Navigating the complexity of valuing your imported goods ready for HMRC to levy any Customs Duty or Import VAT has, for a very long time, been an artform shrouded in terminology and, in some sense, mystery.
The six methods of valuation are likely to be unknown to many importers who simply rely on the accompanying commercial invoice that arrives with their consignment to set the value at which Duty and Import VAT are charged. That methodology works for approximately 90% of cases involving goods moving across frontiers and is called ‘Method 1’.
Nevertheless, where traders fall foul of HMRC, such as during an International Trade and Compliance visit, is when goods are sold between related entities or there is a simple transfer of own stock. In this instance, importers have only a short time to ensure they are familiar with Methods 2-6.
However, HMRC have announced that they will begin to offer Advanced Valuation Rulings (AVR) to importers to ensure that they accurately value their goods for customs purposes ahead of moving their consignments. This service compliments the Advanced Tariff Ruling (ATR) and Advanced Origin Ruling (AOR) services to try to ensure that importers and exporters have surety in the details they include on their import and export declarations.
It is envisaged the system will be similar in operation and approach to its stable mates through an online form requesting details and explanations of supply chains and the relationships between sellers and buyers. It is estimated that rulings would take 90 days to obtain.
This is a welcome development for importers and exporters who struggle to accurately value their goods by helping them with one of the most complex areas of making a declaration. As with all things trade-related with the EU, the text of the UK-EU Trade and Co-operation Agreement will need to be amended before the service goes live to ensure a degree of acceptability of the ruling.
Would you like to know more?
If you would like to discuss any of the above, please contact your usual Blick Rothenberg contact, or Simon Sutcliffe using the details on this page or the form below.