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HMRC internal manual

Guidance on the Audit of Customs Values

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HM Revenue & Customs
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Treatment of storage and related expenses

Introduction

No distinction is to be made between ordinary storage warehouses and customs warehouses. The valuation treatment of storage expenses is the same in either case.

Situations regarding storage in which a valuation question may arise include the following:

The goods are in storage abroad at the time of the sale for export to the EC

Ownership of the goods remains with the seller. Thus normally the storage expenses will be recovered by the seller as part of the price actually paid or payable by the buyer. If not, these expenses are to be included in the customs value if they constitute a payment made directly or indirectly to the seller or for his benefit.

The goods are put into storage abroad subsequent to their purchase but prior to their export to the EC

At this stage the buyer owns the goods. Expenses incurred by the buyer after purchase cannot be considered as a payment made directly or indirectly to the seller or for his benefit. Such expenses represent activities undertaken by the buyer on his own account. The cost of these activities is to be added to the price actually paid or payable for the imported goods but only if Article 32 of the Code provides for adjustment in respect of them. As no such provision exists, the storage expenses are not to be included in the customs value.

The goods are put into storage in the EC prior to their clearance to free circulation

The cost of warehousing and of preserving goods while they remain in a customs warehouse are not to be included in the customs value (Article 112.1 of the Code refers). This is subject to the proviso that the cost is shown separately from the price actually paid or payable for the goods (see GACV11000).

The goods are temporarily stored incidental to their transport

This would cover situations where, for example:

  • storage expenses are incurred at the port of export pending the arrival of the exporting vessel and
  • a period of time elapses between the unloading of the goods and the lodging of the customs declaration. During this period, the goods are stored under customs control thus incurring storage expenses.

Expenses of this kind, arising out of incidental storage of goods during transport, are to be regarded as charges associated with the transport of goods. Thus the rules relating to the valuation treatment of transport costs are to be applied as appropriate.

Further guidance on this subject is provided in WCO Comm 7.1.