A recent Tribunal case seems to support a new restricted interpretation of end-use that could leave those businesses benefiting from the regime at risk.
The tribunal considered whether goods imported under end use could be processed before being put to the necessary end use. The tribunal found that processing could not take place under the end use regime and that businesses would need to implement Processing under Customs Control (PCC) together with end use relief or cease to qualify for the duty relief.
This matter came to light when the importer sought to re-apply for end-use and indicates a change in approach from HMRC.
A freedom of information request indicates that there are 955 end use authorisations, 43 PCC authorisations and only 7 combined PPC/End Use authorisations. It is likely that a considerable number of existing importers using end use will be subject to review and may lose ongoing entitlement. It will be interesting to see whether HMRC seeks to recover duties saved under end use going back three years when the importer is processing the imported goods.
Neither the tribunal nor HMRC seem to appreciate the complexity and cost involved in establishing and maintaining PCC. We have worked with a number of businesses to effectively implement PCC, minimising administration while maximising any duty savings. However, this usually represents a significant investment for the business, which may explain why there are only 43 authorisations in operation.
If you are currently using end use and think you may be affected by this risk then please contact us for further details.