We currently import raw material from the U.S. which is then reworked and distributed throughout the EU under free trade agreement. We pay Duty and VAT upon importation into the UK; Will our customers in the EU then have to pay additional Duty ?
In the event that the UK leaves the EU without a deal many UK businesses will need to apply the same processes to EU trade that apply when trading with the rest of the world (RoW). There are a number of existing customs procedures and simplifications currently used when trading with the rest of the world, which you can use (where appropriate) to make customs processes easier and give you a cash flow advantage.
From what you have said it would appear that the ‘Inward Processing’ (IP) customs procedure may be appropriate to your circumstances. IP would (subject to authorisation for the procedure) allow you to suspend customs duty and import VAT on goods that you import into the UK in order to be processed. You can then export the processed goods to EU and RoW without paying duty or VAT.
We are not expecting major changes to the inward processing system. However, for at least 12 months after the UK leaves the EU, there will be suspension of the mandatory requirement for businesses to provide a guarantee in order to be authorised to declare goods for inward processing and several other procedures. Additionally, we will commit to provide 12 months’ notice if the requirement is to be re-introduced.
The customs treatment of the processed goods exported from the UK into the EU will be a matter for the EU. HMRC advise businesses to consult Member States' customs authorities when looking for guidance on meeting EU27 requirements.
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