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End Use procedure changes

End Use procedure changes

New HMRC guidance on the application of End Use relief will impact businesses who import goods when the use or end destination is not known.

Claire Angell

Partner and UK Head of Tax, Energy

KPMG in the UK


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In January HMRC published Customs Information Paper (CIP) 33 which changes the application of End Use relief with effect from 31 July 2018. The changes will lead to an increased administrative burden for many businesses and the potential imposition of Import VAT and customs duty. Businesses should review current arrangements in relation to End Use relief to understand the impact of the new guidance and prepare for the practicalities of managing the upcoming changes.

The EU’s guidance in this area was amended in November 2017 in seeking to achieve common interpretation in all Member States. One of the technical changes published means that the assignment of the goods to the prescribed End Use must (physically) take place within the EU. However, both the EU legislation and the updated guidance state that the End Use procedure may be discharged by exporting goods. Such export should be approved by the customs authority.

However, CIP 33 states that HMRC will not issue an authorisation for End Use relief where assignment of the goods outside the EU is planned. In addition to CIP 33, HMRC updated their UK End Use guidance which now suggests that End Use cannot be discharged by exporting the goods outside the EU. According to the guidance, where such ‘assignment’ outside the EU is envisaged, it is suggested that the goods may, for example, instead be placed under customs warehousing or temporary storage pending re-export to avoid EU duties.

In our view, HMRC’s guidance may not be in accordance with the applicable Union Customs Code legislation. The EU guidance only ‘suggests’ that the goods should be placed under a different procedure if the assignment to the prescribed use will take place outside the EU.

We believe that if HMRC’s interpretation is as strict as appears, it may pose a significant burden and cost because it does not provide the flexibility to simply export goods placed under End Use without payment of duty. This is particularly important where the use or destination is unknown at the time of import, or where the goods may be split amongst uses and destinations.

For further information please contact:

Claire Angell

Patrick Smith

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