Eagle Boat Windows (EBW) - Simple Temporary Import Procedure
Whereas before, this elongated process only applied outside the EU, post-Brexit, it’s now applicable for all of our valued Clients outside the UK. Believe me when I say it has been challenging to firm up this process, but I’m happy we can now serve non-UK clients in a way which should avoid any unexpected customs charges, even if the paperwork burden remains. Such is the cost of progress…
IPR as a process focuses on avoiding VAT and duty being applied when goods enter the UK for refurbishment. The process below achieves this. However, to ensure that customs in the senders country don't apply tax to the value of the goods, in addition to the cost of the refurbishment it is crucial that you, the Client contact the local customs/UPS office and make it clear that the export is for repair. Knowing this (you can provide them with a copy of the inward commercial invoice in support) they should only apply tax and duty (if any is due) to the work we do (ie the invoiced ex-VAT cost). So for example, if you send a hatch valued at £100, which we charge £250 to refurbish the local tax and duty payable should be on £250, not £350.
IPR (Inward Processing Relief) is a facility which allows goods to be imported on a temporary basis without being liable to UK duty or VAT, so long as the goods are re-exported within 3 months. There is an implicit assumption that the ‘value’ of the goods prior to import is the same as that after import, subject only to the repair cost (which is subject to inward VAT when the goods are re-exported back to the Client). The aim it to avoid any extra costs due to the inward/outward passage of the goods being repaired.
EBW has sought and received an IPR number from HMRC for full declaration, meaning we are not limited to the number of import/export cycles for five years from grant (Oct 2020).
IPR involves a dual sets of inbound/outbound paperwork, for EBW and the Client. The IPR process only directly impacts Eagle, but it is important that the Client presents paperwork to their local UPS representative and possibly their Customs Office to ensure tax and duty (if applicable) is only paid on the works undertaken and does not incorporate the underlying value of the goods being repaired.
IPR Process in ‘only’ 20 steps
Step 1 – EBW quote for works
This will be based on the details of goods provided by the Client. Note that the quote will exclude UK VAT, but that VAT at the prevailing Country rate is likely to be charged when the refurbished goods are received by the Client.
Step 2 – Accept quote, remove and package goods
In order to arrange shipping we need the weight and dimensions for each package. UPS (as other couriers) also calculate a volumetric weight equal to L x B x D in cm / 5000. The tariff is based on the greater of the actual and volumetric weight. As a guide, packages that exceed 25kg or 100cm in any dimension are likely to attract extra charges, so it can sometimes be sensible to send goods in several packages. Packages should have a cardboard outer, so if using a wooden box please put cardboard around to avoid extra charges.
Poor packaging (and believe me we’ve seen some) risks damage but will also cause delays. Where possible ‘make’ boxes to fit rather than have goods loose in oversized (and thus more expensive) boxes.
Measure the packages and send the dimensions and weight for each to EBW via email.
Step 3 – EBW book shipping with UPS
In order to keep things simple and minimise the opportunity for customs errors it is suggested that both inward and outward shipments are arranged by EBW through UPS as our preferred carrier. This allows the Client to access our preferred rates and also means UPS have one point of contact for all shipping related communication.
Shipments to/from EU countries are covered by our transit insurance, subject to a £250 excess. For shipments from outside the EU insurance from UPS is a paid option to be discussed.
Step 4 – EBW prepare Inward Commercial Invoice
This will require Client address, phone and email details as well as confirmed details of the actual units being shipped and their ‘value’.
As duty and VAT should not be payable on the value of the goods, there is no theoretical advantage to undervaluing goods to reduce liability. Clearly many of the goods shipped are old and well used and it can be difficult to assign a true ‘value’, particularly where replacement cost would be significantly higher.
Note that goods whose total value is under the £135 threshold amount will not be subject to VAT or Duty and will probably not be processed as requiring IPR by UPS. Where the total value exceeds £135 these must be processed using IPR to avoid duty and tax.
Step 5 – Send inward documents to client
PDF versions of the shipping label(s) and inward commercial invoice will be emailed to the client. The client should print two copies of each label and five copies of the commercial invoice. Attach one label to each package(s).
Place the second copy of each label (as a backup) along with three copies of the invoice in a document pouch on the outside of the main package. Ensure there is a reference to ‘documents enclosed’ if using a normal envelope.
One of the remaining invoice copies should be retained by the client, the other should be given to the UPS representative when the package(s) are handed over or collected. Note that the tracking number is also the waybill number which is normally 18 characters starting with 1Z7X0152.
Step 6a – Arrange collection / drop off
Make sure again that the package has a cardboard outer and that any old labels are either removed or covered over.
