 1 January; activate record-keeping for all in-scope shipments | Customs / Compliance |
Monthly — 2027 | Monitor rolling 12-month import value against £50,000 threshold; track embedded carbon data received from suppliers | Finance / Procurement |
Quarterly — 2027 | Review supplier data completeness; escalate gaps to Procurement; update embedded carbon records | Sustainability / Procurement |
Jan–Apr 2028 | Compile full-year 2027 import data; calculate CBAM liability; prepare return; review and verify with tax agent if applicable | Finance / Compliance |
31 May 2028 | Submit first CBAM return and pay CBAM charge via Government Gateway | Finance / Compliance |
5. Financial Exposure and Risk
5.1 Registration Threshold
FINDING: The registration threshold for UK CBAM is £50,000 of in-scope CBAM goods on a rolling 12-month basis, as established by Finance Act 2026, Schedule 17, measured by the value of the imported goods — not the value of the CBAM charge itself.
SO WHAT: The threshold can be reached by a relatively small number of high-value shipments; an importer purchasing steel or aluminium products with a combined annual value above £50,000 — a threshold that many commercial importers in covered sectors will reach in ordinary course — will meet the registration trigger.
NOW WHAT: Finance and Customs functions must implement a monthly import value tracking process for CBAM-classified goods, with a designated threshold owner responsible for triggering registration at the point the threshold is met.
The £50,000 threshold is an import value threshold, not a CBAM tax threshold. An organisation importing £60,000 of steel annually is required to register for UK CBAM even if the resulting CBAM charge represents a small fraction of that value. The threshold functions as an administrative de minimis — not a financial exemption below which the charge does not apply.
The Finance Act 2026, section 149 establishes that the CBAM charge is calculated as the sectoral domestic price multiplied by the tonnes of CO2e embodied in the imported goods. The sectoral domestic price is a UK-specific reference price linked to the carbon pricing environment for UK producers. Sectoral domestic prices are determined periodically rather than fixed in primary legislation. Compliance Managers should monitor HMRC guidance for the price schedule applicable to 2027 imports as it is published.
5.2 Liability Framework
FINDING: Under Finance Act 2026, section 149, the UK CBAM charge is calculated as the sectoral domestic price multiplied by the tonnes of CO2e embodied in the imported CBAM goods, with the importer remaining legally liable for the charge even where a tax agent submits the return on their behalf.
SO WHAT: The liability is structural — it attaches to the goods at the point of import and to the importer by virtue of the customs declaration — and cannot be avoided through supply chain restructuring that does not change the identity of the entity named on the customs declaration.
NOW WHAT: CFOs must include UK CBAM charge exposure in cost modelling for all import activity in covered sectors from 1 January 2027, using sectoral domestic price estimates as they are published by HMRC, and must not treat the cost as contingent or discretionary once the registration threshold is met.
The liability framework establishes that the importer is legally accountable for accurate calculation of the embedded carbon figure and the resulting charge. Where a tax agent submits the return, the agent provides an administrative service only — the agent does not certify the accuracy of the embedded carbon data or carry liability for errors in the calculation. Data quality assurance must sit with the importer.
The Finance Act 2026 and HMRC policy summary confirm that the charge basis is the emissions embedded in the imported product as defined in the Finance Act 2026 and July 2026 secondary legislation. The precise scope of embedded emissions covered under UK CBAM — including whether indirect electricity emissions are included for any sector and the treatment of precursor products — should be verified against Finance Act 2026, section 143 et seq. and the July 2026 secondary legislation for each sector in scope.
5.3 Penalties and Enforcement
FINDING: Finance Act 2026, Schedule 17, and the 13 July 2026 secondary legislation establish a UK CBAM penalty and enforcement framework covering registration failures, late or incorrect returns, and record-keeping non-compliance — though specific penalty amounts across all categories were not fully specified in the primary Act text.
SO WHAT: The existence of a confirmed penalty framework means non-compliance carries financial and reputational risk from 1 January 2027, even where precise monetary amounts for specific failures remain subject to secondary legislation detail not yet fully published at the time of this report.
NOW WHAT: Compliance Managers must treat the penalty framework as operative from 1 January 2027 and must not delay governance or registration preparations on the basis that penalty amounts are not yet fully published; confirmed penalty categories cover late registration, incorrect returns, and inadequate record-keeping.
The penalty framework established by Schedule 17 and the July 2026 secondary legislation covers at minimum: late or non-registration once the threshold is met; late or non-submission of returns; inaccurate or incomplete returns; and failure to maintain required records. HMRC's policy summary of 9 February 2026 confirmed a penalty structure exists but noted that exact penalty amounts across all categories are not all set out in the primary Act text — they are allocated to secondary legislation.
