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HMRC internal manual

Guidance on the Audit of Customs Values

Method 4: practical application

It is accepted that there are practical difficulties in applying the deductive method. Particular problems arise where:

  • an importer imports a wide range of products for sale in the EC to unrelated customers in different quantities and at varying prices
  • the importer’s business covers a wide range of activities in addition to importing and selling the goods to be valued
  • the goods to be valued are not sold in the same state but are subject to major processing after importation and
  • market conditions are particularly volatile.

Consequently it is very important that there is dialogue between Customs and importers intending to apply this method. There must be a clear understanding as to how the importer will meet the requirements of the relevant legal provisions as well as the evidential requirements. Experience has shown that there is nothing to be gained by imposing the use of Method 4 on an importer, where its application will be an unwelcome administrative burden. In such circumstances it is preferable for all concerned to agree that this method is unworkable and move to an alternative method of valuation.