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HMRC internal manual

Guidance on the Audit of Customs Values

From
HM Revenue & Customs
Updated
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Meaning of the term 'shown separately'/'distinguished': at the post importation 'verification/audit' stage

Where an element has been excluded from the customs value, it is necessary to examine the validity of the item in question. For example, in the case of interest charges, it is necessary to bear in mind the provisions of Article 33.1(c) of the Code. As a further example, in the case of ‘buying commission’, is the recipient of the ‘commission’ a genuine buying agent?

It is also necessary to check the accuracy of the amount excluded from the customs value. Where it is found that the amount has been under- or over-stated, measures necessary to regularise the situation must be taken (Article 78 of the Code refers).

Deductible elements

Where, during the course of a verification/audit, it is discovered that the price paid or payable for the imported goods includes an element which may be excluded from the customs value, this is to be drawn to the attention of the importer. The importer is to be informed that, in the case of future importations, an appropriate amount for that element may be excluded from the customs value provided that it is ‘shown separately’/’distinguished’.

Retrospective claims

With regard to past importations, the importer is to be informed that it is UK policy not to allow retrospection. Nevertheless, there is no legal bar preventing importers from submitting repayment claims in accordance with the normal rules. Action is then to be taken as below.

Dutiable elements

An audit/verification may reveal that settlement has been made on the basis of an amount in excess of the total price shown on the invoice accompanying the entry. In such instances the importer may claim that the difference relates to a cost element (for example buying commission, interest charges) excludible from the customs value under Article 33. Then it is necessary to consider whether or not the payment or cost is liable to duty and/or import VAT. Normally this involves deciding whether the payment or cost is part of the total payment for the goods under Article 29.3(a) of the Code or an addition to the price under Article 32.

Where it is decided that the previously undeclared payment or cost is liable to duty and/or import VAT, recovery action is to be taken as appropriate under the normal rules.

Where it is decided that the previously undeclared payment or cost is not liable to duty and/or VAT, no action is to be taken.