Specific penalty amounts for registration failures, late filing, incorrect declarations, and record-keeping non-compliance are set out in the July 2026 secondary legislation. These should be confirmed against that instrument before compliance risk assessments are finalised. EU CBAM penalty figures must not be substituted — the two regimes operate separate penalty frameworks.
The compliance response to unconfirmed penalty amounts is not inaction — it is to design processes that avoid the triggering conditions. Late registration, incorrect returns, and inadequate records are the conditions to eliminate. The financial consequence of eliminating them is zero. The consequence of triggering a confirmed penalty framework is material from day one of the regime.
5.4 Operational Risk Assessment
FINDING: The primary operational risks under UK CBAM are governance failures, incorrect identification of the liable importer, late registration, and inadequate embedded carbon data — not misunderstanding of the legislation itself, which is now sufficiently established to support a defined compliance programme.
SO WHAT: Organisations that have reviewed the legislation but have not yet translated it into internal governance structures, threshold monitoring, and supplier engagement programmes have completed the awareness phase of UK CBAM preparation but have not begun the compliance phase.
NOW WHAT: Compliance Managers must distinguish between legislative awareness and operational readiness — and must assess their organisation against both — before 1 January 2027.
Risk Heat Map | |||
Risk | Likelihood | Impact | Mitigation |
Incorrect legal entity identified as liable importer | Medium | High — wrong entity registered; actual liable person unregistered | Map all customs declarations to legal entity; legal review of group import structures |
Late registration (threshold met but not monitored) | Medium | High — compliance breach from threshold trigger date | Implement monthly import value monitoring; assign Finance ownership |
Incomplete embedded carbon data from suppliers | High | High — return inaccuracy; potential default value penalties | Begin supplier engagement programme immediately; establish data request templates |
Tax agent error in return submission | Medium | High — liability remains with importer | Implement data verification process before agent submission; retain all supporting records |
Missing records for 2027 imports | Medium | High — cannot substantiate return accuracy; audit exposure | Activate record-keeping from 1 January 2027; do not wait until return preparation begins |
Governance gap — no named CBAM compliance owner | High | Medium — fragmented implementation; missed deadlines | Appoint compliance owner and establish RACI framework before registration |
EU CBAM non-compliance (for dual-jurisdiction importers) | Already present if declarant status not obtained | High — EU imports non-compliant from 1 January 2026 | Apply for EU authorised declarant status through CBAM Registry immediately if not already done |
The risk with the highest combination of likelihood and impact — incomplete embedded carbon data from suppliers — also has the longest lead time to mitigate. Supplier engagement and data collection infrastructure cannot be built in the weeks before the first return. The organisations that will produce accurate first returns in May 2028 are those that initiated supplier engagement in 2026.
6. Sector-Specific Impact Analysis
The following sector analysis addresses how UK CBAM declarant and data obligations apply across the five in-scope sectors. Embedded carbon intensity figures by sector are not provided in this report because verified sector-average figures were not available in the research data. Sector-average embedded carbon intensity figures are subject to forthcoming HMRC guidance and sector body publications. Compliance Managers should reference those sources for sector-specific default values and emissions factors as they are published.
Sector-by-Sector UK CBAM Compliance Matrix | |||
Sector | UK CBAM Scope | EU CBAM Scope | Primary Declarant Challenge |
Steel / iron and steel | In scope from 1 Jan 2027 | In scope (definitive regime) | Multi-supplier supply chains; variable embedded carbon by production route |
Aluminium | In scope from 1 Jan 2027 | In scope (definitive regime) | Supplier verification; varying smelting energy mix |
Cement | In scope from 1 Jan 2027 | In scope (definitive regime) | Construction supply chain mapping; commodity code classification |
Fertilisers | In scope from 1 Jan 2027 | In scope (definitive regime) | Multi-jurisdiction sourcing; variable process emissions |
Hydrogen | In scope from 1 Jan 2027 | In scope (definitive regime) | Limited importer experience; production route complexity |
Electricity | Not in scope (UK launch) | In scope (EU definitive regime) | Scope divergence between UK and EU for multinationals |
6.1 Steel
FINDING: Steel and iron and steel products are within UK CBAM scope from 1 January 2027 and remain one of the largest affected sectors under both UK and EU regimes, with the importer of steel products carrying liability for the embedded carbon in all in-scope imported goods.
SO WHAT: Steel importers characteristically operate complex international supply chains involving multiple origins, intermediate processors, and product specifications — making embedded carbon documentation significantly more demanding than for goods imported from a single identified facility.
