What happens if an inward processing authorisation holder does not comply with their conditions of approval

Information on what happens if an inward processing authorisation holder does not comply with their conditions for approval.

They should only apply to use inward processing if they are sure they can meet all the obligations attached to the authorisation. If the requirements and the processes outlined in the authorisation are not strictly adhered to a customs debt is incurred and the suspended customs duties and import VAT will become due. The responsibility for this debt lies with the IP authorisation holder. This also applies to people using IP with an authorisation by customs declaration.

The conditions of approval are set out in the notification and failing to meet them may render the authorisation holder liable to being charged the suspended duty and VAT.

In more serious cases, this can also lead to:

  • being charged a penalty
  • suspension and/or revocation of the authorisation

The approval holder should always contact their Supervising Customs Office if they become aware they have breached their conditions.

Examples of when a customs debt is incurred are as follows:

a. the non-fulfilment of an obligation arising in respect of goods liable to import duties from the use of a customs procedure under which they are placed

This would include not fulfilling one of the requirements set out in the person IP authorisation for example - late or non-submission of a bill of discharge or exceeding the period of discharge set in the authorisation

b. non-compliance with a condition governing the placing of the goods under that procedure. This would include not having an IP authorisation in place when the goods were declared to an IP Procedure Code (PC). This could be either because a previous authorisation had not been renewed on time or an IP authorisation did not exist for the person named on the declaration. UK leg s.4(3) and (6) of the TCTA sets out when liability to import duty is incurred

c. through the unlawful removal from customs supervision of goods liable to import duties

d. when goods are released to free circulation