The Customs (Import Duty) (EU Exit) Regulations 2018

CHAPTER 5 U.K. Methods of valuation

Modifications etc. (not altering text)

C1 Pt. 12 applied (with modifications) (31.12.2020) by The Customs (Northern Ireland) (EU Exit) Regulations 2020 (S.I. 2020/1605), regs. 1(1), 32; S.I. 2020/1643, reg. 2, Sch.

Method 1 valuation U.K.

119.  The general rule of valuation provided by section 16(2) of the Act is the “Method 1 valuation”.

Commencement Information

I1 Reg. 119 in force at 31.12.2020 by S.I. 2020/1643, reg. 2, Sch.

Method 2 valuation U.K.

120.—(1) “ Method 2 valuation” means the valuation of chargeable goods M1 presented to Customs on import determined by the valuation method in paragraph (2).

(2) The valuation method is—

(a) identify the transaction value of identical goods sold for export to the United Kingdom within the 90 day period; and

(b) apply that value to the chargeable goods as the value of the goods which applies immediately before they are released for free-circulation M2 .

(3) The identification is to be made in accordance with regulation 122.

Commencement Information

I2 Reg. 120 in force at 31.12.2020 by S.I. 2020/1643, reg. 2, Sch.

Marginal Citations

M1 “Chargeable goods” is defined in section 2 of the Act.

M2 See section 3(3)(a) of the Act on the free-circulation procedure.

Method 3 valuation U.K.

121.—(1) “ Method 3 valuation” means the valuation of chargeable goods presented to Customs on import determined by the valuation method in paragraph (2).

(2) The valuation method is—

(a) identify the transaction value of similar goods sold for export to the United Kingdom within the 90 day period; and

(b) apply that value to the chargeable goods as the value of the goods which applies immediately before they are released for free-circulation.

(3) The identification is to be made in accordance with regulation 122.

Commencement Information

I3 Reg. 121 in force at 31.12.2020 by S.I. 2020/1643, reg. 2, Sch.

Method 2 and Method 3 valuation: identification of transaction values U.K.

122.—(1) The identification of the transaction value of identical goods or similar goods sold for export to the United Kingdom within the 90 day period must be based on a sale of such goods which—

(a) is made by the same seller as the seller of the chargeable goods or, where no such sale exists in the 90 day period, is made by a seller who is in the equivalent position in the supply chain as the seller of the chargeable goods;

(b) is made to the same buyer as the buyer of the chargeable goods or, where no such sale exists in the 90 day period, is made to a buyer who is in an equivalent position in the supply chain as the buyer of the chargeable goods;

(c) is the nearest in time to the time the chargeable goods are imported; and

(d) is of an equivalent quantity as the sale of the chargeable goods.

(2) If more than one such sale is identified, the sale which produces the lower or lowest valuation is the transaction value to be applied.

Commencement Information

I4 Reg. 122 in force at 31.12.2020 by S.I. 2020/1643, reg. 2, Sch.

Method 4 valuation – other than goods to which regulation 124 applies U.K.

123.—(1) “ Method 4 valuation” means, subject to paragraph (2), the valuation of chargeable goods presented to Customs on import which is determined by the following steps.

(2) Paragraph (1) does not apply to goods to which regulation 124 applies.

(3) Step 1: identify whether or not there is a sale of the chargeable goods which occurs within the period of 90 days which begins immediately after the date on which the chargeable goods are imported into the United Kingdom and proceed to step 2.

(4) Step 2: if—

(a) there is a sale, proceed to step 3; or

(b) there is no sale and—

(i) step 7 has not already been applied, proceed to step 7;

(ii) step 7 has been applied, proceed to step 8, unless step 8 has already been applied;

(iii) step 8 has already been applied, cease to use Method 4 valuation.

(5) Step 3: identify the earliest sale and exclude any sale where the buyer and seller of the goods are related persons and—

(a) if that leaves no sale, repeat step 2, beginning at paragraph (b); or

(b) otherwise, proceed to step 4.

(6) Step 4: exclude any sale where the quantity sold is insufficient to give a representative quantity in order to determine a unit price and—

(a) if that leaves no sale, repeat step 2, beginning at paragraph (b); or

(b) otherwise, proceed to step 5.

(7) Step 5: include and exclude, as the case may be, as elements of the sale such of the specified matters which are not already taken into account as elements of the sale and proceed to step 6.

(8) Step 6: use the total sale value obtained by step 5 to determine the unit price of the goods and apply that unit price to all of the chargeable goods as the value of the goods which applies immediately before they are released for free-circulation.

