Guidance: Pay less Customs Duty and VAT if you are importing capital goods

Who can get relief

You can get relief if you’re transferring a business to the UK where:

• that the business has completely ceased its activities outside the UK
• the new business or profession or non-profit making activity being carried out in the UK is of a similar nature

Businesses include limited companies, self-employed persons and non-profit making organisations.

Relief is available for people engaged in liberal professions (for example, engineers or architects).

Relief can be allowed where a merger with an established UK business takes place as long as a new activity is set up.

What you can claim relief on

You can get relief on capital goods and other equipment such as:

• office and shop equipment or machinery, and other tools of trade
• means of transport used for the purposes of production or for providing a service
• computer and other technical equipment needed to run your business
• if you’re an agricultural business, any livestock belonging to your business

Customs Duty

To qualify for Customs Duty relief the goods must:

• have belonged to and been used by your business continuously for at least 12 months before the transfer of activities to the UK
• be used for exactly the same purpose in the UK
• be appropriate to the nature and size of your business
• be imported from their previous location within 12 months of the date your business ceased activities there

We can waive the first and last conditions in special cases depending on the circumstances. For example, if a political upheaval in the country where your business was located prevented 12 months use or import within 12 months of cessation.

If you consider that exceptional circumstances apply, you should give evidence to support your claim to the National Imports Reliefs Unit.

VAT

To get relief on import VAT your business must also:

• be concerned exclusively with making taxable supplies
• either have, or expect to have a taxable turnover exceeding the UK registration limits for VAT
• voluntarily register for VAT

Goods you cannot claim relief on

You cannot get relief on:

• means of transport which are not used for the purposes of production or for providing a service
• supplies of any kind intended for human consumption or for animal feed
• fuel and stocks of raw materials or finished or semi-finished products, including horticultural products for sale, such as plants, shrubs and seeds
• livestock belonging to dealers

Before you claim

You should check if your goods are strictly controlled and if you will need an import licence.

When you get the commodity code for your goods using the tariff it will tell you if you need a licence.

When to claim

You should claim relief at the time of import. But if you do not do this, we may accept a late claim and repay the appropriate charges subject to conditions.

How to claim

Goods imported as freight or in baggage

If your goods are imported as freight or in baggage you must complete an import declaration.

The Additional Procedure Codes for this relief are:

• C09 — for companies
• C10 — for self-employed people and non-profit making organisations

If you’re eligible to claim VAT relief, code F45 must also be declared in DE 1/11.

You’ll need to have the necessary supporting documentation or evidence to show you’re entitled to this relief.

If you are bringing goods from a Special Fiscal Territory, such as from the Channel Islands to Great Britain (England, Scotland and Wales), you must also use Additional Procedure Code F15 in DE 1/11.

Find out more information about how to:

• declare goods under this relief, including how to evidence eligibility to use the relief can be found in: Appendix 2: DE 1/11: Additional Procedure Codes of the Customs Declaration Service (CDS)
• complete an import declaration on the Customs Declaration Service in the CDS Declaration Completion Instructions for Imports

Goods imported by post

Ask the sender to write ‘Capital goods — relief claimed’ clearly on the package and its accompanying customs declaration (CN22 or CN23).

Find more information about importing goods by post.

Getting someone else to complete your customs declaration

You can use someone else to complete entries on your behalf but you must make sure you give clear written instructions for the goods that you’re claiming relief on.

After you claim

If you dispose of your goods

You must keep the goods for a minimum of 12 months from the date of importation to maintain Customs Duty relief. During this time, you must not lend, hire or transfer these goods. The goods cannot be used as security.

At the end of the 12 month period, you can dispose of the goods without restriction.

We may extend this retention period up to 36 months if we become aware of any specific risks that may abuse the conditions of this relief. If we decide this safeguarding action is necessary, the length of this mandatory retention period will be agreed at, or within 6 months after, the date of importation.

To be eligible to claim VAT relief on importation, the goods must be put to their intended use. If, after putting the goods to their intended use, you subsequently dispose of the goods or put them to any use other than that for which they were imported, this will be a taxable supply and subject to VAT.

You must tell the National Imports Reliefs Unit if you dispose or transfer your goods to another entity.

Records you must keep

You must keep:

• evidence of ownership
• any National Imports Relief Unit acknowledgement letters
• receipts
• bills
• invoices
• insurance documents
• evidence of when, where and how the goods were used and how they were disposed of
  You need to keep additional records if:
• you transfer goods to another approved entity — keep any official documentation detailing transfer between you and the other entity
• you re-export the goods — keep the National Export System declaration details or export documentation providing information about the date of export
• your goods are stolen, lost or destroyed — keep police records or insurance incident reports, or official documentation providing details of the date of the incident or loss

You must keep all records for a minimum of 4 years.

If you break the conditions of the relief

If you no longer meet the conditions of the relief, you must immediately notify the National Import Reliefs Unit electronically, or in writing.

You may have to pay the Customs Duty and VAT that were relieved at import.

Provide full details of the importation and why you think the conditions of the relief have been breached.

If you want to appeal

Appeal if you disagree a decision made by HMRC.