Guidance: Declaring goods and paying tax when using a Freeport customs site

Before declaring any goods you’ll need to have applied to use the Freeport customs special procedure (a single authorisation combined with easier declaration requirements).

Declaring goods brought into a Freeport customs site

Declaring goods entering Great Britain to the Freeport customs special procedure

You can declare goods entering Great Britain (England, Scotland and Wales) either before they arrive in Great Britain, or when the goods have arrived.

To declare the goods, you’ll need to complete a Customs Clearance Request (form C21) using the Freeport procedure codes in the declaration completion requirements for Great Britain. You’ll also need to use:

Your goods will not be able to leave the control of the port until HMRC has confirmed that the goods can be released to the Freeport customs site.

Goods discharged from temporary storage will move directly to the Freeport customs site under the Freeport special procedure.

Your customs site operator will also need evidence of your declaration.

Goods moved from temporary storage

When goods move from a port’s temporary storage facility to an external temporary storage facility in a Freeport customs site, to be released from temporary storage they must be discharged using form C21.

You must then make a declaration by conduct to the Freeport customs special procedure. To do this, you’ll need to:

• have received the goods at your business premises in the Freeport customs site
• tell your Freeport customs site operator that you have received the goods (an authorised customs operator looks after a Freeport)
• make an entry into your commercial records

Details you’ll need to enter in your own records may include:

• the commodity code
• the customs procedure code
• your unique consignment reference, or appropriate commercial reference
• purchase and, if available, the sales invoice numbers
• the date and time of entry in records
• any Freeport customs site, warehousing or temporary storage stock account references
• the Freeport customs site or warehouse approval number
• a written description of the goods — so they are easy to identify
• customs value
• quantity of goods — for example, number of packages and items, net mass
• details of licensing requirements and licence numbers
• details of any supporting documents, including the serial numbers, where appropriate, needed before the goods can be released
• details of the person you’re representing if you are making a declaration on behalf of someone else

To make a declaration by conduct to the Freeport customs special procedure, you’ll need to move the goods directly from a temporary storage facility to your premises in the site.

You can apply for a temporary storage approval to get clearance of the goods to the Freeport customs special procedure yourself.

You can also use somebody else’s temporary storage facility at the Freeport customs site. You’ll need to check that:

• they already have (or are planning to apply for) a temporary storage approval
• you have agreement with the operator of the temporary storage facility to use it

Goods moved under transit

You can use transit to bring goods into a Freeport customs site, if the authorised consignee’s authorisation includes the site as an approved location.

Your Freeport customs site operator will need evidence of the transit movement, such as the Transit Accompanying Document.

When the goods arrive, the authorised consignee will request permission to end the transit movement and unload the goods.

To move the goods into the Freeport customs site and use the Freeport customs special procedure, you’ll need to make a declaration by conduct. To do this, you’ll need to:

• have received the goods at your business premises in the Freeport customs site
• tell your Freeport customs site operator that you have received the goods
• make an entry into your commercial records

Details you’ll need to enter in your own records may include:

• the commodity code
• the customs procedure code
• your unique consignment reference, or appropriate commercial reference
• purchase and, if available, the sales invoice numbers
• the date and time of entry in records
• any Freeport customs site, warehousing or temporary storage stock account references
• the Freeport customs site or warehouse approval number
• a written description of the goods — so they are easy to identify
• customs value
• quantity of goods — for example, number of packages and items, net mass
• details of licensing requirements and licence numbers
• details of any supporting documents, including the serial numbers, where appropriate, needed before the goods can be released
• details of the person you’re representing if you are making a declaration on behalf of someone else

Declaring goods removed from a Freeport customs site

Goods exported

You’ll normally need to submit an exit summary declaration when goods are exported from the UK. When an exit summary declaration is not needed, you’ll need to give an onward export notification to HMRC.

Your Freeport customs site operator will need evidence that the goods are being moved to a place from where they will be exported.

Goods moved into free circulation

You’ll need to make a declaration into free circulation. Your goods will not be allowed to leave the Freeport customs site until HMRC has confirmed that they can be released. Your Freeport customs site operator will need evidence of this.

Paying duty when you release goods to free circulation

If you release your goods to free circulation you’ll need to pay duty.

You’ll have told us if you wanted to pay duty based on either the goods being declared to the Freeport customs special procedures or released to free circulation.

You can change this method by contacting your supervising office and explaining the reasons. They will either allow or refuse your request and tell you if this impacts your authorisation.

Retail sales of goods stored under the Freeport special procedure

You can only make retail sales of goods stored under the special procedures to:

• individuals travelling outside the UK
• members of international organisations
• members of NATO forces
• individuals covered by diplomatic and consular arrangements
• remote and online customers, where goods are picked and dispatched to order

Goods moved into other customs special procedures

You’ll need to:

• check that a declaration has been made into the other customs special procedure — your Freeport customs site operator will also need evidence of this
• have evidence the goods are not covered by the Freeport customs special procedure anymore
• keep the details of the goods that have been removed in your records

Declaring goods moved between different Freeport customs sites

If you’re sending goods to another authorised business’s Freeport customs site

You’ll need to:

• keep the details of the goods that have been removed in your records
• provide information about the movement to the Freeport customs site operator

If you’re moving goods to another one of your own Freeport customs sites

You’ll need to:

• keep the details of the goods that have been removed in your records
• provide information about the movement to the Freeport customs site operators

If you’re receiving goods from another authorised business’s Freeport customs sites

You will need to make a declaration by conduct. To do this, you’ll need to:

