Inward Processing Relief (IPR) Changes

02 May 2014

Inward Processing Relief (IPR) Changes

HMRC has issued a number of key Customs Information Papers (CIP) relating to IPR over recent months. Key documents include:

  • CIP (14)29 – The new Bill of Discharge (IPR Suspension Return) and the i-Form;
  • CIP (14)18 – The requirements for dealing with INF5 and associated C&E810 when using Prior Export Equivalence;

HMRC has published a new IPR Public Notice which sets out their interpretation of the IPR rules. Businesses are experiencing increased difficulties in benefiting from this relief even though exporting is being championed at governmental level. The key difficulties experienced include:

  • Meeting the time limits from import to export set out in IPR authorisations due to HMRC policy to keep this period to a minimum;
  • Submission of the necessary IPR Suspension returns;
  • The removal of simplified IPR Drawback;
  • Getting the correct information on the customs import and export declarations;
  • establishing and maintaining an audit trail from import to export, including determining rates of yield etc.;
  • Getting proof of export, especially if selling ex works.

We are seeing an increase in instances where HMRC is challenging businesses claims for IPR in the above instances. There is European Court of Justice case law in support of claiming relief in some of these instances and we recommend you contact us if any claim is challenged.

We are working with our clients to review their IPR authorisations to ensure they are set up correctly to ensure maximum benefit and minimal risk of compliance failure. Electing appropriate options can have a significant impact on the amount of relief that can be claimed and simplify the operation of this relief.

The new customs code will come in to effect in 2016. This regulation will merge the current IPR schemes with some other reliefs such as Processing under Customs Control (PCC). The new regime may have some advantages but we understand all current IPR authorisations will be subject to review and a renewal process.

Also, it is likely that businesses operating IPR will need to provide a guarantee for any customs duty suspended on goods within the relief unless that business applies for and gains Authorised Economic Operator (AEO) status. Gaining this status will require a significant investment of time in documenting processes and introducing additional checks and controls.
If you would like to discuss any of the above changes or arrange for a review of your current IPR processes then please contact us.

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