NOW WHAT: Steel importers must initiate formal supplier engagement programmes requesting embedded carbon data at the facility and production-route level before any in-scope steel imports arrive in the UK from 1 January 2027.
The declarant challenge in steel is compounded by the diversity of production routes. Blast furnace and basic oxygen steelmaking carry materially different embedded carbon intensities compared to electric arc furnace production — the embedded carbon figure is facility-specific and process-specific, not a commodity average. Production route differences are widely documented in industry and academic literature; importers should seek sector-body guidance for facility-specific factors. An importer sourcing from multiple mills in multiple countries will need separate emissions data for each supplier's production process.
Steel importers who also supply the EU market or buy from EU-directed supply chains must additionally manage the EU CBAM declarant obligation, which requires the authorised declarant to have obtained Registry status through the Member State CBAM authority.
6.2 Aluminium
FINDING: Aluminium imports are within UK CBAM scope from 1 January 2027, with the embedded carbon liability for aluminium varying depending on the energy mix of the smelting process — electrolytic smelting powered by coal-heavy grids carries substantially higher embedded carbon than smelting using hydroelectric or renewable sources.
SO WHAT: Aluminium importers sourcing from producers in high-carbon energy grid countries face materially higher CBAM charge exposure per tonne than importers sourcing from equivalent producers in low-carbon grid countries — making energy mix a commercially significant procurement variable from 2027 onwards.
NOW WHAT: Procurement functions must include embedded carbon and energy source data in supplier selection and contract renewal processes before 1 January 2027, treating CBAM exposure as a measurable procurement cost rather than an unquantified compliance overhead.
The embedded carbon differential between grid mixes can be substantial, making energy source a material procurement variable. Importers who cannot obtain verified facility-specific data will need to rely on default values published by HMRC. HMRC default embedded carbon values for aluminium, and the process by which importers may apply verified supplier data in preference to defaults, are subject to forthcoming guidance. Compliance Managers should monitor HMRC publications for the default value schedule ahead of the first return period. The financial cost of relying on a conservative default value — rather than verified lower figures from a cleaner production facility — may be significant over a full year of imports.
6.3 Cement
FINDING: Cement is within UK CBAM scope from 1 January 2027, and remains within EU CBAM scope in the definitive regime, with cement importers required to identify and document embedded carbon at the production facility level.
SO WHAT: Construction businesses importing specialist cement products and processed construction materials must undertake commodity code classification to confirm which specific products fall within the CBAM product scope before the first import in the 2027 accounting period.
NOW WHAT: Compliance and Procurement functions must map current and planned cement and cement-product imports against CBAM commodity codes before 1 January 2027, and must not assume all construction materials are either in scope or out of scope without a product-level classification review.
Cement importers frequently operate through construction supply chains where the importer of record is a distributor or specialist supplier rather than the end-construction-industry buyer. In such structures, the declarant governance obligation falls on the entity named on the customs declaration — which may be the distributor — not the ultimate construction-industry customer. Compliance Managers in construction supply chains must confirm which entity is the UK CBAM liable person.
6.4 Fertilisers
FINDING: Fertilisers are within UK CBAM scope from 1 January 2027, with importers responsible for embedded carbon declarations covering the production process emissions of nitrogen-based fertilisers and related products.
SO WHAT: Fertiliser importers frequently source from multiple international jurisdictions — including countries where environmental reporting standards are lower than those required for a UK CBAM return — meaning supplier data quality represents both a compliance risk and a potential financial risk if default values apply.
NOW WHAT: Procurement teams in agricultural inputs must establish supplier due diligence procedures requesting emissions process data from all current and prospective fertiliser suppliers before 1 January 2027, with escalation to Compliance where suppliers decline to provide data.
The fertiliser sector carries a specific production-process complexity. The Haber-Bosch synthesis process is widely characterised in industry and academic literature as the dominant source of embedded carbon in nitrogen-based fertilisers — process efficiency, not just energy grid mix, is the critical variable. Importers should confirm the embedded carbon methodology that applies to their specific products with HMRC guidance once published. Importers sourcing from producers using older, less efficient synthesis plants may face higher embedded carbon figures even where the production facility's energy grid is relatively clean.
6.5 Hydrogen
FINDING: Hydrogen is included in UK CBAM scope from 1 January 2027, covering a sector where commercial import volumes remain limited but where import activity is developing as the UK hydrogen market grows.
SO WHAT: Many organisations involved in early-stage hydrogen import activity will lack mature procurement governance processes for regulatory compliance, and the absence of established embedded carbon reporting norms in the hydrogen supply chain creates data availability risks that are more acute than in more established CBAM sectors.
