Customs Procedures | A quick guide to using customs warehousing to store the goods and delay duty payments

Introduction

Customs warehousing is a process that enables non-UK products to be stored in the UK duty-free. When the commodities are released into free circulation, duty becomes payable. Additionally, a warehouse may be authorised as a tax warehouse. If the warehouse is not a customs and tax warehouse, excise duty will be charged when the products are received.

Customs warehousing might be advantageous for importers. It provides a storage facility that defers the payment of duty and import VAT until the commodities exit the customs warehousing procedure or enter another customs procedure. Warehouses for customs are managed by warehouse keepers who must be licenced by HM Revenue & Customs (HMRC).

Types of customs warehouse

There are two types of customs warehouses where your products can be stored.

Public warehouse
A public warehouse is operated by a business to store goods from other individuals or companies. They act as a warehouse keeper, while you act as a depositor.

Private warehouse
A private warehouse is one that you operate to store your own items. You are the manager of the warehouse and the depositor.

You do not need to be approved by HMRC to be a depositor in public or private customs warehouse. Still, you will need to be authorised as the warehouse keeper if you manage a private customs warehouse.

Storing your goods in a customs warehouse

You will be accountable for the following:

• Properly declaring your goods – if you use an agent, you must provide them with clear written instructions on how to declare your goods.
• Ensuring that goods are delivered straight to the warehouse specified on your declaration within five days of customs clearance.
• Providing the warehouse keeper with the complete customs declaration.
• Ensuring that the warehouse is approved for the type of goods you wish to deposit. It also includes ensuring that the warehouse can accept chilled, frozen, or special storage requirements such as chemicals. 
• Ensuring that your goods are correctly declared upon removal from the warehouse.

Removing your goods from a customs warehouse

1) Releasing goods to free circulation

When you place warehouse items into free circulation, you are ‘discharging’ or removing them from customs warehousing, and you will be responsible for any duty owing.

To remove the products or declare them to another procedure, you must file a customs declaration. You will receive an electronic notification with the entry number, and you may remove the products once you have completed your declaration.

Additionally, you can remove your products using simplified declarations. If a simplified declaration was used to enter the warehouse, it cannot be used to withdraw the goods.

2) Releasing goods to another customs procedure

No costs will apply if you transfer your products to another customs procedure, such as inbound processing or re-export them directly from the customs warehouse.

3) Moving goods to another customs warehouse

You can move commodities in the following ways:

• within a single authorisation where it covers multiple locations – for example, London and Birmingham
• between different authorisation holders

When transporting items between warehouses covered by the same authorisation, you will not be required to complete a declaration. You will still need to maintain track of the goods’ movement and placement.

When transporting products between various holders of authorisation, you must submit a declaration. Your permission letter will specify the modes of transport permitted.

4) Removing goods as a new finished product

When commodities are removed from a warehouse, they might be classified as individual objects or components of a finished product. The components must be presented in quantities sufficient to produce a specified quantity of finished products.

The goods must have components that are sufficiently advanced to possess the key characteristics of the entire product.

Where a finished product has both UK and non-UK components, the non-UK components must contribute significantly to the finished product’s fundamental character prior to the addition of the UK components.

5) Moving goods to duty-free stores, ships or aircraft

You can transfer commodities from customs warehousing to the following locations:

• Duty-free stores – for passengers on ships or aircrafts departing from the United Kingdom ships and aircraft stores
• For the crew of these vessels departing from the United Kingdom

This is accomplished through the use of commercial documents; a list of required documents will be included in your permission letter.

6) Retail sales in a customs warehouse

Retail sales are permitted in a customs warehouse solely for the following purposes:

• persons who travel outside the United Kingdom
• individuals covered by diplomatic and consular arrangements
• members of foreign organisations
• members of NATO forces
• remote and online clients, where goods are collected and shipped on demand

Paying duty and import VAT

When you release your products to free circulation from a customs warehouse, you must pay any applicable Customs Duty and import VAT.

To determine the amount of duty you must pay, you will need the following:

• quantity of product removed
• tariff value of goods 
• Categorisation of products – This will provide you with the applicable duty rate.

If your items have been sold for export to the United Kingdom or the European Union prior to entering a warehouse, the value is based on that transaction. If in case there have been no sale for export, a sale in customs storage may be made. Utilise the duty and exchange rates in effect at the time of warehouse removal.

Goods reimported in baggage

If the grounds for relief are met, you do not need to file a formal customs declaration to obtain relief on your own personal belongings reimported in accompanying baggage.

You must declare any additional reimported products in your baggage, such as commercial samples, at the red channel or redpoint upon arrival, and UK Customs may require you to submit a formal customs declaration requesting relief.

Postal reimports of goods from outside the United Kingdom

Instruct the sender to clearly mark the package and accompanying customs statement as ‘Returned goods — relief claimed.’ The message must contain a detailed and precise description of the products, their quantity and value.

Useful Resources

Check if you’re established in the UK for customs

Get an EORI number

Check if you need a customs guarantee

Check if you need an import licence

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