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HMRC internal manual

Guidance on the Audit of Customs Values

Royalties and licence fees: third party royalties

When a buyer pays a royalty to an unrelated third party such a payment can only be considered to be made as a condition of the sale when the seller (or person related to the seller) requires the buyer to make that payment. Where such a payment is not considered to be made as a condition of sale, no part of the royalty or licence fee is ever to be included in the customs value even when it clearly relates to the imported goods.

The position must be resolved in each individual case on the basis of the best information obtainable, but cases will vary considerably in complexity (CVS Conclusion 24 provides guidance).