NOW WHAT: Organisations planning hydrogen imports from 1 January 2027 must build UK CBAM declarant and record-keeping controls into procurement contracts and supply agreements from their inception — retrofitting these requirements to existing contracts is significantly more difficult than embedding them at the outset.
The embedded carbon calculation for hydrogen is production-route dependent. Green hydrogen (produced via electrolysis from renewable electricity) carries materially lower embedded carbon than blue hydrogen (steam methane reforming with carbon capture) or grey hydrogen (steam methane reforming without capture). These are established industry categorisations rather than regulatory designations; importers must confirm the production route of each imported hydrogen consignment and obtain the corresponding embedded carbon data from the producing facility.
6.6 Electricity
FINDING: Electricity is covered under EU CBAM in the definitive regime but is not within UK CBAM scope at launch on 1 January 2027, creating a product scope divergence between the two regimes that is operationally significant for organisations active in cross-border electricity trading.
SO WHAT: Organisations managing electricity cross-border flows between the UK and EU face EU CBAM obligations for electricity imports into the EU but no equivalent UK CBAM charge for electricity imports into the UK.
NOW WHAT: Compliance and Trading functions in organisations with electricity import exposure must maintain separate UK and EU product scope assessments, updating them whenever either regime issues revised guidance on electricity classification.
UK vs EU Product Scope — Electricity | ||
Dimension | UK CBAM | EU CBAM |
Electricity in scope | No — excluded at UK launch | Yes — covered in EU definitive regime |
Relevant guidance | HMRC Policy Summary, 9 Feb 2026 | EC CBAM Registry and Reporting guidance |
Compliance action | None required for electricity imports into UK | EU authorised declarant status required; embedded electricity emissions reported |
7. Practical Action Framework
7.1 Registration Workflow
FINDING: HMRC registration for UK CBAM is triggered by the £50,000 rolling threshold and completed through Government Gateway, with secondary legislation in force from 13 July 2026 providing the administrative framework within which organisations must structure their registration preparation.
SO WHAT: Organisations that have not yet begun registration preparation — including legal importer mapping, threshold monitoring, and Government Gateway credential confirmation — are behind the operational timeline for an orderly registration process before 1 January 2027.
NOW WHAT: Compliance Managers must assign a named registration owner within the Customs or Compliance function and complete the registration preparation steps below before the Government Gateway service opens in late 2026.
Registration Workflow — 12 Steps
Confirm in-scope goods. Review all current import commodity codes against the UK CBAM product scope. Identify which goods are within scope for steel, aluminium, cement, fertilisers, and hydrogen.
Identify the legal importer for each product category. For each in-scope import stream, confirm which legal entity is named on the customs declaration. Where multiple group entities import CBAM goods, identify each separately.
Assess the registration threshold. Calculate cumulative in-scope import values over the rolling 12-month period. Apply both the forward-looking and backward-looking tests as set out in Finance Act 2026, Schedule 17.
Determine registration obligation. Where the threshold is met or expected to be met, confirm the obligation to register. Where the threshold is below £50,000, document the assessment and schedule monthly review.
Confirm Government Gateway access. Ensure the registering legal entity has Government Gateway credentials. Where an entity has not previously used Government Gateway, initiate credential setup.
Prepare registration information. Gather the information HMRC will require at registration. "HMRC has not yet published the specific information required at the point of Government Gateway registration. This should be confirmed from HMRC guidance pages as the registration service opening date approaches.
Submit registration via Government Gateway. Complete registration through the HMRC Government Gateway service once it opens. The registering entity must be the legal importer.
Receive registration confirmation. Retain HMRC registration confirmation as part of the compliance record.
Notify appointed tax agent (if applicable). If a tax agent will submit returns on the importer's behalf, notify them of the registration and confirm the scope of their authority.
Activate record-keeping. From the date of first CBAM import — or from 1 January 2027 at the latest — begin retaining all records required for the first return.
Confirm supplier data collection is active. Verify that all suppliers of in-scope goods have been contacted with embedded carbon data requests.
Schedule registration review. Set a calendar review for 12 months after initial registration to confirm that registration remains accurate as import volumes and product scope evolve.
7.2 Declarant Decision Tree
FINDING: The importer — the entity named on the customs declaration under Finance Act 2026, section 146 — is the UK CBAM liable person, regardless of whether a tax agent submits the return, regardless of the commercial ownership of the goods, and regardless of which entity within a group procured or financed the import.
