What are Duty Relief Schemes for Freight Forwarding

Importing products to the UK can be costly – and complicated too. Upon arrival at the border, businesses should expect to pay both UK duty and VAT. While unavoidable in many cases, there are options available to businesses to help reduce the amount of duty and tax paid, these include duty relief schemes. By reducing the money spent on tax and duties, a business can assign funds to other areas of its operation – maximising efficiency and overall profit.

In this article from Allegro Freight Forwarding, we discuss duty relief schemes – noting what they are, what varieties and options are available as well as noting some of the benefits of utilising duty relief schemes.

For more informative articles related to freight forwarding and logistics, visit our blog – existing articles include: The Beginners Guide to Cargo Insurance, How Do Bank Holidays Affect Freight Forwarding and How to Choose the Right Freight Forwarder.

Goods imported into the UK from outside of the UK are subject to customs duty and VAT – unless an import is a candidate for some form of relief or duty suspension. If goods are not appropriately paid for, HMRC may not release goods into the possession of a business or organisation – so it’s important to have a secure understanding of how duty relief schemes work and if they apply to a particular import.

Put simply, duty relief schemes allow businesses to pay less duty on items they import. Depending on the details of an import – such as the purpose of your import, what it is and where it’s coming from, a business may be eligible for several schemes.

Depending on these factors, an import might be eligible for certain types of tax relief. With the wide variety of imports arriving in the UK each day – our varying Tax and Duty relief schemes grant businesses access to tax and duty relief that is tailored to their import.

Learn more about the documents you need for international shipping >

What Options are Available?

 As previously noted, there are several varieties of duty relief schemes. These include temporary admission, customs warehousing and community systems of duty relief, as well as outward processing and inward processing.

Temporary admission is a suitable option for goods that are being brought into the UK on a short-term basis. Examples of this might include importing products for a time-limited event such as a conference or exhibition. In many instances, temporary admission relief gives businesses access to total or partial relief from import duties.

While Customs warehouses are not a scheme as such, they do allow businesses importing products to reduce the amount of goods duty and VAT paid. Customs warehouses allow businesses to store goods duty and VAT-free until they are ready to leave the warehouse.  

Community system duty relief may apply to products that are being imported for educational, scientific or cultural purposes, such as awards or decorations. Under these circumstances, those importing goods may be able to claim duty and VAT back.  

Inward processing is a duty relief procedure available to businesses importing products. Inward processing relief can be claimed when importing goods from outside of the EU, with the intention of processing and future exporting. 

Outward processing allows businesses to export their goods to a non-EU country to be repaired or processed and returned upon completion with full or partial duty relief.  

In addition, businesses importing goods that are unfinished or will be used as materials can claim duty relief on the basis of the material’s intended use – with such products being eligible for duty suspensions and tariff quotas. This relief mainly applies to shipments of goods that are not available for purchase in the UK or fulfil certain quantity requirements when purchased from within the EU.   

Discover the importance of an import export certificate > 

Reduced Costs – By reducing the amount of money spent on import duties and taxes, businesses benefit from overall reduced operational costs. By reducing these costs, businesses are able to invest the saved funds directly into improving and optimising other areas of their business – maximising overall profits.  

Greater Import Freedom – In addition to helping businesses save money on their imports, reducing the import penalties associated with bringing products and materials into the UK grants businesses access to a wider breadth of product sourcing opportunities. Not only might this maximise a business’ access to certain products, but better deals from suppliers too.  

Opportunities simplified – In addition to saving money, clear procedures regarding duty relief take the guesswork out of a business’ import management. These schemes ensure businesses understand what they are eligible for, increasing the likelihood of uptake of available support.  

Feeling Supported – Without incentives such as duty relief schemes, many businesses may choose not to import products and materials from outside of the UK. The implementation of duty relief schemes signals to businesses that import logistics are actively working to help them access products from outside the UK, generating a greater sense of support for UK businesses.   

Allegro Freight Forwarding are experienced freight forwarders offering tailored end-to-end solutions for businesses. Our range of services support air, sea, road and rail freight – covering all the bases to help your assets reach their destination quickly and reliably. In addition, our services also provide support with import and export as well as wider management.  

The team at Allegro Freight Forwarding helps take the hassle out of freight management while granting you peace of mind that your shipments are in safe hands. For more information about our services and how we can support your business, contact us today. To read more informative articles, visit our blog.