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HMRC internal manual

Customs Special Procedures Manual

Specific rules and processes relating to Outward Processing: rate of yield – determining the debt due

The rate of yield (UCC Article 255) is a crucial aspect of inward and outward processing and it is crucial that the proportion of import (for IP) and ‘temporary’ export (for OP) goods incorporated into the finished, processed products is calculated accurately. It is, therefore, essential that staff dealing with OP traders understand the concept of the rate of yield, and agree appropriate practical methods of establishing it during the authorisation process.

UCC Article 86(5) - In order to correctly determine the amount of the customs debt incurred for processed products resulting from the Outward Processing procedure (or replacement products for Standard Exchange System (SES) (UCC Article 261(1)) the amount of duty shall be calculated on the basis of the cost of the processing operation undertaken outside the customs territory of the Union.

Calculating the amount of duty due on OP processed goods

DA Article 75 - Where specific import duty is due to be applied in relation to the processed products resulting from the Outward Processing procedure (or replacement products for SES), the amount of the import duty shall be calculated as follows:

the customs value of the processed products (at the time of acceptance of the customs declaration for release for free circulation)

minus

the statistical value of the corresponding temporary export goods at the time when they were placed under the Outward Processing procedure

multiplied by

the amount of import duty applicable to the processed products or replacement products

divided by

the customs value of the processed products or replacement products

It should be noted that, under UCC, ‘standard’ rates of yield (ex-CCC Annex 69) no longer exist.

It should also be noted that the ‘duty differential’ method of calculation no longer exists under the UCC.

This guidance provides information on the ‘Added Value’ method of calculation of debt only.