SO WHAT: Every organisation must work backwards from the customs declaration — not the commercial invoice, not the purchase order, and not the intercompany agreement — to identify the legal entity that carries UK CBAM liability.
NOW WHAT: Compliance Managers must document the declarant determination for each import stream in a format reviewable by auditors, by HMRC, and by the appointed tax agent, before registration begins.
Declarant Decision Framework — Key Questions | ||
Question | If Yes | If No / Unclear |
Does your organisation import goods in its own name? | Your organisation is the liable person | Identify who is named on the customs declaration |
Is the customs declaration made by a freight forwarder in their own name? | Freight forwarder may be the liable person — seek legal advice | Confirm whether forwarder acts as agent or principal |
Does a group subsidiary import goods on behalf of a parent? | Subsidiary is the liable person | Confirm the customs declaration entity |
Is a buying agent used who imports in their own name? | The UK CBAM treatment of buying agents who import in their own name has not been confirmed in published HMRC guidance. Organisations in this position should obtain specific legal advice before proceeding. | Seek specific legal advice; do not assume |
Does the same legal entity import in both UK and EU? | Separate registration required for each jurisdiction | Identify the entity making customs declarations in each jurisdiction |
The declarant determination is a legal question. Where the answer is uncertain — particularly in group structures or where agents are used — seek legal advice rather than making an assumption.
7.3 Internal Compliance Operating Model
FINDING: HMRC CBAM guidance confirmed as of 13 July 2026 defines importer liability and tax agent submission rights but does not specify how organisations should allocate the six functional responsibilities — Compliance, Customs, Finance, Procurement, Sustainability, and Senior Management — required for end-to-end UK CBAM compliance.
SO WHAT: A compliance operating model that is not formally documented, approved, and communicated to all relevant functions provides no assurance of consistent implementation — and in the event of an HMRC audit, the absence of a documented governance framework is itself a negative indicator.
NOW WHAT: Compliance Managers must present a formal CBAM governance framework for Senior Management approval before the Government Gateway registration service opens, naming accountable owners for each function and establishing escalation procedures for data gaps and threshold breaches.
The RACI matrix set out in Section 3.5 provides the functional governance framework. The Internal Compliance Operating Model extends it to specify the reporting and review cadence:
Monthly: Finance reports rolling 12-month CBAM import value to Compliance. Procurement reports outstanding supplier data requests.
Quarterly: Compliance reviews embedded carbon data completeness against 2027 import volumes. Sustainability reviews data quality. Any gaps escalated to Procurement for supplier follow-up.
Annually: Full-year data compiled for return preparation. Return reviewed by Finance and Compliance before submission. Tax agent provided with verified data package.
Ad hoc: Threshold breaches, supplier refusals to provide data, and regulatory guidance updates escalated to Compliance immediately.
7.4 Documentation Checklist
FINDING: Liable persons must begin retaining UK CBAM records from the point liability arises — which is from the date the £50,000 threshold is met, or from 1 January 2027 for organisations already above the threshold on commencement — not from the date the first return is prepared.
SO WHAT: An organisation that begins systematic record-keeping only in Q1 2028 when preparing the first return will be working retrospectively, without the contemporaneous documentation that gives a return its evidential foundation.
NOW WHAT: Compliance Managers must establish a centralised CBAM document repository — assigning ownership, access controls, and retention protocols — before 1 January 2027.
Compliance Documentation Checklist
Specific content requirements to be confirmed against the July 2026 secondary legislation and HMRC operational guidance.
Customs declaration copies for each in-scope import, including commodity codes, declared values, and country of origin
Import documentation confirming the legal entity on the customs declaration
Supplier embedded carbon data — by facility, by production route, by shipment where required
Supplier verification documentation or accreditation evidence
Communications with suppliers requesting embedded carbon data
Internal embedded carbon calculation records, including any default values applied
Government Gateway registration confirmation
Tax agent appointment documentation (if applicable)
Tax agent governance agreement defining scope of authority
CBAM return submissions and supporting calculation workbooks
Records of any HMRC correspondence
Internal threshold monitoring records (monthly)
Board and executive reporting on CBAM readiness
7.5 Board Readiness Framework
FINDING: UK CBAM is an enterprise-wide compliance obligation affecting Finance, Customs, Procurement, Sustainability, and Legal/Compliance — making it a Senior Management oversight responsibility, not a technical specialist function that can be managed below the executive level.
SO WHAT: Without executive visibility, UK CBAM implementation is at risk of receiving insufficient resource allocation, insufficient cross-functional authority, and insufficient escalation pathways when data or governance problems arise.
