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HMRC internal manual

Guidance on the Audit of Customs Values

Processed film, video, cinematographic and sound recordings: processed film: example case study

A mail order company established in the UK sent a film crew to the US to provide material for the company’s catalogue. The resulting exposed film was processed in the US and subsequently brought back to this country in the film crew’s baggage.

Customs value was established under Method 1 on the basis of the cost of processing in the US plus the cost of the unexposed film itself.

While it could be argued that there has been no sale for export that is, the seller is selling his services rather than his goods, taking account of WCO Advisory Opinion 1.1 it was decided to take the opposite view.

Under Method 1 an addition can be made to the price actually paid or payable only in respect of the value of those goods and services specified in Article 71 of the Code. The activities of the film crew in question cannot be regarded as so specified.

Were the goods to have been valued under the fall back method, the value attributable thereto, as opposed to the cost of obtaining the image which appears on the film and on the prints taken therefrom, could only be nominal (taken on the same basis as applies to ‘master’ tapes or prototype machines etc).