Inward Processing: Explained
A complete service for businesses considering or operating an Inward Processing authorisation
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A complete service for businesses considering or operating an Inward Processing authorisation
EXPLAINED
What is a
Inward Processing?
Inward Processing (IP), is a customs special procedure eligible businesses can apply to their local customs authorities for permission to use within their own or third-party processing or manufacturing facilities.
It’s primary use is to suspend the payment of import duties and taxes on imported goods which are intended to be repaired, processed or used in the production of a finished product. This can aid businesses in a number of ways and often allows for import duty to be avoided or reduced.
There are numerous advantages to operating an Inward Processing regime. Some of the most common reasons are:
Import duties which have been suspended on goods imported under IP are usually not payable on finished goods which are re-exported after processing.
Equally, if the finished goods have a lower rate of duty than the raw materials, goods which are sold within the UK may be subject to the lower duty rate instead.
To be eligible to reclaim import VAT, the importer of record must have ownership of the goods at the time of import. This creates a significant compliance risk for businesses who import goods for repair or processing, but are providing a service on behalf of the owner.
IP can be used to suspend duty and taxes and help manage VAT liability on temporary imports.
Businesses importing materials, parts and components (raw materials) which are used to assemble or manufacture a new product (finished goods) can use IP to suspend import duties and taxes on the raw materials.
The authorisation holder can elect whether duties are payable on the finished goods or raw materials after the production of the goods, creating both a cash-flow benefit and potential duty saving.
Businesses from all sectors can benefit from the use of a Inward Processing.
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"We truly appreciate the support BKR provided us on a preferential origin project. Their support allowed for a significant step forward in unlocking further duty savings for Brooks Sports."
Tineke Guerrero Meeuws
Director of Trade Compliance
There are several key considerations for any business thinking of implementing an Inward Processing regime. Some of the key topics our advisors discuss during the scoping phase of the project are:
Three services that cater for all businesses, whether you are still researching the benefits of a Inward Processing or need support with the management of an existing one.
Unsure if Inward Processing is right for your business?
For businesses wishing to explore the use of IP without committing, a F&E assessment is a low-budget way of identifying what the advantages and key considerations are. It allows a proof of concept and a model of potential savings to be produced to aid decision makings.
What this includes:
Full end-to-end project management from an expert customs advisor.
Full end-to-end project management, taking your application from concept to approval. Support covers the design and drafting of standard operating procedures, software recommendations, site visits, application drafts and fully supported engagement with HMRC.
What this includes:
The benefits of an Inward Processing regime without the stress of managing it
If you require continued support implementing your regime, such as staff training, compliance management, record auditing, record-keeping, brokerage, ad-hoc advisory or Bill of Discharge management BKR provides bespoke aftercare packages to allow full or part-time outsourcing to an expert customs project manager.
What this includes:
All our projects are bespoke and consist of a tailormade scope based on a client's specific requirements. As such, the blueprints below are indicative and have been provided for comparison only.
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Still not sure or looking for support with something not listed? Schedule a FREE consultation with one of our advisors to discuss your business's specific requirements.
"With BKR’s support, we are able to utilise customs special procedures within our UK manufacturing projects. Their input has allowed us to grow our UK production and maximise profitability whilst doing so."
Sarathe Natarajan
Import Manager
Empowering our clients to focus on what makes them succesful.
BKR Consultants Ltd provides professional and practical guidance on all matters associated with customs clearance, customs compliance and supply chain efficiency.
Our primary goal is to work with our clients to achieve an optimal budget for import duty, all the while mitigating compliance risks for the business.
We achieve this by delivering strategic customs guidance and leveraging expert customs resources, to fulfil a capability many businesses find challenging to develop internally.
Our team possesses expertise across diverse areas, including health and regulatory affairs from APHA, extensive experience in large business unit management within HMRC, customs brokerage, and leadership roles within large multinational businesses and member associations.
Let us know a little bit about how we can help and one of our customs experts will be in touch to arrange a consultation at the next mutually convenient date.
Contact us using the details below, or simply fill out the contact form:
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