Whether the package(s) are collected (by UPS) or dropped off at a UPS Depot/Access point will be agreed in advance and depend on local availability, but drop off is preferred. If being collected, this will be arranged by EBW, ensuring there is enough time for the paperwork to be sent over, printed and attached to the package(s).
Step 6b – Optionally, contact local customs office
Whether this is sensible or practical will depend on the Country, but this is a good time to remind the local customs office that you are sending goods as a temporary export for repair which when returned should only have duty/tax due on the works undertaken and not on the value of the actual goods.
You can give them a copy of the inward commercial invoice as evidence of this for their records, to be matched later with the outward commercial invoice for the return.
Step 7 – Import
This is handled by UPS. They should have all the information required on the commercial invoice. They also have the EBW IPR/EORI and DAN (HMRC Deferred Account Number) on their systems.
Both EBW and the Client can track the progress on the UPS website using the tracking number on the package label. You can access international tracking at;
Step 8 – Arrival UK
Once the packages arrive in the UK, UPS will need to prepare the customs entry documents (eg SAD3 C88 entries on CHIEFS). UPS may contact EBW requesting further details though much of what is required will be on the inward commercial invoice.
Once the package(s) is/are known to be in the UK, EBW will contact UPS to confirm that all the required information is available.
Step 9 – Request customs entry documents
24-48 hours after arrival UK, EBW emails UPS quoting the Waybill Number and asking for customs entry documents. These will be required to complete the IPR process with HMRC as part of a quarterly BOD (Bill of Discharge) return.
Step 10 – Delivery to EBW
If processed correctly there should be nothing more to do before the package is delivered to EBW for refurbishing. Safe receipt will be confirmed with the client via email.
Step 11 – Refurbishment
If necessary verify scope of works quoted and any cost variance.
Step 12 – Pack and book return shipping
Refurbished goods will be securely packaged and the return booked with UPS for drop off at our local UPS Depot. The booking is only activated (and thus charged) at the point of drop off. This allows the costs to be determined for invoicing without payment/commitment at the time of booking.
The Client needs to specify whether they wish to have the returned goods delivered to their address or to collect from a local UPS Depot or Access Point (if available).
Shipping labels are printed and attached to the packages.
Step 13 – Invoicing and receipt of payment
EBW creates the invoice for the refurbishment and as separate line items the shipping charges for inward and outward carriage. The invoice is emailed to the client for payment prior to shipping.
Step 14 – Preparation of outward commercial invoice
EBW complete and prepare a PDF of the outward commercial invoice, using data from the associated inward invoice and the works invoice.
Five copies are printed, one for records, one for the drop off/collection UPS personnel and three to be attached to the main package in a documents pouch.
Step 15 – Drop off packages at UPS depot
Step 16 – Pre-alert UPS Export Brokerage
EBW will send a pre-alert email to UPS export brokerage team attaching;
• Outward commercial invoice
• Inward commercial invoice
• Customs entry documents
This email uses a standard template and is to remind the export team that the shipment is part of a temporary import/export and should be treated as a ‘controlled’, not ‘standard’ export.
Step 17a – Track export and alert Client
The export can be tracked on UPS.com (using link in step 7) using the outward waybill number. A copy of the outward commercial invoice will be sent to the Client as they may require this (along with the inward version) to support the treatment as a temporary export for repair. The outward commercial invoice will also contain the waybill number enabling them to track progress.
Step 17b – Optionally, contact local customs office
As with step 6b, it may help to pre-alert local customs that your goods are being returned and to provide them with a copy of the outward (from UK) commercial invoice (which will reference the inward also). The more informed they are the less chance they will misunderstand what is happening….
Step 18 – Inward Customs in Client Country
Technically, the IPR process completed at Stage 16, so this is not part of the EBW responsibility and must be handled by the Client using the commercial invoices, quote and EBW invoice documents provided. The exact process and treatment will vary by Country but in principal the desired result is that no duty or tax should be due on the value of the goods being repaired. It is to be expected however that local tax (VAT) will be charged on the value of the works (and outward delivery charges) invoiced by EBW.
EBW will of course endeavour to support the Client in providing requested information to local customs.
Step 19 – Delivery of refurbished good to Client
If all our ducks have stayed in line then you should receive your fabulously refurbished goods ready for refitting on your craft.
Step 20 – Complete quarterly BOD1 submission to HMRC
Details of each IPR event within the quarter should be submitted using the online BOD1 form (Bill of Discharge). In effect this confirms to HMRC that the goods imported under IPR have indeed been re-exported back to the point of origination.
This is just more red tape for us, but in theory this completes the temporary import cycle and allows you to go sailing safe in the knowledge that the customs vessel now coming towards you doesn't want VAT or Duty…