A pallet you shipped to an overseas customer six months ago is on its way back. Maybe the order was rejected, the goods were faulty or they simply didn’t sell. Without the right paperwork, you could face import duty and VAT on goods that started life in the UK. Returned Goods Relief (RGR) exists to stop that happening. If the goods come back unaltered, usually within 3 years, you can often re-import them with reduced or no duty, and our customs clearance team can make the claim on your declaration.
What is Returned Goods Relief?
According to HMRC guidance, Returned Goods Relief lets you pay less Customs Duty and import VAT when you re-import goods that were previously exported from the UK. It’s a relief rather than an automatic exemption, so it has to be claimed on the import declaration using the correct procedure code, and you need evidence to back it up.
Who can claim and when
HMRC sets out several conditions. The main ones are:
- Time limit. The goods must generally be re-imported within 3 years of their export. HMRC can waive this in some circumstances, such as goods on long-term hire or used in capital projects abroad.
- Condition of the goods. They must be returned in the same state they were exported in. Routine maintenance is allowed, but goods that have been upgraded, processed or repaired abroad do not qualify under RGR.
- Special cases. Goods that received agricultural export refunds, goods that came in under inward processing, and goods that originally entered under end-use relief all have extra conditions, such as repaying a refund or relieved duty first.
If the goods were repaired or processed overseas, a different customs procedure may apply. It’s worth checking before the goods are shipped back.
What about import VAT?
Duty relief and VAT relief are not quite the same. HMRC says that to get VAT relief, the person exporting the goods and the person re-importing them must be the same. You’ll normally need the original export declaration showing you as the exporter, along with the re-import declaration showing you as the importer.
If VAT relief does not apply, you may still be able to account for the import VAT through postponed VAT accounting on your VAT return rather than paying it at the border, provided you’re VAT registered.
The evidence you’ll need
The cleanest evidence is the original export declaration. If the goods left the UK through the Customs Declaration Service, the Movement Reference Number (MRN) from that export should be quoted on the import declaration.
If you can’t produce the export declaration, HMRC accepts alternative evidence that the goods were previously in the UK. Its guidance lists examples such as:
- commercial invoices and bills of lading or air waybills
- manufacturer’s statements or commercial certificates
- stock records
The more clearly you can match the returning goods to the original export, by serial number, batch or description, the smoother the claim is likely to be.
Returned goods arriving at UK ports
Returned shipments come back in all sorts of ways, from a single crate by air freight into Heathrow to a full container through Felixstowe, Southampton or London Gateway. Whichever route they take, the declaration needs to be lodged with the right RGR procedure code and supporting evidence before the goods can be released. A valid EORI number is also needed for the import, just as it was for the original export.
Frequently asked questions
How long do I have to claim Returned Goods Relief?
HMRC guidance says goods must generally be re-imported within 3 years of their export. A waiver may be available in certain circumstances, for example goods on long-term hire or used for capital projects abroad. If your goods have been away longer than 3 years, speak to a customs broker before they are shipped back.
Can I claim RGR on goods that were repaired abroad?
Generally no. HMRC guidance says goods must be returned unaltered, apart from maintenance, and goods that have been repaired, upgraded or processed abroad do not qualify. An exception applies if the repair was not completed. Other customs procedures may cover goods sent abroad for repair, so check your options before shipping.
Do I pay VAT on goods returned by an overseas customer?
You may be able to claim VAT relief as well as duty relief, but HMRC requires the exporter and the re-importer to be the same person, with the original export declaration as evidence. If VAT relief doesn’t apply, VAT-registered businesses can usually use postponed VAT accounting instead of paying at the border.
Speak to our customs team
Every returned shipment is different, so give us a call on 01304 759200 or drop us a message and we’ll check whether your goods qualify for Returned Goods Relief and handle the declaration and evidence for you.