Valuing imported goods using Method 5 (computed value)
How to use Method 5 to work out the customs value of your imported goods if you’re an importer or clearing agent.
Valuing goods can be complicated, so if you’re not an importer or clearing agent you may want to get someone to deal with customs for you.
Before you try Method 5 you must first have tried to use Method 3 (transaction value of similar goods).
You can also try to use Method 4 (deducted value) however you can try Method 5 before Method 4 if you want to.
Method 5 is based on the costs of production of the goods. Usually this method can only be used if the importer and supplier are related in a business sense.
Check ‘If the buyer and seller are related for valuation purposes’ in Method 1 (transaction value of the imported goods).
What to base the customs value on
The customs value is a built-up value. You base it on the total of the cost or value of materials and fabrication or other processing used in producing the imported goods, this includes:
- the items detailed in ‘Goods and services provided free of charge or at a reduced cost by the buyer’ in Method 1 (transaction value of the imported goods) if supplied by the buyer, directly or indirectly (this applies even if the engineering, development, artwork, design work and plans and sketches are carried out in the UK) — you must include the value of the work in the customs value if you charge the producer of the goods to be valued for that work
- containers and packing, find more information in Method 1 (transaction value of the imported goods)
- an amount for the producer’s profit and general expense
- the cost of transport, insurance and loading or handling connected with delivering the goods to the UK border
Providing evidence
You must be able to get information about the cost or value of the items in the previous section. This information must be based on the producer’s commercial accounts. These accounts must follow the general principles of accounting, which apply in the country where the goods are produced.
You must also be able to get information about the producer’s profit and general expenses. The amount to be added must be in line with the usual figures for profit and general expenses for producers in the country of exportation of the goods:
- of the same class or kind (this means goods which are in a group or range of goods produced by a particular industry or sector of industry and includes identical and similar goods — the goods do not need to be imported from the same country as the goods to be valued)
- for export to the UK
If you cannot get the information
You cannot use Method 5 if you do not have the information.
If you’ve already unsuccessfully tried Method 4 (deductive method), you must now use Method 6 (fall-back method).
Declaring goods using Customs Declaration Service software
If you’re submitting your declarations using Customs Declaration Service software, read the Customs Declaration Service instructions for completing imports.