60 Second Guide to Customs Duty Relief

17 January 2013

  • The customs code set out various schemes open to businesses to relieve them from having to pay customs duty and sometimes import VAT
  • Common relief schemes include:
    • Inward Processing Relief (IPR) where goods are imported, processed and subsequently exported outside of the EU
    • Outward Processing Relief (OPR) where imports include EU sourced components or materials
    • End Use Relief (EUR) where goods are put to a specific end use. Examples include components for ships, aircraft, the manufacture of cars (applications can be made for new end uses)
    • Temporary Import Relief (TIR) for goods temporarily imported and then re-exported (leased goods, for testing, for trade shows etc.)
    • Processing under Customs Control (PCC) where the duty rate of components or materials are greater than those of the finished goods (common in food, drink, pharmaceuticals and some engineering sectors)
    • Sample Relief for samples that will not then be sold
    • Onward Supply Relief (OSR) to relieve VAT on goods imported for onward sale to businesses in another Member State of the EU
  • Most schemes require the business to hold an authorisation. The application process involves:
    • Identifying the conditions to be met and gathering supporting evidence
    • Identifying whether there are specific options and elections that could simplify the work involved in operating the scheme or further increase the amount of relief available
    • Setting out a process for meeting any obligations under the scheme
    • Completing the application form
    • Meeting with HMRC to go through the application
  • It may be possible to gain retrospective authorisation for a relief scheme going back up to 12 months. It will be necessary to provide arguments to support this request and, if granted, the business will have to regularise any affected imports and exports
  • The business will take on additional work and risks when operating a duty relief scheme. These need to be understood and managed
  • Businesses should ensure a robust business case is worked through to identify the potential benefits, set up costs and ongoing costs
  • Errors can result in the duty relief being clawed back by the authorities for up to three years
  • International Trade Solutions works with our clients to:
    • Identify whether any relief schemes apply
    • Quantify the benefit and costs of implementing and operating any schemes
    • Obtaining appropriate authorisations, including applying for options that maximise any savings and minimise administration and compliance risks
    • Set up robust procedures to meet any additional customs obligations, including necessary management and control processes
    • Carry out periodic inspections to ensure procedures are being followed and any developments (business or regulatory) are taken into account
  • International Trade Solutions now offers a bureau facility so our clients can outsource the operating of any duty relief schemes to us, further minimising risks and locking down costs

If you would like further information of any of the duty relief schemes mentioned above or to explore how we can help you identify and implement any scheme then contact us on 01905 619229 or mail@internationaltradesolutions.co.uk

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