Types of inward processing Authorisations

Information on the types of inward processing authorisations.

Full Authorisation

This is for inward processing users who either:

  • use IP regularly
  • use simplified declarations to import goods
  • use simplified declarations to export goods
  • import non-commercial goods
  • are not established in the UK

Approval must be in place before IP can be used

A full authorisation can be granted up to a maximum period of 5 years.

Authorisation by customs declaration (AbD)

This is suited to persons importing goods occasionally to IP and carrying out all processing in the UK. This method is restricted to three uses in a rolling year and each consignment must not exceed £500,000.

AbD requires a security deposit to be submitted to HMRC, for the total of duty and import VAT suspended. This security deposit may be refunded upon HMRC’s acceptance of a Bill of Discharge (BOD3), after the IP goods have been re-exported.

Security deposit may be provided through a bank single guarantee or duty deferment account if the applicant has one.

Importers cannot use AbD if:

  • they are using simplified customs declarations
  • they are asking for a retrospective or backdated authorisation
  • their goods are subject to anti-dumping duty
  • they are using economic codes 6, 7, 8, 12 or 22
  • they are importing and processing:
    • controlled goods like arms, ammunition or chemicals that will be made into drugs
    • works of art, collector’s pieces, and antiques
    • excise goods
    • meat for airline meals
    • catalysts, agents, or items that help to manufacture or process good for export

Retrospective authorisation

Importers can apply for authorisation after they’ve imported the goods, or while they are going through the process. HMRC will only approve a person where a retrospective authorisation has not been given in the previous three years.

To apply, importer needs to complete an SP3 form[MS(CaG1] . They will need to demonstrate a strong economic case and if accepted, records must be updated, and previous import declaration must be withdrawn and replaced.

In exceptional circumstances an authorisation can be backdated no longer than one year before the date on which the application was accepted. However, if this is a renewal it can be backdated to the date previous authorisation expired.

A lack of knowledge is not deemed to be exceptional circumstances.

Requests for retrospective authorisation are considered on a case-by-case-basis.

The trader must state why they require this type of authorisation and be able to provide sufficient evidence if requested by HMRC.

To be granted a retrospective authorisation all the following conditions must be met:

  • there is a proven economic need
  • the application is not an attempt to avoid duty/vat or any measures in place
  • the importer can prove based on accounts or records that:
    • all the requirements of the procedure are met
    • where appropriate, the goods can be identified for the period involved
  • the authorisation does not require an examination of the economic conditions, except where the application concerns renewal for the same kind of operations and goods
  • any application for renewal for the same kind of goods or operation the application is submitted within three years of the expiry of the original. HMRC may grant a retrospective authorisation even if the goods are no longer available in the UK subject to the conditions above

If a trader is granted retrospective IP, they will be instructed to:

  • arrange for replacement import customs declarations to be entered to customs declaration service and copies sent to Supervising Customs Office within 3 months of letter granting IP retrospective (and include these on their relevant Bill of Discharge)
  • complete C285  if any duty/Import VAT reclaim (or VAT reclaim may have to be managed via VAT Return (PIVA))
  • complete C81 if IP goods have already been exported

If a retrospective authorisation is approved, the trader is required to ensure that records and other documentation reflect any grant of retrospective authorisation. This could include amending or cancelling previous import customs declarations.

For more information on how to amend or cancel an import customs declaration please visit Amend or cancel a Customs Declaration Service import declaration - GOV.UK (www.gov.uk)

Note: Retrospective authorisations cannot be granted for equivalence

Authorisations covering Northern Ireland and the EU

(Northern Ireland private individuals and traders only) importers who carryout work on their goods over sites in both Northern Ireland and the EU, can get a single authorisation rather than having one for each site.

In Northern Ireland, to apply, the importer needs to request access to the application system by emailing admin.uum.cdms@hmrc.gov.uk and provide the following:

  • business/entity name
  • contact email address to use for EU portal account
  • address of your Northern Ireland operation
  • EORI number starting XI

This is to have an account created so the applicant can log into the EUs online service.

Once set up, the applicant needs to use the EU trader portal to complete an IP application online for HMRC to review.

Importers can apply for an authorisation covering both Northern Ireland and the EU. If an authorisation is required for Northern Ireland and Great Britain, the trader will need to fill in a separate form for each.