NOW WHAT: Compliance Managers must establish a Senior Management CBAM reporting framework — with at least quarterly executive reporting from now through 31 May 2028 — covering threshold status, registration status, supplier data coverage, and return preparation progress.
Board / Senior Management Readiness Dashboard — Recommended KPIs
KPI | Reporting Owner | Frequency |
Rolling 12-month CBAM import value vs £50,000 threshold | Finance | Monthly |
Registration status (not yet due / registered / overdue) | Compliance | As event occurs |
Supplier data coverage (% of import value with verified carbon data) | Procurement / Sustainability | Quarterly |
Outstanding supplier data requests by sector | Procurement | Quarterly |
EU CBAM authorised declarant status (for dual-jurisdiction importers) | Compliance | As event occurs |
First return preparation status (2028) | Finance / Compliance | From Q3 2027 |
Penalty or enforcement risk assessment | Compliance | Annually or as changes occur |
The Board Readiness Framework is an assurance mechanism, not a performance management tool. Senior Management is not being asked to manage compliance details, but to receive confirmation that the compliance programme is progressing against defined milestones and that resource is adequate.
7.6 First Return Preparation Roadmap
FINDING: The first UK CBAM return covers all in-scope imports from 1 January 2027 to 31 December 2027 and must be submitted with payment by 31 May 2028, giving compliance teams approximately 17 months from the regime's commencement date to accumulate data and complete the calculation.
SO WHAT: 17 months appears substantial, but the embedded carbon data for 12 months of imports must be collected, verified, and calculated across the full supply chain — a process entirely dependent on supplier cooperation that cannot be accelerated once returns are imminent.
NOW WHAT: Compliance Managers must treat the first return preparation roadmap below as a project plan with fixed milestones, assigning named owners and review dates to each phase.
Phase | Period | Key Tasks | Owner |
Phase 1 — Foundation | Now — Dec 2026 | Legal importer mapping; governance framework approval; threshold monitoring activation; supplier data requests initiated; Government Gateway registration | Compliance / Finance / Customs |
Phase 2 — Live Compliance | Jan — Jun 2027 | All imports tracked from 1 Jan 2027; embedded carbon data collected per shipment; supplier data gaps identified and escalated | Customs / Procurement / Sustainability |
Phase 3 — Data Verification | Jul — Dec 2027 | Full-year data compilation begun; supplier verification reviewed; default values assessed for gaps; embedded carbon calculations prepared | Sustainability / Finance / Compliance |
Phase 4 — Return Preparation | Jan — Apr 2028 | Full year 2027 data finalised; CBAM charge calculated; return prepared; tax agent provided with verified data; internal review and sign-off | Finance / Compliance |
Phase 5 — Submission | By 31 May 2028 | Return submitted via Government Gateway; payment made; submission confirmation retained | Finance / Compliance |
8. Strategic Outlook
8.1 Expected Regulatory Evolution
FINDING: HMRC's force-of-law notice published on 13 July 2026 confirmed UK CBAM will commence on 1 January 2027, but the regime's administrative detail — including registration mechanics, penalty specifics, and sector-level default carbon values — is still being developed through secondary legislation and operational guidance.
SO WHAT: Compliance programmes that treat the July 2026 legislation as a complete and final framework risk being built on an incomplete specification — further HMRC guidance notices, technical notices, and potentially additional secondary legislation instruments are expected before commencement.
NOW WHAT: Compliance Managers must establish a regulatory monitoring process — assigning responsibility for reviewing HMRC CBAM guidance pages and GOV.UK publications regularly — to ensure implementation programmes are updated as new guidance is issued before 1 January 2027.
The areas most likely to receive further HMRC operational guidance before commencement include: the registration service opening and information requirements for registration; sector-specific default carbon values for embedded emissions calculations; the precise scope of record-keeping obligations; and any transitional arrangements for the first reporting period.
Compliance teams should not wait for final guidance on these points before beginning implementation — the core obligations of registration, liable importer identification, and record-keeping are established by the Finance Act 2026 and the July 2026 secondary legislation. Further guidance will refine the detail rather than alter the structure.
8.2 UK–EU Convergence
FINDING: The UK and EU CBAM regimes pursue the same policy objective — prevention of carbon leakage for covered sectors — but differ in their implementation models, with the UK using a customs-declaration liability model without pre-authorisation and the EU requiring Registry-based authorised CBAM declarant status before import.
SO WHAT: Policy objective convergence does not mean administrative convergence — organisations cannot apply a single declarant framework, registration process, or governance model across both jurisdictions, and must maintain separate compliance programmes for each.
