Are you clear on how to calculate your customs values?

Client:  

Retailer

Location:

London, UK and Germany

Challenge:

A major retailer contacted Quadrel when HMRC reviewed a licence fee agreement relating to a product they imported for sale in the UK.

HMRC claimed that as the agreement included an obligation for the importer to pay royalties for use of intellectual property used in the manufacture of the imported goods, the payments made under the licence agreement should be included in the customs value declaration. This would result in a significant increase in customs duty due to be paid by client.

Outcome:

Although customs law states that royalties have to be treated in this way, the licence fee agreement covered a bundle of many rights and services which the importer was entitled to benefit from, including financial, HR, legal and marketing advice and support.

Quadrel successfully demonstrated that these elements were not required to be included in the customs values and secured a reduction of over 60% in the amount of the additional payments subject to customs duty.

Quote from client:

“We had absolutely no idea that intangibles could be charged with import duties. A much better outcome in that we paid much less duty than what we were expecting before we used Quadrel to work on our behalf.”

Takeaway:

It is risky to assume that HMRC are always correct at their first time of asking. An independent review of how customs law applies to your commercial arrangements could reduce potential duty liabilities.

How we can help:

Quadrel can represent you to HMRC when you have a dispute, ruling or demand that you are unsure of or do not agree with. Through our advocacy service, we can either take up representation on your behalf or we will act as your adviser whilst you retain responsibility. If you are experiencing issues with HMRC, get in touch today by calling us on 02380 302 302 or email us at info@quadrel.co.uk.

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Find out if your business could have customs risks that need to be addressed or explored.

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02380 302 302

info@quadrel.co.uk

Quadrel

International House

George Curl Way

Southampton

Hampshire

SO18 2RZ

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Customs duty and customs compliance advisory service

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