In the event duty is applicable when goods enter the UK in addition to when the goods are exported to EU Member States, there are a number of duty saving strategies businesses should consider, ranging from short term measures to long terms solutions. These include;
- Simplified Inward Processing – This is a short term measure whereby goods are imported into the UK before being processed or repaired, before being exported again. Businesses do not need to notify HMRC of their intention to use Simplified Inward Processing as it is authorised by declaration, however this can be utilised a maximum of three times. If IP drawback is applied, import VAT is paid at the time of entry however the payment of import VAT can be suspended using IP suspension however this becomes due if the goods are released into free circulation in the UK. In using this customs procedure, duty due is taken as a deposit and can be recovered on exporting the goods outside the UK.
- Inward Processing Authorisation – In order to use Inward Processing on a regular basis, business will need to apply for authorisation which can take a number of weeks. This operates in the same manner as Simplified IP, however there is no limit to the number of times it can be utilised.
- Customs Warehousing – This is a long-term solution for businesses seeking to avoid the application of double duty. When operated, customs warehousing allows for the payment of VAT & duties arising from the import of goods to be suspended when stored in authorised premises, with these values only becoming due when the goods are removed. Applying for customs warehousing is an involved process and authorisation can take 60 days to obtain. If your business decides operating a customs warehouse would be beneficial, Inward Processing can be used until your application is approved.
If, on considering the rules of origin, you believe duty will be due on your goods and you wish to enquire as to the benefits and practicalities of operating the customs procedures outlined above, please contact one of our expert consultants on our free VAT helpline today.
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