Many companies that import goods into the UK are unaware that they can reduce the cost of Customs Duty.

Unlike VAT, which is normally fully or partially recoverable, Customs Duty represents an additional cost. The following notes highlight ways of reducing or removing the cost of Duty.

• If costs associated with an import are itemised separately some costs can be excluded, consequently the Duty charged is reduced.
  
• Costs such as licence fees, buying commissions, and transport costs for goods that are transported within the EC after their initial entry can all be ignored if itemised separately.

Furthermore, goods that are consequently removed from the EC can benefit from Inward Processing Relief (IPR) to remove the cost of Duty. IPR can involve Drawback, where the duty is paid up-front and recovered once the goods leave the EC, or Suspension, where the Duty is never paid, as long as the goods leave the EC within specified time limits.

Another opportunity is the use of warehouse arrangements which provides a cash flow benefit as the Duty cost is postponed until the goods are actually removed into free circulation. With rates of Duty generally decreasing an actual saving benefit can possibly be obtained. However, consideration should be given to the costs associated with warehousing arrangements.

To download as a pdf click here

We would be delighted to discuss your importation procedures and whether your business could reduce or remove the cost of duty. 

If you would like more information on this please contact our VAT partner Scott Craig in the first instance. Please feel free to contact the Scott Moncrieff VAT Team if you would like to discuss this or any other VAT issues:

Edinburgh 
Scott Craig:scott.craig@scott-moncrieff.com
Alan Glen: alan.glen@scott-moncrieff.com
Iain Masterton: iain.masterton@scott-moncrieff.com
Tel: 0131 473 3500

Glasgow 
Greg McNally: greg.mcnally@scott-moncrieff.com
Anthony Cochrane: anthony.cochrane@scott-moncrieff.com
Tel: 0141 567 4500