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HMRC internal manual

Customs Authorisation and Approval

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HM Revenue & Customs
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Transition Arrangements: Transition arrangements for Valuation (including the Valuation Simplification authorisation)

Under the Code, the facility to use an earlier sale for the customs value is withdrawn.  Transition arrangements allow for earlier sales to be used until 31 December 2017 where the declarant is bound by a contract concluded before the Implementing Act (IA) enters into force.  This is expected to be the twentieth day following the publication of the IA in the Official Journal for the IA, not 1 May 2016.

This contract must be:

·        Legally binding on the Declarant

·        Signed, dated and witnessed

·        Clearly identify the goods to which it relates

·        Be fully auditable between the contract, purchase and sales invoice, price paid for the goods and customs declaration.

Where this audit trail cannot be clearly illustrated and verified by the Customs authorities the earlier sale price will not be allowed.

The Community Customs Code (Reg. No. 2913/92) rules include royalties within the customs value only where they directly relate to the goods and are part of the condition of the sale.  Under the Code, virtually all royalty payments will be dutiable, irrespective of any direct relationships between the manufacturer and third party licensor.

Once the IT transition period for customs declarations ends (scheduled for October 2017), details of the build-up (additions and deductions) of the customs value will be required to be included within the customs declaration. 

Valuation Simplification authorisations issued under the Community Customs Code (Reg. No. 2913/92) may continue to be used until the authorisation is reassessed, at which time the criteria and conditions stipulated in the Code will be required to be fulfilled.  This reassessment must be completed by 1 May 2019.

The valuation simplification may not be combined with Simplified Declaration Procedure (SDP).

From 1 May 2016, all operations and procedures related to this authorisation, including the calculation of the customs value must be completed under the Code provisions, regardless of whether a Community Customs Code (Reg. No. 2913/92) authorisation is still being used.  This includes any goods held in storage, pre-lodged declarations or discharges from special procedures on or after 1 May 2016.

The following table details the specific types of operations which may be operated under a Community Customs Code (Reg. No. 2913/92) authorisation and those which may only be performed if a new Code authorisation is held. 

Only contracts and agreements which are already in place on 1 May 2016 will be allowed to continue under the Community Customs Code (Reg. No. 2913/92). 

Valuation Operation changes Available with a 2913/92 authorisation (CCC) Only applies to a 952/13 authorisation (UCC)
Earlier Sales prices may be used as the customs value Y Only where a binding contact exists by deadline.  Expires 31 December 2017 Y Only where a binding contact exists by deadline.  Expires 31 December 2017
Inclusion of royalties within the customs value Y inclusion becomes mandatory from 1 May 2016 Y inclusion becomes mandatory from 1 May 2016
Inclusion of customs value build up in customs declaration N Y After IT transition ends for customs declarations
Authorisation to simplify the calculation of the additions or deductions to the customs value Y Y
Combine the valuation simplification with simplified declaration procedure (SDP) Y N

There are three new high level criteria changes for valuation simplifications:

·        Compliance history in other taxation areas

·        Effective internal management controls to manage customs processes

·        Robust record keeping to prove the declared customs value.

The specific criteria to be met in these areas are detailed in section CAA07200.