Rate of Yield (RoY)

Information on Rate of Yield.

Rates of yield establish the quantity of goods declared to inward processing that are contained in the final processed products, considering any goods lost or used up during processing such as evaporation. If a rate of yield is not known at the time of application, it must be possible to establish the actual rate achieved through the processing records.

It is important that the rate of yield is accurate as this determines the amount, of customs charges that will be suspended.

When goods are entered to IP, the customs charges initially suspended will depend on the quantity and value of goods entered to IP which may be re-exported, release to free circulation or put to a disposal that discharges the IP. Where the processing operation is repair and return the Rate of Yield would be expected to be 1:1.

Few Examples for Rate of Yield calculations

  • If a bike manufacturer was to import bicycle wheels to attach to its range of bikes, then a unicycle would have a Rate of Yield of 1:1, a bicycle would be 2:1 and a tricycle 3:1.

  • If the bike manufacturer imported 1,000 wheels and from that shipment made only bicycles, importers would expect to see 500 bikes produced from the 1,000 wheels at a Rate of Yield to 2:1.

  • A clothing example: if five metres of cloth is used to produce two dresses, the ratio is then 5:2.

Various Rate of Yield for the same type of item

In some instances, an exact Rate of Yield can be stated on the application and in others, it cannot. For example, some goods are made up from a set number of parts per item. Others might be dependent on customer specification. Therefore, there can be various Rates of Yield for the same type of item.

Production Losses

To allow importers Rate of Yield to be verified and to ensure they obtain the full amount of relief they are entitled to, HMRC need to be aware of any losses that arise during processing, for example  through evaporation, desiccation, leaching or venting as gas. These losses should be subtracted from the quantity of import goods prior to establishing the Rate of Yield. For the purposes of duty relief any Secondary Process Products of the processing operation are not to be treated as production losses. Duty liability in respect of any production loss must be included in the duty liability of processed products. 

SPP are not the same as production losses and may be of considerable value or of no value at all.

Rate of Yield relating to beef fillets (This applies to all meet products)

Processing / trimming whole beef fillets. 

When whole beef fillets are processed/trimmed for aircraft or ships meals the main requirements for users are for whole trimmed fillets, individually portioned fillet steaks and strips of fillet for use in dishes such as beef stroganoff. A particular revenue risk is the amount of perfectly edible wastage which could find its way onto the free circulation. 

The waste from trimming imported fillets to fulfil users’ requirements falls into three categories. These must be identified in the authorisation as ‘SPP’.

Beef fillets - disposal of Secondary Processed Products (SPPs)

If SPP include the ‘tails’ of the fillet, the authorisation holder must weigh these ‘tails’ before disposal and make a signed declaration to the Supervising Customs Office at regular intervals. Checks should be made to ensure that this procedure is being carried out and that the weight of the tails is correct.

Beef fillets - airline meals

Cutting, slicing, and cooking meat for airline meals is not allowable under an IP authorisation by customs declaration.  A full IP authorisation must be held.