There have been a number of significant developments to Inward Processing Relief (IPR) recently that impacts businesses ability for claiming duty relief.
How IPR works
IPR relieves customs duty on materials or components imported in to the EU, processed and subsequently exported outside of the EU or put to another qualifying regime.
Processing in this context has a wide meaning from simplified processes such as repackaging to complex manufacturing operations.
Importers wishing to obtain the benefits of IPR agree to satisfy additional regulatory obligations and failures in meeting these responsibilities can result in loss of relief and penalties.
Importers must be authorised to use IPR. Authorisation can be applied for using the import declaration prepared by your agents (simplified authorisation) or by making a formal application using customs form C&E810.
There are currently two types of IPR:
- IPR Suspension whereby the import duty and import VAT are suspended and do not become payable provided the conditions of IPR are met.
- IPR Drawback whereby import duty and import VAT are paid at time of import but the duty is reclaimed if the conditions of IPR are met
Importers must be able to prove the imported components or materials were exported within a specific time limit and make the necessary returns or reclaims to HMRC.
The Regulations include various provisions to simplify administration and extend the scope of duty relief. Time taken in setting up the most appropriate configuration should reduce the risks of non-compliance and improve any Return in Investment.
Key developments to IPR include:
- HMRC seeking to reduced the time limits granted in any authorisation from importing to exporting (through-put)
- A crack down on failures to submit Bills of Discharge for simplified IPR so that failure to get the necessary documents back to HMRC in Enniskillen result in the duty being collected
- HMRC had Intended removal of standard IPR Drawback from 1 July 2013 (Simplified IPR Drawback has already been abolished). HMRC has just announced that it will be writing to IPR Drawback authorised importers informing them that all authorisations will now be extended to 31/12/2014. If there is a continued delay to the implementation of the new Customs Code (known as the UCC) then HMRC will consider further extending IPR Drawback authorisations.
- Merger of IPR with other duty reliefs under the new Uniform Customs Code
- Relaxations on the need to have the correct Customs Procedure Code on export declarations following European Court of Justice case of Terex
- Client feedback is highlighting greater scrutiny of compliance of authorised traders both in operating their IPR authorisations and any renewal applications
- Change of Bill of Discharge forms for simplified IPR and the ability to complete these online
How We Can Help
IPR still provides importers with considerable potential duty savings, making it one of the most commonly used duty reliefs.
ITS helps its clients realise these savings while minimising compliance risks and administration costs. We offer the following services:
- Making the IPR application and providing the importer with a set of tools to operate IPR in-house
- Submission of retrospective applications and building the necessary retrospective reclaim
- Reviewing IPR operations to highlight compliance risks and solutions plus opportunities to extend any potential savings
- A service to manage your IPR including instructions to agents, maintaining IPR accounts and making the necessary returns or reclaims on your behalf
If you would like to discuss how we can best help you in this area then please either e-mail me at firstname.lastname@example.org or call 01905 619229.