Inward processing relief (IPR) and outward processing relief (OPR) refer to two customs procedures. IPR is when imported goods have entered a country to be processed, and OPR is when the goods have already been processed and are returning to the country after processing has been finalised. The ‘process’ the goods undergo can be a mixture of things, including repairs, modifications and inspections.
IPR and OPR are not ways of avoiding import duties and taxes, they are processes that have been enforced to ensure you only pay fees on the actual value of the process that your goods have been subject to (if there have been any).
When would I use inward processing relief?
In a case where a product has reached its destination but later ends up damaged, the buyer will need to send it back for repairs. The shipping invoice will state that the goods are being sent back for repair. Upon arrival at the destination, the clearing agent will see that the goods are only being sent back for repairs and therefore the item would be cleared for inward processing relief. This means that the duty and tax would be waived.
Using inward processing to repair goods
What can you do with goods when they’re being processed or repaired when following the inward processing relief system?
When your goods are in the UK and you are using inward processing, there are things you can do whilst your goods are being processed. For example, you use ‘equivalent’ or similar/identical free circulation goods rather than wait for the goods imported to custom procedures. You can also process goods in a customs warehouse but you will need authorisation from the warehouse keeper for inward processing. This enables them to accept your goods and move them forward for inward processing and ensure return once they have been processed.
When would I use outward processing relief?
Once a returned item has been repaired, the item needs to be shipped back to the buyer’s destination. This process is called the outward processing relief, and this time, the duty and tax is a little more complicated.
In this case, the clearing agent must be informed that the item was exported for repairs, the item has now been repaired and now the item is ready to be shipped back.
The clearing agent will need:
- Copies of first invoice (AWBs or Bill of Lading) this will show when the item was purchased and imported
- Copies of export invoices and paperwork of shipping, showing it was sent back for repair
- Invoices displaying repair costs and return shipping
Types of OPR authorisation
There are four types of authorisation for OPR including:
- Full – if you want to do this process regularly, you will require full authorisation. You will require 30 days before you begin exporting. You can apply for this by applying online using your Government Gateway user ID and password. For those unable to apply online, you can follow the instructions on this application for outward processing relief form. As of January 2021, those applying for authorisation for both Northern Ireland and Great Britain must fill out the form twice, once for NI and once for GB.
- Retrospective – after you have exported some goods, you can ask for authorisation but you can only do this once every three years. When applying for retrospective authorisation, you will need records to show that the goods you have exported are eligible and that there’s a business need for retrospective authorisation. You also need to show records that you have followed the outward processing procedure accurately. To apply for retrospective authorisation online, sign in to the Government Gateway. Otherwise, you can use a print and post application for retrospective outward processing by filling out the form.
- By declaration – when your export declaration is authorised at the border. By declaration can only be used when you’re sending a shipment outside of the UK for repairs. This type of authorisation is only allowed three times in a year
- Authorisation covering Northern Ireland and the EU – if your business carries out work on goods across sites in Northern Ireland and the EU, it is possible to obtain a single authorisation, rather than obtaining one for each site. To apply for authorisation covering Northern Ireland and the EU, you can email email@example.com where you will need to include your name, contact email address, address of your Northern Ireland business, Economic Operator Registration and identification number (XI prefix). After doing so, you can expect a reply within five days that will include a link to the EU Trader Portal to obtain your application form.
Car parts and repairs deemed as waste
Sometimes it might be the case that shipments of car parts and repairs are seized en route to their destination by customs and authorities because the goods being imported or exported have been deemed as waste. If this happens, the goods are typically sent back to the sender which can be expensive and time-consuming for everyone involved.
There have also been cases where end-of-life vehicles (also known as EVLs) have been exported from the UK but have been seized by customs because the goods have been missing waste shipment paperwork, or the goods have been exported to a country that forbids the import of ELVs that haven’t been depolluted. When this happens, the imported ELVs are returned back to the sender.
To avoid this happening to you, we have put together some useful tips to follow so that you comply with important regulations and reduce the risk of experiencing the costly return of your car parts and repairs.
How to successfully export second-hand car parts
Even though an end-of-life vehicle is considered waste, and dismantling and depolluting it is a waste treatment activity, some parts on an ELV can still go back into circulation and are reused.
To better understand what second-hand car parts can be reused, here’s the criteria to follow:
- Car parts are fit for purpose and can be reused without the need for additional testing or repairs
- Car parts will be used for their original intended purpose
- Car parts have been disassembled and stored to ensure they haven’t been subject to damage and can be reused for their original intended purpose.
All second-hand car parts that have been removed from ELVs will be inspected for damages. If the depolluted car parts are signed off as undamaged and fit for their original purpose, they can be reused as a second hand car part or repair, and will not be classified as waste. All second-hand car parts and repairs must be stored, handled and transported with care and sold as second-hand parts as opposed to second-hand parts sold as scrap.
Unsure if your car parts or repairs comply with import or export regulations?
Although EU member states tend to share the same views, they do not always follow suit. If you are at all unsure whether your car parts or repairs will be classified as waste when they reach inward processing relief, it’s best to check with the destination regulatory authority to make sure you comply with their specific requirements. Checking before importing or exporting car parts and repairs will save the frustration of your goods being seized and returned and will save precious time and money.
How to prove car parts or repairs taken from ELVs are not waste
If you want to be fully sure that your car parts and repairs are successfully imported or exported, there are some extra steps you can take to ensure your shipments are counted as second-hand goods and not waste. These steps are as follows:
Engines – must be assessed and signed off as fully operational and suitable to be used again. The engine must be depolluted and ready for use, without the need for repair. All engines need to be drained completely, oil filters must be removed and bunged before being stored or exported to avoid oil leaks. Engines that haven’t undergone full depollution that still have their oil filter attached are highly likely to leak oil when being shipped and cause pollution. Shipment of an engine like this faces high risk of being seized or returned. It’s also important to note that engines with missing parts or damages are considered as waste and are not suitable for use.
Tyres – following the latest regulations and legislation for tyres, all second-hand tyres must be assessed and confirmed to be suitable for reuse. For second-hand tyres to be road legal in the UK they must be in a good condition. Good condition just means that they should not have any bulges along the sidewall or cuts in the tread, they must have a minimum of 2mm tread across the entire circumference and be marked as ‘part-worn’. Unroadworthy tyres in the UK are classified as waste, even if they are classed as road legal in another country.
Other car parts and repairs – need to be assessed to conclude that the part offers full and adequate functionality, quality and condition so that they can be used again without the need for repairs or modifications.
It’s always important to note that storage and packing will strongly suggest the status of the car parts and repairs, so carefully pack all shipments to ensure they are not damaged whilst in transit.
Connect With KlearNow
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