(9) Step 7: repeat step 1 but as if the reference to “chargeable goods” were instead a reference to “similar goods which have not been processed”.

(10) Step 8: repeat step 1 but as if the reference to “chargeable goods” were instead a reference to “similar goods which have been processed” but only if the amount of the value of the processing carried out to the goods can be determined.

(11) Where step 5 applies after the application of step 8, the amount of the value of the processing carried out to the goods is to be deducted in identifying the unit price of the sold goods.

Commencement Information

I5 Reg. 123 in force at 31.12.2020 by S.I. 2020/1643, reg. 2, Sch.

Method 4 valuation – fresh fruit and vegetables U.K.

124.—(1) This regulation applies to chargeable goods presented to Customs on import which are fresh fruit and vegetables meeting the description and with the commodity codes set out in the document, “Fresh fruit and vegetables under Method 4 valuation, version 1, dated 27 November 2018 M3 ”.

(2) The valuation of the goods is to be determined by reference to the wholesale price of the goods at the date of import, being the price as set out in a notice published by HMRC.

(3) The notice must set out the wholesale price as a unit price for 100 kg of the goods and the period to which the price applies.

(4) For the purposes of setting out wholesale prices in the notice, regard must be taken of wholesale prices from a representative sample of wholesale markets operating in the United Kingdom and the prices set out in the notice must be kept up to date.

Commencement Information

I6 Reg. 124 in force at 31.12.2020 by S.I. 2020/1643, reg. 2, Sch.

Marginal Citations

M3 Available from: https://www.gov.uk/government/collections/customs-vat-and-excise-regulations-leaving-the-eu-with-no-deal. A hard copy is available for inspection free of charge at the offices of HMRC at 100 Parliament Street, London, SW1A 2BQ.

Method 5 valuation U.K.

125.—(1) “ Method 5 valuation” means the valuation of chargeable goods presented to Customs on import which is determined by the valuation method in paragraph (2).

(2) The valuation method is—

(a) identify—

(i) the cost of producing the goods and the cost of the container and packaging of the goods;

(ii) the costs of transport and insurance of the goods, up to the time the goods are imported into the United Kingdom;

(iii) loading and handling charges of the goods, up to the time the goods are imported into the United Kingdom;

(iv) the amount of expenses usually incurred in enabling comparable goods to be sold in the place of export of the goods; and

(v) the amount of profit usually arising on a sale of comparable goods in the place of export of the goods;

(b) total the costs, charges and amounts in sub-paragraph (a); and

(c) apply that total as the value of the chargeable goods which applies immediately before they are released for free-circulation.

(3) The cost of producing the goods must include the cost of each item listed in paragraph (4) which is provided outside of the United Kingdom in relation to the production or development of the goods, if the cost of the item is charged to the buyer.

(4) The items referred to are—

(a) artwork;

(b) designs;

(c) development services;

(d) engineering work or services; and

(e) plans or drawings.

(5) Paragraph (3) applies to an item even if it is not intended to be used by the buyer in the processing, use or disposal of the goods.

(6) Where goods are transported by air, the cost of the air transport is the percentage of that cost as set out in the document, “Air Transport Costs to be included in the customs value, version 1, dated 27 November 2018 M4 ”.

Commencement Information

I7 Reg. 125 in force at 31.12.2020 by S.I. 2020/1643, reg. 2, Sch.

Marginal Citations

M4 Available from: https://www.gov.uk/government/collections/customs-vat-and-excise-regulations-leaving-the-eu-with-no-deal. A hard copy is available for inspection free of charge at the offices of HMRC at 100 Parliament Street, London, SW1A 2BQ.

Method 6 valuation U.K.

126.  “ Method 6 valuation” means the valuation of chargeable goods presented to Customs on import which is the value determined by applying—

(a) such of the elements of valuation used in any other method of valuation in this chapter; and

(b) the principles for the valuation of goods adopted by the WTO in the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 M5 ,

as are reasonable to apply in order to determine the value of the chargeable goods immediately before they are released for free-circulation.

Commencement Information

I8 Reg. 126 in force at 31.12.2020 by S.I. 2020/1643, reg. 2, Sch.

Marginal Citations

M5 Available from: http://www.wcoomd.org/-/media/wco/public/global/pdf/topics/valuation/instruments-and-tools/gatt/arti7_gen_agreemt.pdf?db=web. A hard copy is available for inspection free of charge at the offices of HMRC at 100 Parliament Street, London, SW1A 2BQ.