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Benefits of PGS's Bonded warehousing facility
BENEFITS OF CUSTOMS/BONDED WAREHOUSE
There are a number of benefits of a Customs warehouse:
Delayed payment of VAT and duty on imported goods
Goods can be stored in a customs warehouse indefinitely and duty and VAT will only become payable
at the time that goods leave the warehouse and enter free circulation in the UK.
If goods are imported into free circulation in the UK and then re-exported, duty will be payable twice,
once in the UK and once in the country of destination. However, if goods are imported into a customs
warehouse and then re-exported from the UK, duty will not be payable on the importation into the UK.
Therefore, the use of the warehouse can result in cash flow savings or absolute cost savings (or
increased profit) if goods are exported.
Normally all consolidated shipments have to be cleared into free circulation even if the goods are going
to be re-exported. Consolidated shipment can be moved into a customs warehouse and split. Goods
being re-exported will not be liable to duty and VAT.
Picking and packing
It is possible to pick and pack goods, or re-label goods in a customs warehouse. Therefore, for goods
imported in bulk, it is possible to make a single import entry and then only declare VAT and duty when
the goods have been packed and are then removed for sale.
Parts for use in the manufacture of goods can be imported into the customs warehouse, sent out to be
processed and then the manufactured product can be returned to the warehouse. This could generate
a duty saving. This could apply to fitting electronic parts into cases or turning plastic source materials
into a product. This saves different companies having to apply for processing and warehousing
authorisation from HMRC it could be controlled from the warehouse.
Under and over shipments
Normally, when the number of boxes on a pallet have been mis counted or lost in transit, duty will be
payable on the amount which was recorded on the commercial invoice. Adjustments can be made at a
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later date, but this can involve protracted correspondence with HMRC. This is time consuming and
HMRC can take weeks to reply. If goods are imported into a customs warehouse, then amendment can
be made without HMRC direct involvement. Duty is only payable on the items removed from the
warehouse. Thus, an absolute duty saving can be achieved.
This also has an advantage if boxes are split into smaller consignments as shortages can be addressed
before being sent to the customer.
Duty and VAT will not be payable on goods which are damaged or destroyed in a customs warehouse.
So, if goods are imported but are found not to be fit for purpose, duty will not be payable. All goods
that are to be destroyed need to be declared to HMRC before destruction. We can provide this
declaration service and deal with HMRC.
Alternative to Demurrage
Demurrage is charged if the containers are not cleared on time and the goods remain in port after the
Instead of incurring expensive demurrage costs, it is possible to move the goods into temporary
storage in a customs warehouse. This is a cheaper alternative.
Additional duty can be payable for certain goods if monthly quotas are exceeded. It is possible to
check the status of a quota and, if it has been exceeded, it is possible to import the goods into a
warehouse and clear them once the new quota is released, thus saving the payment of the antidumping duty.
Overall, public customs warehouse which is properly controlled can save time and money. In addition,
we would deal with HMRC directly on behalf of the users.
We provide a helpline service to support importers and exporters. We can check commodity codes to
ensure that the correct code is being used. We are able to make retrospective claims and recover
overpaid duty if the wrong code has been used in the past. This can result in significant claims. One
client received a refund of over £1m for duty which had been overpaid over the previous three years.
We can also advise on the use of the correct procedure code (“CPC”) so that VAT and duty are only
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