Added value calculation of duty for Rate of Yield

Information on added value calculation of duty for Rate of Yield.

Not applicable under TCTA in GB – applies under Union Custom Code in Northern Ireland

Under this method, duty is charged on the costs of processing the exported goods and transporting the processed products back to the UK. The duty rate applicable is the rate which applies to the processed products. To apply this method, the person must:

  • calculate the customs value of the imported products using one of the valuation methods
  • deduct from this the value of the exported goods used in the manufacture of the processed products, applying the agreed rate of yield as appropriate account for duty on the difference between the two values, at the rate which applies to the imported processed products

Example of ‘Added Value’ duty relief calculation

All the exported goods, woven woollen cloth, are used to produce one type of processed product, men’s suits liable to a 13% rate of customs duty which are all re-imported into the UK at the same time in a single consignment. The value of the processed product is based on the price paid or payable for the goods, determined using customs valuation methods

‘Added Value’ method of calculating duty

Example of Customs value of processed products based on the built-up value.

Value of exported cloth = £5,000.00                                                                             

Cost of process = £2,400.00                                                                                                      

Freight and insurance (from processing country to the UK) = £484.62

Total customs value of the suits = £7,884.62                                                                       

LESS: Value of exported cloth = £5,000.00                                                                              

‘Added Value’ on which duty is due = £2,884.62                                                            

Duty due at 13% = £375.00