Customs and VAT Relief on Temporary Imports in the UK

May 4, 2022

As the UK has left the EU Customs Union and the VAT system, companies moving between the UK and the EU can apply to have import VAT and customs duties delayed in cases of temporary imports. Imports are considered temporary when goods are brought into the country for processing or repairs and then sent away from the country (onward supply). This is called the Inward Processing Relief (IPR).

Since 1 January 2022, companies can also apply for reduced VAT and customs fees when the goods are retained. However, if the items are reprocessed, the import taxes apply.

Companies can use three main application procedures to use the inward processing relief.

 

Full authorisation

A full authorisation is suitable for companies that use inward processing on a regular basis. It allows for simpler declaration clearance procedures on imports and exports. It is also applicable to companies that import non-commercial items and are established outside the UK. Please keep in mind that a full authorisation application can take up to a month, so you should plan this step in advance in order to ensure the inward processing relief.

 

Retrospective authorisation

IPR can also be accessed via a retrospective authorisation. If a company has already exported the items, it can submit the records that are not 12 months (3 months for sensitive items) and apply for a retrospective IPR. In such a case, proof of eligibility and a list of imports must be submitted.

 

Declaration-by-declaration

IPR authorisation can be granted via the customs declaration at the border. This type of relief is applicable no more than three times a year and for goods below £500,000 (per import).

However, IPR at the customs can only be used if a non-simplified customs declaration is filled. This authorisation cannot be applied when a company is asking for a retrospective IPR or imports goods with anti-dumping duty. It is also not allowed to use this IPR if the imports are arms, chemicals and catalysts, art, meat for airline meals, etc.

 

Applying for IPR

Companies based in the UK and EU can apply for the relief, but non-residents can also apply in some cases.

Here are the details that must be processed to receive the relief:

  • Value of the goods in free circulation;
  • Items‘ commodity code;
  • The volume of goods to be processed;
  • Way and duration of processing goods;
  • Number of products made and the rate of yield;
  • Type of records and their archive;
  • Inward processing destination;
  • Details of subcontractors and other parties processing the goods.
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