HMRC internal manual

Customs Special Procedures Manual

SPE14030 - Specific rules and processes relating to Outward Processing: process and repair

It is important to distinguish between what is a repair and what is a process when goods are entered to Outward Processing as this will drive which type of authorisation a trader may use.

Process and repair are defined in the as set out in Article 24 of the Trade and Cooperation Agreement

A ‘full’ authorisation may cover any type of process or repair, but the ‘authorisation by declaration’ may only be used for goods sent for repair, not for any other type of process which goes beyond repair.


A process is any procedure whereby raw materials or parts are made up or incorporated into a finished product (‘processed product’). The testing of goods to ensure that they meet set standards is also classed as a process.

Repair / replacement

Where the outward processing procedure is requested for repair, the temporary export goods shall be capable of being repaired and the procedure shall not be used to improve the technical performance of the goods.

Repair of goods includes restoring them to their original condition and putting them in order. If goods are declared for export for repair, it must be established that the goods are of a type which is capable of being repaired (that is, not agricultural or primary products such as minerals, chemicals etc). However, while the goods are abroad, the repairer may decide that it is not economical to repair them and provide replacements instead.

Calculation of duties: goods repaired or replaced free of charge

No duty is due on authorised OP goods which have been repaired, or replaced, free of charge under a contractual or statutory obligation arising from a guarantee.

Documentary evidence that the repair was free of charge, such as a warranty or other contractual documents, must be produced with the import entry.

Calculation of duties: chargeable repairs and replacements

If a charge is made to repair or replace goods, duty is due on the repair costs only.

Repair costs include the total payment for the work carried out, plus inward freight and insurance charges. Outward freight or other transport costs are excluded, unless they are payable to the repairer as a condition of having the repair or replacement carried out.

The amount paid for repair, or for the replacement goods, must not be influenced by any relationship between the parties involved or offset against any other transactions between the two parties.

Calculation of duties: non-commercial repairs

Non-commercial goods which have been repaired outside the UK are treated for duty purposes in the same way as any other OP goods. If the repair is made free of charge under warranty, no duty is due on the repair costs. The importer must produce the warranty document at re importation.

Goods under warranty

If the goods are replaced under warranty, no duty is due but VAT is chargeable on the full VAT value of the replacements (VAT General Regulations 1995, Regulation 126 refers). This is an important point to bear in mind, as private importers will not be in a position to reclaim import VAT as input tax, but may be able to recover the import VAT paid, under the EC 6th VAT Directive.

If a charge is made for the repair or replacement, duty and VAT on the repair costs is due as described in the previous paragraph. Replacement goods imported under this facility are subject to the ‘equivalent quality’ criteria described.

Note - Northern Ireland (NI) Customs Authorisations will continue to fall within the provisions of the Union Customs Code (UCC), as retained by the European Union (Withdrawal) Act 2018 and CEMA 1979