Issues with a temporary export to India

25 January 2018

My company is having a photographer travel to India for several photoshoots and he will have to take quite a lot of equipment (cameras, lamps, etc) with him. He had heard that he needed to temporarily import the equipment, but couldn’t get proper advice. I’ve done some checking online because this is outside the scope of our usual daily business. It looks like he needs an ATA Carnet for his equipment, is that correct? Can you confirm if there are any specific requirements for this between the UK and India, or at import into India? What exactly does he need to do to get his equipment in and out of the country without facing any issues?

Goods from our warehouse have arrived damaged at customer’s premises — what must we do?

18 January 2018

I have an issue where a customer has collected some goods from our warehouse and they have arrived at their premises in Switzerland damaged. The supply was under FCA (free carrier) our premises (Incoterms 2010) and the customer nominated the freight forwarder for the export. Our customer is requesting photographic evidence that the goods were in a good state before they left as they believe the damage occurred before it was loaded on to the forwarder’s vehicle. We don’t have any photographic evidence but the freight company did sign for the goods. Can you please advise where we stand.

Is becoming an Authorised Economic Operator the best option for me?

18 January 2018

I run a small engineering business — one of our main business streams is as a repair centre for electronic equipment bought from a number of different companies within the EU. We contract with an original equipment manufacturer (OEM) as a repair centre and goods come into us from countries both in the EU and outside. We use Inward Processing (IP) relief as we are never the original exporter, so to use any other procedure, such as Returned Goods Relief (RGR), is not feasible. Our IP authorisation expires in June 2018 and we are concerned about the new Union Customs Code (UCC) application process for IP. We understand we need a bank guarantee but, as a small business, this is not as easy as it might sound and it will seriously impact our loan facility. We don’t even have a deferment account and if duty/VAT needs to be paid we use the freight forwarders’ facilities. At a recent Chamber of Commerce event it was suggested that if we can become an Authorised Economic Operator (AEO) we will get a 100% waiver from having to set up this guarantee. I’ve looked at the application form and the self-assessment questionnaire (SAQ) and it looks very challenging. Do you think becoming an AEO is the best way to approach the situation? We are concerned about this business stream, especially as it will be impacted if the UK leaves the EU without a deal and all the goods currently coming in from EU countries for repair will be subject to customs duty and VAT.

Can I use OPR or IPR to manage the import of palladium chloride from a sister company based in the USA?

11 January 2018

We are looking to import palladium chloride from a sister company based in the USA. It is approximately 70% palladium — so the cost of duty would be large. We will supply the palladium metal to our sister company, which we import from another country and for which there is usually no duty, and the American company will convert it to palladium chloride and ship this back to us. I believe we can use Outward Processing Relief (OPR) or Inward Processing Relief (IPR) to manage this — but I have no idea how to manage that process. The majority of the value is in the palladium, so I would expect that we would not pay duty on that portion of costs when it is returned after processing.

Overseas customer wants me to put an incorrect commodity code on our invoice — what should I do?

10 January 2018

We have been asked by a customer in Kenya to put a different commodity code on our export invoice than the goods it is referring to. I have checked the code and it would mean a duty rate of 8% being applied by Kenyan customs instead of the 25% applicable to the actual code. I know I can’t do this, but our freight company said that as UK customs won’t look at the export invoice and as long as we declare the correct number on the export customs declaration there won’t be a problem. This doesn’t sound right to me but our sales manager wants me to “assist” the customer. Can you please advise?

“Special case” conditions for discharge from the Inward Processing (IP) relief procedure

8 January 2018

Could you advise if the below scenarios would meet with “special case” conditions for discharge from the IP relief procedure.

One of our facilities imports a material and manufactures “packers” from it — these “packers” are only used in the manufacture of a specific military aircraft; once manufactured they need to go into stock for a period of time. Could the goods be discharged from IP once manufacture is complete although not exported/transferred? The majority of these parts go to a military aircraft manufacturer in the UK though some go to manufacturers outside the EU.

Another facility repairs goods that are only used in commercial aircraft — once the goods are repaired the facility issues an airworthiness certificate. Could these goods be discharged from IP once the repair is complete although not exported?

Payment of VAT and duty — how is it applied to the C79 VAT Certificate when using IP suspension?

8 January 2018

My query relates to the payment of VAT and duty and how it is applied to the C79 VAT Certificate when using Inward Processing (IP) suspension.

A few months ago, we prepared our quarterly IP suspension return with the associated C88’s custom declaration forms for goods we wanted to change from IP to “Home Use”, ie paying the duty/VAT. We submitted this to HM Revenue & Customs (HMRC) and a couple of weeks later received three payment requests for the duty and VAT owed to HMRC to be paid immediately by BACS or cheque as our deferment account had insufficient funds available. We have never had to do this before, as we have always paid duty and VAT on IP entries against our deferment account and then reclaimed the VAT when the amounts appear on the C79.

We paid the requests in full. After seven months nothing relating to these payments had appeared on our C79, so we decided to claim the VAT back as it was a lot of money, nearly £200,000. The claim was rejected even though we provided all the information regarding the payment requests from HMRC, the IP details and payment details, etc. However, a suspended fine for “careless behaviour” was issued against us.

I need to know how and why the duty and VAT we paid in full did not make it on to the C79 quickly — what HMRC’s process is and how to stop it happening again as I have more requests this month from HMRC to pay duty and VAT by BACS as our deferment account is again at its limit and we need to pay another fine.

Also, can I contest the penalty — is it worth challenging? Interestingly, apparently the VAT will be on our C79 next month.

How long does it take for Approved Exporter Status to be issued?

2 January 2018

Do you have an idea of the current length of time HMRC takes to issue Approved Exporter Status (AES) applications assuming that there are no supplementary questions raised by HMRC? I can’t see any guidance to timescales on the GOV.UK site but I need to manage the expectations of the business as we have export orders to process for South Korea which require this approval.

Operating a public customs warehouse for UK companies – scrappage issues

2 January 2018

We operate a public customs warehouse for a number of UK companies. If a depositor decides to scrap defective goods from Customs Warehousing (CW) rather than return them to the supplier, is there any option they can do this without paying the taxes on those goods? We always advise HMRC, take photos and get a certificate for any scrappage requests, but then goods are cleared into free circulation so the customer has to pay the taxes. Is there any way they can avoid this?

Orders received from Turkey to be shipped to Germany — concerns

14 December 2017

We have significant orders from a large company based in Turkey. They ask us to ship to their warehouse in Germany where the stock is held until called off by the Turkish factory. I’m concerned we are not carrying out the shipment correctly for customs and VAT purposes. We send the goods to Germany at our cost as an intra-EU movement but we don’t declare it on the Intrastat return as it is going on to Turkey. The export is declared out of the Germany warehouse against our UK EORI and an ATR Movement Certificate is raised in Germany in our name and UK address. Our customers have advised us that they are VAT registered in Germany but we aren’t sure of the significance of this. We receive a copy of the German export declaration to keep as evidence that the goods have left the EU. Is this ok?