How a UK manufacturer cut their customs duty bill using Inward Processing (IP)

Client:  

UK Manufacturer

Location:

Various UK sites

Challenge:

A UK based company was importing semi-finished components for use in the manufacture of equipment incorporated into energy/ chemical sector plant.

 

Its annual customs duty bill on the components was £180 and the majority of equipment (around 80%) was exported out of the UK to non-EU countries.

 

The company approached Quadrel for a review of their customs duties, which is when we recommended the use of Inward Processing (IP) to reduce the duty cost to the business.

Outcome:

Following the application process managed by Quadrel, the company received authorisation from HMRC to operate IP.

 

The company used IP to suspend customs duty and import VAT on its imported goods which would be re-exported later, once incorporated into the equipment it was manufacturing.

 

The annual duty saving achieved was around £180k x 80% (the proportion of imported goods re-exported) i.e. approximately £145k annually. This saving constitutes additional bottom line profit.

 

There was also a cash flow benefit from the suspended import VAT.

Takeaway:

Businesses are often unaware that they can benefit from continuous savings while importing dutiable goods using Inward Processing and that backdating of IP can often result in repayment of past duties.

How we can help:

Could you be using IP to achieve customs duty savings in your business? Quadrel provide a range of customs duty and compliance services and can audit your company’s customs processes to identify cost savings opportunities. For your free, no-obligation consultation, get in touch by calling us on 02380 302 302 or email us at info@quadrel.co.uk.

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02380 302 302

info@quadrel.co.uk

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