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HMRC internal manual

Guidance on the Audit of Customs Values

HM Revenue & Customs
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Cases involving fixed exchange rates - examples: Case study 2


Goods are purchased by a UK company from Japan via Belgium. All three companies are related. The invoice to the UK is in Belgian francs, but an unwritten agreement provides for settlement to be in sterling at a fixed rate of exchange. Both the sterling and franc amounts appear on the invoice. The trader was declaring the franc amount and converting at the official customs rate of exchange.


The value to be declared is the sterling amount calculated by the fixed rate of exchange. Whilst the fixed rate was not written into the contract, it was still a legally binding term of the sale. The customs value has to be recalculated based on the fixed rate.