When goods are imported into the UK from a place outside the EU it will be subject to both Customs Duty and VAT. Unless there is some form of relief or duty suspension the VAT and duty are payable on import. Where there is no payment the goods will not be released by HMRC. After Brexit goods imported from the EU may also be subject to the same duty regime; this will depend upon the terms of the negotiations with the EU. It is, however, important to be aware of the reliefs that are available.
The most significant relief is VAT and duty deferment. This allows the VAT and duty payable to be deferred. The duty will be taken from the importers bank account in the middle of the following month. The VAT due will be payable on the importers next VAT return and this VAT can be reclaimed according to the normal VAT rules. Details of duty deferment can be obtained in Notice 101 and from HMRC by emailing them at [email protected].
Duty payable can be reduced by claiming a preference. This allows come goods to be subject to a reduced rate of duty depending on where they originate from. This is usually to help promote development in developing countries. Other duty relief schemes include:
temporary admission – goods that are imported for a specific use for a limited period (such as exhibitions and conferences). No duty is payable on import, but the goods must be exported at the end of their use
inward processing – goods imported for processing in the EU, and then re-exported after processing. The relief is that no duty is payable on the goods imported for processing and export
outward processing relief – this reduces the duty payable on goods that have been imported into the EU, if they have been previously been exported from the EU for processing. The duty payable is the duty that would be due on the imported goods, less the duty that would be payable on the exported unprocessed goods as if they had been imported
warehousing – goods can be stored duty and VAT free in an approved customs or VAT warehouse. Duty is payable when the goods move into free circulation within the EU
community system of duty relief – certain goods that promote culture and science can be imported duty free
duty suspensions or quota goods – some goods are subject to reduced or nil duty until a quota of imports is reached
returned goods relief – exported goods that are re-imported are free of duty
end-use relief – some goods are relieved of duty where they end up in certain specified products (such as aircraft or in the space industry).
In each of these cases imports are to be from countries outside the EU and exports are to countries outside the EU as Customs Duty is (currently) an EU levy. As a general rule the application for the relief must be made before the import or export occurs. Furthermore, the record-keeping requirements are strict, failure to keep the appropriate records will mean duty, and perhaps penalties, will be applied. More information on these reliefs can be obtained from HMRC’s helpline: 0300 200 3700.
