Someone please help, I am drowning in customs bureaucracy

[arelec]

I run a very small UK electronics company and as part of our activities, we repair caravan related electronic equipment. It is very neiche and get alot of interest from UK and overseas customers who wish to send us specific products which require repair and return. Most of the shipments come from ordinary members of the public from europe via Royal Mail, DHL, UPS or Fedex. In general we ask that customers send the goods "For repair and return" on the CN22 / CN23 and associate a low monetary value (25 Euro) as the goods are often non working. However this request is seldom taken on board and they often associate customs valuations in line with brand new replacement valuations of around 500 Euro (maybe to satisfy some insurance or claims related reasoning if the goods go missing). This gave rise to demands of import VAT duty which was a burden for us and the customer. I would normally not pay the VAT (and associated admin charges) and after 3 or 4 weeks the goods were returned to the customer unrepaired, obviously not a good customer experience. I decided to apply for HMRC Inward Processing authorisation, and, despite me not understandng most of the terminology, we have been granted full authorisation for Inward Processing special procedures. Despite many hours of researching and trying to understand my responsibilities, I just cannot get my head around whether I need to file all special procedures via CDS (of which I have no access) or just submit my own paperwork schedule of records of individual imports and re-exports of the goods along with the BOD form. To put this into perspective the realistic import value of the non working goods is on average £30 (Despite customers declaration of £500 for a brand new replacement), we charge typically £100 to repair and we probably get 30 overseas repairs per month but 80% of them are declared with a low value so do not present a problem. I really do not know what to do with the IP authorisation as it seems too much hassle to bother with. I'm prepared to pay someone to give me some honest advice if there is an easy way to administer these imports.

 

[Customs Geek]

Hi

The courier companies already make declarations onto CDS so you need to ask your customers to quote your IP number as well as say the goods are for repair and return when they book the shipment. It’s generally no good just putting it on the package as no one will look . The couriers deal with hundreds of thousands parcels and speed if their priority.

The post office is different as they are not required to make declarations into CDS unless the packets are over a certain value or some special treatment is required such as IP. Again your customers need to mention your IP authorisation number.
similarly when you reexport the repaired item you need to request export of repaired goods . Your authorisation will tell you the customs procedure codes to use.

You should under all circumstances make sure that the goods are valued correctly using the customs valuation rules - you would normally need to demonstrate how you do this as well as how you intend to keep your records when you applied for the procedure.

You must complete the Bill of discharge on time and accurately as HMRC may still make you pay any suspended duties and taxes.

Unfortunately this is another consequence of Brexit and the VAT rules. You haven’t mentioned whether you are VAT registered or not . Even if you are VAT registered you are not permitted to reclaim import/ input VAT if you are not the owner or will be the owner of the goods. So unfortunately only option s are to pay the import VAT or use the IP scheme.

 

[arelec]

Hi

The courier companies already make declarations onto CDS so you need to ask your customers to quote your IP number as well as say the goods are for repair and return when they book the shipment. It’s generally no good just putting it on the package as no one will look . The couriers deal with hundreds of thousands parcels and speed if their priority.

The post office is different as they are not required to make declarations into CDS unless the packets are over a certain value or some special treatment is required such as IP. Again your customers need to mention your IP authorisation number.
similarly when you reexport the repaired item you need to request export of repaired goods . Your authorisation will tell you the customs procedure codes to use.

You should under all circumstances make sure that the goods are valued correctly using the customs valuation rules - you would normally need to demonstrate how you do this as well as how you intend to keep your records when you applied for the procedure.

You must complete the Bill of discharge on time and accurately as HMRC may still make you pay any suspended duties and taxes.

Unfortunately this is another consequence of Brexit and the VAT rules. You haven’t mentioned whether you are VAT registered or not . Even if you are VAT registered you are not permitted to reclaim import/ input VAT if you are not the owner or will be the owner of the goods. So unfortunately only option s are to pay the import VAT or use the IP scheme.

Thanks for your detailed response however I still have some queries.
1. You say "

"you need to ask your customers to quote your IP number as well as say the goods are for repair and return when they book the shipment. It’s generally no good just putting it on the package as no one will look ."

Unless I am mistaken, the only option they have is to fill in the CN22 on the package as they send it, so real option apart from effectively writing the IP Number on the package so I am not sure whether the IP number has been looked at and registered at point of importation

2. Similarly when we come to re-export using royal mail online labels, there is no option as such to put our IP Authorisation number unless it is somehow incorporated into the IOSS field on the Royal Mail portal. The only option we have is to choose the "Customs Declaration Category" for which we choose "Returned Goods" from a fixed list of options.

3. I am also confused about the degree of record keeping required. The Authorisation letter does describe what information is to be recorded, so is it just a case of submitting a print out of our "in house" records for each import/export under the procedure alongside our Bill Of Discharge returns. As I do not have access to the CDS system, I am unsure whether I need this or not.

 

[Customs Geek]

Hi

I think you need much more help than can be provided in the forum. I suggest you look for a customs consultant to help you.

IOSS is a VAT simplification and not in any way connected to customs special procedures.
It is very difficult because of their operational limitations when using post and fast parcel couriers and customs special procedures. You may need to contact the post office for assistance on how to complete the export declaration.

Hardly any importers or exporters have direct access to CDS so you always need to request the courier sends you a copy of the customs clearance which they do not do automatically.

A printout of you commercial record alone is not adequate for IP reporting.

 

[arelec]

OK thank you