I need inward processing to be set up now
What is it ?
Inward processing allows goods to be imported without payment of VAT and duty so long as the goods are re-exported.
Why do I need it ?
If your organisation repairs goods and re-exports them then Inward Processing allows those goods to be imported without needing to pay VAT and duty.
Who else uses it ?
Every UK manufacturing organisation that repairs goods will need to set up Inward Processing. It's also used for a variety of purposes such as processing food items, cutting out of cloth and assembly of electronic components into information technology products.
How do I set up Inward Processing ?
Inward Processing allows organisations to import and process goods whilst paying a lower (sometimes zero) rate of VAT and duty on the import. Typically, the goods are re-exported.
There are three key steps to setting up Inward Processing for your company:
Application for a Customs Comprehensive Guarantee
Application for Inward Processing
Managing the goods imported under Inward Processing
Customs Comprehensive Guarantee
Applying for a Guarantee
Inward processing allows VAT and duty to be suspended when the goods are in Great Britain. While the goods are in the UK without any VAT or duty having been paid, HMRC require that the processor provides a guarantee that the VAT and duty could be paid if the goods go missing. That guarantee is a 'Customs Comprehensive Guarantee' (CCG)
Companies apply to HMRC for a CCG. The application is something that Cratle can complete for you. It requires some company financial background and sometimes, a supporting guaratnee from a financial institution. We have the experience to navigate the process and complete documentation quickly.
Applying for Inward Processing
Inward Processing (IP) is a customs regime that companies agree with HMRC, not something that can be implemented without HMRC engagement. Each transaction is supervised by HMRC so close liason is necessary while the regime is operated.
Each company must be specific on the processes that they wish to operate under Inward Processing when setting up the regime. There's a defined list of processes that are allowable so it's relatively straightforward to pick a process and define the commodity codes that will be processed.
The application is something that Cratle can complete for you. The application requires the CCG so it's straightforwad to build on the CCG to complete the IP application.
Managing goods in the regime
What needs to be done day-to-day ?
When the goods are imported, they must be uniquely identifiable from other manufactured goods. The indentifier might be a serial number or they could be identified by attaching a label to the goods.
The processing of the goods must be included in the company's commercial records (e.g. sales order, work orders, shipping notes)
The goods can be re-exported once they have been processed. If, instead, the goods are retained in the UK then duty+VAT is due on the goods.
A Bill of Discharge needs to be completed after the goods have been re-exported. The Bill of Dischange must be sent to the HMRC supervising office.