• have received the goods at your business premises in the Freeport customs site
• tell your Freeport customs site operator that you have received the goods
• make an entry into your commercial records

Details you’ll need to enter in your own records may include:

• the commodity code
• the customs procedure code
• your unique consignment reference, or appropriate commercial reference
• purchase and, if available, the sales invoice numbers
• the date and time of entry in records
• any Freeport customs site, warehousing or temporary storage stock account references
• the Freeport customs site or warehouse approval number
• a written description of the goods — so they are easy to identify
• customs value
• quantity of goods — for example, number of packages and items, net mass
• details of licensing requirements and licence numbers
• details of any supporting documents, including the serial numbers, where appropriate, needed before the goods can be released
• details of the person you’re representing if you are making a declaration on behalf of someone else

Declaring goods moved within the same Freeport customs site

If you’re receiving goods from another authorised business in the same Freeport customs site

You will need to make a declaration by conduct. To do this, you’ll need to:

• have received the goods at your business premises in the Freeport customs site
• tell your Freeport customs site operator that you have received the goods
• make an entry into your commercial records

Details you’ll need to enter in your own records may include:

• the commodity code
• the customs procedure code
• your unique consignment reference, or appropriate commercial reference
• purchase and, if available, the sales invoice numbers
• the date and time of entry in records
• any Freeport customs site, warehousing or temporary storage stock account references
• the Freeport customs site or warehouse approval number
• a written description of the goods — so they are easy to identify
• customs value
• quantity of goods — for example, number of packages and items, net mass
• details of licensing requirements and licence numbers
• details of any supporting documents, including the serial numbers, where appropriate, needed before the goods can be released
• details of the person you’re representing if you are making a declaration on behalf of someone else

Receiving goods from another customs special procedure

You will need to make a declaration by conduct. To do this, you’ll need to:

• have received the goods at your business premises in the Freeport customs site
• tell your Freeport customs site operator that you have received the goods
• make an entry into your commercial records

Details you’ll need to enter in your own records may include:

• the commodity code
• the customs procedure code
• your unique consignment reference, or appropriate commercial reference
• purchase and, if available, the sales invoice numbers
• the date and time of entry in records
• any Freeport customs site, warehousing or temporary storage stock account references
• the Freeport customs site or warehouse approval number
• a written description of the goods — so they are easy to identify
• customs value
• quantity of goods — for example, number of packages and items, net mass
• details of licensing requirements and licence numbers
• details of any supporting documents, including the serial numbers, where appropriate, needed before the goods can be released
• details of the person you’re representing if you are making a declaration on behalf of someone else

Removing goods from the Freeport customs site temporarily

You can remove goods under the Freeport customs special procedure from the Freeport customs site on a temporary basis. This includes briefly removing single items for viewing or testing by prospective purchasers. If you do this:

• removals for viewing or testing must be done near to the Freeport customs site
• prospective purchasers must always be accompanied by freeport employees
• you must keep records and obtain permission from HMRC before you remove the goods

The goods will remain under the Freeport customs special procedure arrangements while they are not in your storage area.

Your Freeport customs site operator will also need notification and evidence of permission to remove the goods temporarily.

Disposing of goods you’ve processed or repaired

When you’ve finished processing or repairing your goods, you must leave the Freeport customs special procedure and dispose of your goods by one of the following:

• re-exporting them outside the UK
• declaring them to another customs procedure
• transferring them to another Freeport business authorisation holder
• destroying them — usually only possible under customs supervision
• using other simplified disposal methods

There are also special cases for certain goods which are classed as re-export. Your authorisation letter will tell you:

• the period of time you have to discharge your goods — this will be based on the period you estimated on your application form
• details of your supervising office if you need to extend the period

Information you’ll need if you dispose of your goods

If you’ve disposed of your goods, you’ll need the:

• disposal reference number
• date of disposal
• free circulation declaration number
• method of valuation
• method of disposal
• commodity code
• description
• quantity
• rate of yield
• amounts of customs charges that you’re claiming relief on

VAT on supplies in the Freeport customs site

You may be able to apply a zero rate of VAT on supplies within the Freeport customs site of either:

• goods declared to the Freeport customs special procedure
• services carried out on goods declared to the Freeport customs special procedure

When you issue a VAT invoice for zero rated goods or services, it must include the reference ‘free zone’.

You cannot zero rate goods or services you sell to a business outside of a Freeport customs site.

If you are using an existing customs special procedure, the usual VAT rules for that procedure will apply.

When you can zero rate supplies of goods

You can zero rate supplies of goods if:

• they are declared to the Freeport customs special procedure
• they are sold from one authorised Freeport business to another in the Freeport customs site
• both Freeport businesses are registered for VAT with HMRC (unless they are exempt from registering for VAT and HMRC has approved this exemption)

This includes goods declared to the Freeport customs special procedure that have been combined with goods purchased in the UK as part of an authorised activity in the Freeport customs site.

When you can zero rate supplies of services

You can zero rate supplies of services if the service:

• is performed on or is in relation to goods declared to the Freeport customs special procedure
• would be taxable, apart from under the free zone provisions
• has been performed by an authorised person

The receiver of the service must tell the supplier in writing (for example, an email or letter) that the conditions for the zero rate are met and zero rate applies.

When the person receiving the goods may have to account for output tax

The receiver of zero rated goods or services may need to account for output tax if you either:

• do not make an onward supply of those goods within 3 months of declaring them to free circulation
• breach the rules of the Freeport customs special procedure

The receiver will need to use the value of the goods or service to calculate how much output tax is due. They may also be able to claim back any input tax, in line with the usual VAT rules.