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HMRC internal manual

Customs Special Procedures Manual

Specific rules relating to Outward Processing: processed products or replacements not liable to customs import duty

OP is of no benefit if compensating products or replacements are not liable to customs import duties so an OP authorisation is not required for these goods.

There is, however, a Customs Procedure Code (CPC) outside of the OP series that will allow for the relief of import VAT only – this is CPC 40 00 065 but is not a Special Procedure CPC.

If compensating products are eligible for a ‘nil’ duty rate only if declared under preference arrangements, or under a quota, traders may still use OP to export the goods since (in rare circumstances) preference may no longer be available when they are re-imported, or a quota for the compensating products may no longer be open. In such circumstances, if the goods have not been exported under OP no relief can normally be allowed (unless a retrospective authorisation can be obtained). Export under OP arrangements, however, in no way obliges the importer to enter the compensating products to OP at import. If the importer can obtain a greater benefit by entering the goods to preference or some other arrangement, they may do so.