DID YOU KNOW… About the changes to UCC starting May 1st 2016

UNION CUSTOMS CODE

ONE OF THE MOST SIGNIFICANT CHANGES IS TO INWARD PROCESSING RELIEF from 1st May 2016

Background

The current European Union Customs regulations will be replaced by the Union Customs Code with effect from 1st May 2016. Along with the associated implementing and delegated regulations the UCC will replace the current regulations which have been in force since 1992/93.

Changes to Inward Processing Relief

From 1st May IPR will become one of the Special Procedures which replace the current CPEI (Customs Procedures with an Economic Impact), and will be re-named Inward Processing.

Simplified Authorisations, such as SIPR, will become Authorisation by submission of a Declaration for a Special Procedure. Effectively the import declaration submitted on your behalf acts as your application for IP authorisation on a transactional basis, in the same manner as SIPR operates now.

Financial security for Inward Processing

The Union Customs Code makes it a mandatory requirement that any potential duties are secured by a financial guarantee.

Unless you already have an IPR authorisation or bank guarantee in place for Inward processing your options will be to;

  • Obtain a full authorisation
  • Obtain a bank guarantee for individual transactions.
  • Provide security in the form of a cash deposit for the amount of potential duties, which will be refunded following only following appropriate re-export or approved disposal.
  • Provide a deposit payment via your duty deferment account.
  • Authorise your nominated carrier to provide HMRC with a deposit, which will be payable prior to delivery or receipt of invoice for account holders.
  • Consider outright payment of the duties.
    • This could be especially appropriate if only import VAT, or small amounts of duty are involved.
  • Only secure duty amounts, as import VAT which is paid outright is recoverable as input tax by VAT registered traders. Limit to availability of simplified authorisation (Authorisation by submission of a declaration) 
  • In addition to the above, HMRC have advised that the availability to use the simplified authorisation procedure will be limited to 3 times a year for each operator. This means that if you need to import goods for inward processing, or use other simplified authorisations, more than 3 times a year your will need to obtain an IP authorisation. 

Transitional Arrangements

If you already have an approval, you may operate without a guarantee until this approval expires.

Re-approval after 1st May 2016 will be under UCC conditions. Inward Processing authorisations issued under Union Customs Code conditions will be subject to a bank guarantee.

Applications for authorisation under current conditions will not be accepted by HMRC after 1st April 2016

Guarantee waivers are available on a sliding scale dependant on your level of compliance with Approved Economic Operator conditions, with 100% waiver available for operations to full AEO Customs Simplifications standards.

What do I need to do

If you have a need to continue importing goods under IP arrangements for processing after 1st May 2016, you will need to consider the implications that the changes detailed above will have on your business.

Further information

https://www.gov.uk/guidance/introduction-of-the-union-customs-code-ucc#inward-processing