Duty savings for UK manufacturers

UK manufacturers may be interested to know that on 1 June, a two month window opens for applications for the suspension of UK customs duty on imported materials.

Duty suspension helps UK manufacturers remain competitive in the global marketplace, by suspending completely or partially import duties on certain goods used in domestic production – ie raw materials or semi-finished components, where those goods are not manufactured in the UK. A duty suspension can deliver significant duty savings for UK manufacturers using imported materials.

Existing suspensions which have been rolled over from the EU regime will be extended beyond 31 December 2021. (provided they came into force before, or as part of, the EU’s July 2020 update to ensure continuity for UK businesses).

Similarly to the EU’s procedures, the UK will accept applications during two application rounds per year.

The first UK application window is from 1 June 2021 to 31 July 2021.

Criteria

1. Applicants must show that they would have saved at least £10,000 in duties if the suspension had been in force in 2020 - you can provide 2019 data if your business has been impacted by COVID-19.
2. The request is not for a product that is traded between related parties, in circumstances which would mean other UK or Crown Dependency businesses cannot benefit from a suspension.
3. The product or substitutable products are not produced in the UK or Crown Dependencies, only produced in limited quantities, or production is temporarily insufficient.
4. The product will be used in a production process or there is a specific temporary need for the product.

• A list of the applications made will be provided on the gov.uk/HMRC page once the application window has closed. UK and Crown Dependency businesses will be able to object to any requests if the removal of customs duty harms their UK production.
• Objections will inform the assessment of the applications, but will not automatically lead to the rejection of a suspension request.
• Suspensions granted as a result of the application process are expected to come into effect no earlier than early 2022 and apply until Summer 2024, and can be renewed ahead of expiry.

When a suspension is granted, it is available to all importers, and is not exclusive to the applicant.

Please speak with Crowe’s VAT and Custom Duty services team for further information.