Can I reclaim import duty on re-export out of EU

Question

Hello,

We have bought pumps from Japan to be consolidated in a 20ft in the UK with other goods and be exported together to the Central African Republic.
We tried to import them under simplified IPR (which was never a problem before), but HMRC rejected our application as we do not have a Deferment and Guarantee account with them. So we ended up paying the duty and VAT.
Whilst we can reclaim the VAT with our VAT return, we do not know if we can reclaim the duty, too. As far as I can see on the HMRC website, one can only reclaim the duty if the goods are returned to the supplier outside the EU and not if they are re-exported outside the EU. I find this a bit strange and nonsensical and for this, I ask for your kind advice.

Thanks in advance,
Tibi

Answer

Hi there,

I hope you get an answer to your question shortly.

In the meantime, I recommend also looking at the Institute of Export and International Trade’s helpdesk for more specific advice:

http://www.export.org.uk/page/Export_Helpline

Answer

Hi Tibi,

I have asked our customs consultant for some help with this.  I think it might be related to recent changes to IPR (now just IP).

I’ll update the post if I get an answer.

Thanks. Ian.

 

Answer

Hi Tibi,

Further feedback from our IP advisor:

As far as Inward Processing (IP) is concerned it allows businesses to obtain relief from customs duties and import VAT on goods that are imported from outside the EU to be processed and exported outside the EU, there are conditions to be met but it is not a requirement that the goods are returned to the original supplier.  The 1st line of the query appears to be incomplete, ‘consolidated into a 20ft ?’  As we’re talking IP, I presume by consolidated they mean that the Japanese pump is integrated into another product, and not simply shipped on as part of a consolidated load, the latter would not qualify for IP.

The rules around Simplified Procedures (including IP) have changed under the Union Customs Code, both for authorisation holders and those using ‘Simplified IP’ now renamed Authorisation by Declaration.

Under the old Simplified system goods could be imported/exported without authorisation and without a guarantee, HMRC advised businesses against using this system too frequently as it may eventually be refused, however in reality they did not police the system strictly and allowed multiple simplified declarations.  They now allow only 3 entries per year under Authorisation by Declaration and a guarantee must be in place to cover the potential debt involved.

There are 2 options open for this business;

  • if they only make up to 3 IP declarations a year they can put a guarantee/deferment account in place and continue using Authorisation by Declaration
  • More than 3 declarations a year they can apply for IP authorisation and put a guarantee in place

Here is a link to the options for putting a guarantee/Deferment Account in place;

https://www.gov.uk/guidance/import-and-export-customs-comprehensive-guarantees-ccgs

https://www.gov.uk/government/publications/notice-101-deferring-duty-vat-and-other-charges/notice-101-deferring-duty-vat-and-other-charges

Here is a link to Notice 3001 including IP guidance

https://www.gov.uk/government/publications/notice-3001-special-procedures-for-the-union-customs-code

I hope this helps, come back to me if you need anything further.

It may be of interest that we have a IP module without out export software to manage your stock, re-exportation and HMRC documentation.

Ian.

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