NOW WHAT: Compliance Managers in multinational organisations must monitor GOV.UK and EC publications for any formal regulatory dialogue on CBAM administrative alignment, and must design UK and EU compliance programmes on the assumption of continued structural divergence unless and until formal convergence is announced.
The EU definitive regime has been operational since 1 January 2026; the UK regime commences 1 January 2027. The one-year gap between the two commencement dates has given UK importers additional preparation time but has also created a period in which EU obligations are already running while UK preparations are still in progress. Compliance teams managing both regimes must ensure EU obligations — which are already live and include the first annual declaration deadline of 31 May 2027 — are not deprioritised relative to UK preparation.
No confirmed formal convergence between the UK and EU regimes has been identified in the research data available for this report. Compliance programmes should be built for continued structural divergence. Any future convergence — whether through mutual recognition, administrative alignment, or treaty arrangement — would require formal legislative action in both jurisdictions and would be subject to its own transition arrangements.
8.3 Preparing Beyond 2027
FINDING: The first UK CBAM return covers the full calendar year 2027, with a deadline of 31 May 2028, establishing the first annual compliance cycle; the Finance Act 2026 and secondary legislation create a continuing obligation rather than a one-off filing exercise, though the mechanics of subsequent return periods should be confirmed against the July 2026 secondary legislation.
SO WHAT: Organisations that treat UK CBAM as a 2027 implementation project will find themselves rebuilding the compliance programme annually; organisations that build UK CBAM into their permanent compliance architecture will manage it at significantly lower recurring cost and risk.
NOW WHAT: Compliance Managers must ensure the governance framework, supplier data collection systems, threshold monitoring process, and return preparation workflow established for the first return are designed to operate on a recurring basis — with the compliance calendar reviewed and updated annually — and must present this design to Senior Management for approval as a standing compliance programme before 31 May 2028.
The most immediate action a well-prepared organisation can take beyond 2027 is to embed UK CBAM data requirements into its supplier contract templates. Contracts renewed from 2026 onwards should require the supplier to provide embedded carbon data in a format compatible with UK CBAM return requirements. This converts the annual data collection exercise from a reactive outreach process into a contractual obligation — and creates a documented evidentiary trail for every return. Compliance Managers must initiate this contract review before supplier renewals fall due.
9. Frequently Asked Questions
Who is legally responsible for submitting UK CBAM returns?
The importer is legally responsible under Finance Act 2026, section 146 — the entity in whose name the customs declaration is made, or on whose behalf the goods are imported. This liability does not transfer to a tax agent who submits the return on the importer's behalf. Delegating submission is an administrative arrangement only; the legal and financial consequences of any error remain with the importer.
Can a customs broker or tax agent submit a UK CBAM return on my behalf?
A tax agent can submit UK CBAM returns on behalf of the liable importer, as confirmed in HMRC's policy summary of 9 February 2026. The tax agent cannot register for UK CBAM and bears no legal liability for the accuracy or timeliness of the return. Whether customs brokers and freight forwarders may act as tax agents is not confirmed in current published HMRC guidance and should be verified against the July 2026 secondary legislation before compliance arrangements are finalised.
When do I need to register for UK CBAM with HMRC?
Registration is required once cumulative imports of in-scope CBAM goods exceed £50,000 on a rolling 12-month basis, under Finance Act 2026, Schedule 17. Both a forward-looking test and a backward-looking test apply; the precise time period for the forward-looking test should be verified against Schedule 17 and the July 2026 secondary legislation. Registration is completed through Government Gateway, which HMRC is expected to open for UK CBAM registration in late 2026.
How do the UK importer rules differ from the EU authorised CBAM declarant model?
Under UK CBAM, liability attaches to the importer by virtue of the customs declaration — there is no pre-authorisation requirement before importing covered goods. Under the EU definitive regime, operational from 1 January 2026, importers and indirect customs representatives must obtain authorised CBAM declarant status through the CBAM Registry in their Member State of establishment before importing. The two regimes require separate registration processes and cannot be managed through a single compliance model.
What records should I keep before my first UK CBAM return?
Liable persons must retain records from the point liability arises — for most organisations, from 1 January 2027. Records must include customs declarations for each in-scope import, embedded carbon data from overseas suppliers, country of origin documentation, and evidence supporting the accuracy of embedded carbon figures. Where verified supplier data is unavailable, records must document the basis on which any default values have been applied, if default values are published by HMRC. The specific retention period has not been confirmed in published HMRC guidance available at the time of this report.
What happens if the wrong legal entity registers or files the return?
