Union Customs Code – Inward Processing

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Union Customs Code – Inward Processing
  • Scope
  • Obtaining authorisation
  • Conditions
  • Production accessories, agents and catalysts
  • Equivalence
  • Movements of goods
  • Export and disposal
  • Special methods of discharge
  • Import restrictions, licensing and preference

This guidance note provides an overview of HMRC’s interpretation of the customs special procedure, Inward Processing (IP), which was revised when the Union Customs Code (UCC) was introduced with effect from 1 May 2016. This note should be read in conjunction with the Union Customs Code – imports, exports and specific reliefs and procedures, Union Customs Code – Customs Special Procedures – economic test and Union Customs Code – Customs Special Procedures – equivalence guidance notes together with the other notes in the Union Customs Code subtopic.

Please see the Inward Processing Relief (IPR) overview guidance note for information on the IPR procedure in operation until 1 May 2016.

More information on the UCC can also be found on the European Commission website via the UCC – guidance documents .

Specific information on customs simplified procedures can be found via Special Procedures .


Importers can use IP in order to obtain relief from customs duty, import VAT and where applicable excise duty on goods that are imported from a non-EU customs territory that are to be processed and exported to a non-EU country or to suspend customs duties on goods that are imported for processing and then released into free circulation within the EU. When goods are released to free circulation, duty and import VAT will become payable (see below).

HMRC Customs Notice 3001 ; Regulation (EU) No 952/2013 (UCC) ; Commission Implementing Regulation (EC) 2015/2447 ; Commission Delegated Regulation (EU) 2015/2446  

Any business that is established in the EU can use IP and UK businesses need to be obtain authorisation from HMRC to use IP. Any importer who does not have a place of establishment within the EU can only use IP in occasional cases where the customs authorities consider this to be justified.

The business using IP will be required to pay import duties once the goods have

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