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HMRC internal manual

Guidance on the Audit of Customs Values

Toxic waste


Importers specialising in the treatment and disposal of toxic and hazardous wastes sometimes import, specifically for destruction, wastes which are subject to ad valorem duty. In many cases the imported materials will be the residue of products previously sold by the importer and destruction of the residue will have been agreed upon in the original contract of sale.

For such importations invariably the overseas trader makes the only payment involved to the importer for his services in destroying the waste. The overseas trader usually bears the full cost of transport and insurance from his premises to that of the importer, either directly or indirectly. Where the importer appears to bear the cost of transport and insurance (the cover is not normally against loss or damage to the goods but against third party claims for loss or damage caused by the goods) this is usually because the imported goods are the residue of goods previously exported by the importer to an overseas trader. The cost of transport, insurance and destruction of the imported residue will have been costed into the selling price of the original goods.

Customs value

As the value of these importations cannot be established under Methods 1 to 5, Method 6 must be used.

Following discussions on the subject the CVS concluded, ‘having regard to the exceptional circumstances a “token” value can be applied to the wastes for customs valuation purposes’. The inference was that such goods have little or no commercial value. In these circumstances the cost of transport, handling and insurance should not be included in the dutiable value, (see GACV45050 for further details).

In most cases the importer’s valuation of the wastes can be accepted but care must be taken where the importer gains ‘side-benefits’ from processing of the waste products after importation (for example using the waste as a fuel for heat or power). Such gains should be taken into account when arriving at an acceptable value for duty purposes (for example the value could be determined by reference to estimated savings in fuel costs).