If a legal entity that is not the liable importer registers for UK CBAM, the actual liable importer remains unregistered — creating a compliance breach from the point the registration threshold was met. A return submitted by a party that is not the liable person, or by a tax agent without proper authorisation, may not satisfy the filing obligation of the liable importer. The penalty framework established by Schedule 17 and the July 2026 secondary legislation applies to registration failures and incorrect returns; specific penalty amounts by category have not been fully published at the time of this report. Resolve any uncertainty about the liable importer through legal review before registration, not after.
Legal Disclaimer
This report is published by CBAM Journal, an intelligence publication of Sekason Research Limited, for informational and research purposes only. While every effort has been made to ensure the accuracy of the information at the time of publication, the content does not constitute legal, tax, accounting, customs, or professional advice and should not be relied upon as such. Regulatory requirements, official guidance, and administrative procedures may change after publication. Readers should consult the relevant legislation, official government guidance, and qualified professional advisers before making compliance or commercial decisions. Neither CBAM Journal nor Sekason Research Limited accepts any liability for any loss or damage arising from the use of, or reliance on, the information contained in this report.
10. References and Sources
UK Primary Legislation
Finance Act 2026, Part 5 (sections 143–149) — Carbon Border Adjustment MechanismLegislation.gov.uk | 17 March 2026https://www.legislation.gov.uk/ukpga/2026/11/part/5/enacted
Finance Act 2026 — Full Act (PDF)Legislation.gov.uk | 17 March 2026https://www.legislation.gov.uk/ukpga/2026/11/pdfs/ukpga_20260011_en.pdf
UK Secondary Legislation
The Carbon Border Adjustment Mechanism (Administrative Provisions) Regulations 2026HMRC / legislation.gov.uk | July 2026https://assets.publishing.service.gov.uk/media/698b033b8492b54795c1be1a/The_Carbon_Border_Adjustment_Mechanism__Administrative_Provisions__Regulations_2026__Draft_.pdf
The Carbon Border Adjustment Mechanism (Calculation of CBAM Rate and Determination of Carbon Price Relief) Regulations 2026Legislation.gov.uk | July 2026https://www.legislation.gov.uk/uksi/2026/809/contents/made/data.html
HMRC Guidance
Carbon Border Adjustment Mechanism — HMRC Collections PageGOV.UK | Published 10 February 2026https://www.gov.uk/government/collections/carbon-border-adjustment-mechanism
Draft Regulations: Carbon Border Adjustment Mechanism (CBAM) — Technical ConsultationGOV.UK | 10 February 2026https://www.gov.uk/government/consultations/draft-regulations-carbon-border-adjustment-mechanism-cbam
Draft Regulations: Carbon Border Adjustment Mechanism (CBAM) — Emissions and VerificationGOV.UK | 9 April 2026https://www.gov.uk/government/consultations/draft-regulations-carbon-border-adjustment-mechanism-cbam-emissions-and-verification
European Commission — EU CBAM
Carbon Border Adjustment Mechanism — EC Main PortalEuropean Commission, DG TAXUDhttps://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en
CBAM Registry and ReportingEuropean Commission, DG TAXUD | Updated 31 March 2025https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en
EU CBAM — Guidance for UK ExportersDepartment for Business and Trade | GOV.UKhttps://www.business.gov.uk/campaign/europe/european-union-eu-regulations/eu-carbon-border-adjustment-mechanism-eu-cbam/
EUR-Lex
Regulation (EU) 2023/956 — Establishing a Carbon Border Adjustment MechanismEuropean Parliament and Council | 10 May 2023https://eur-lex.europa.eu/eli/reg/2023/956/oj/eng
Commission Implementing Regulation (EU) 2024/3210 — CBAM Registry RulesEuropean Commission | 18 December 2024https://eur-lex.europa.eu/eli/reg_impl/2024/3210/oj/eng
Further Reading
Carbon Border Adjustment Mechanism — House of Commons Library Research Briefing (CBP-9935)UK Parliament | Updated July 2026https://commonslibrary.parliament.uk/research-briefings/cbp-9935/
Introduction of a UK CBAM — Government Response to Policy Design ConsultationHM Treasury / HMRC | 30 October 2024https://assets.publishing.service.gov.uk/media/672a00dfabb279b2de1e8b8a/_Updated__4038_-_Introduction_of_a_UK_Carbon_Border_Adjustment_Mechanism_from_January_2027_-_Government_response_to_the_policy_design_consultation.pdf
One note: The HMRC Policy Summary (9 February 2026) and the force-of-law notice (13 July 2026) are referenced throughout this report. Both sit within the HMRC Collections page above. If HMRC publishes standalone URLs for these documents before you go live, insert them under the HMRC Guidance section above in place of the collections page link.
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