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HMRC internal manual

Guidance on the Audit of Customs Values

Additions for freight and insurance costs: insurance, premiums and apportionment of premium


The inclusion of insurance in the customs value is limited to insurance costs incurred for the goods during their transportation, loading, unloading and handling (WCO AO 13.1 refers).

Insurance premiums

Any insurance premium including suitably apportioned global policies, incurred for the transport of imported goods is to be included in the customs value. There is a risk that insurance costs are omitted on the import documentation because the importer has failed to advise his agent of the details which may include a group policy.

Cases have arisen where goods are invoiced on delivery terms, whereby the seller has to procure insurance against the buyer’s risk of loss of or damage to the goods during carriage, but the buyer also procures insurance. Thus there is a ‘double’ insurance situation. However, in the event of loss or damage, legally only one claim can be made. Consequently only the cost of the seller’s insurance is to be included in the customs value. The additional buyer’s insurance is a form of reassurance in case of default on the seller’s insurance rather than an insurance cost relating to the goods.

Apportionment of premium

When insurance covers transport after introduction into the EU, apportionment of the premium is allowed if the actual costs can be distinguished.