Valuation

David again with the dull stuff.

In the event of a hard Brexit, Customs declarations will be required toget your goods through Customs, be it for import of export.

A previous post outlined the concept of classification.  This is key to driving the correct taxes to be offered and also to define whether goods are subject to any form of control or prohibition.  In other words, whether you need permission from the authorities to export or import the goods.

Of equal importance is ‘Valuation’. This defines how you determine the correct value of the goods for Customs purposes.  This is not a simple as what is on the commercial invoice –  oh no, that would be far too obvious and easy!  I refer you again to the following government advice:

If you export to EU countries, please see:  https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit/preparing-for-a-no-deal-eu-exit-step-by-step-guide-to-exporting

If you import from EU countries, please see: https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit/preparing-for-a-no-deal-eu-exit-step-by-step-guide-to-importing

On the matter of Valuation, this guide states the following:

  • The value of the goods is necessary to determine the level of customs duty applicable.
  • The value is also used for trade statistics.

You arrive at the value of the goods by using one of 6 ways or ‘methods’.

It is important to note that you must try Method 1 before going on to Method 2 and so on.

Method 1 is based upon the transaction value.

This is the price paid or payable by the buyer to the seller for the goods when sold for export to the UK in accordancewith specific rules.

These rules, along with the other methods of valuation, can be found in Notice 252.

Sounds simple,  don’t be fooled.  Take a look at the scary Notice 252.  The transaction value is just the starting point.  Depending on the Incoterms [International Contract Terms – which define who is paying for what], various additions must be made for all sorts of reasons, such as transport costs, insurance premiums, tooling, royalties and on and on it goes.  Some additions are liable to import duty and VAT, some to VAT only.  Some items are exempt.

The bad news – it is your responsibility to get these right and tell your freight forwarder or Customs clearance agent what needs tobe added to the declaration.  The betternews – we can help you with non-binding advice.

Have you completed your EORI application yet?

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