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Inward Processing (HMRC Brief 15) and its impact on the Metrology and Testing Industry post Brexit

This is an issue that is affecting our smaller members who undertake testing and calibration of large numbers of measuring instruments for key industries including manufacturing and aviation. In the past these small companies have had strong business models, testing equipment for large companies in the EU. The EU companies could simply send their equipment to the UK laboratories who would test or calibrate them and return to the owner. 

Unfortunately, the situation post Brexit has become considerably more complicated by the need to pay and reclaim VAT on each and every item tested. HMRC has introduced a system of Inward Processing (IP) set out in its Brief 15 intended to facilitate this process and to avoid the requirement for laboratories to pay VAT on imported equipment they are testing. Instead it has created a significant bureaucratic burden for small specialised businesses. 

Mr Sunak has recognised the challenges BMTA members are facing and the HM Revenue and Customs (HMRC) is currently considering how it might provide a more facilitative approach for businesses, like BMTA members, both applying for and using customs procedures.

IP is an established facilitation which has been used for many years by businesses that wish to suspend customs duty and import VAT on goods imported into the UK for processing or repair which are then exported. IP is now an option for goods coming from the EU since the UK left the Single Market and Customs Union on 31 December 2020. 

For further guidance on IP, please call HMRC’s Customs & International Trade helpline: 0300 322  9434. Online help can also be found at: or-repair 

Other options than Inward Processing that may be found useful are:  

Temporary Admission (TA): 

For goods which are subject to tests (but not repairs) in the UK, businesses may wish to consider TA. TA allows goods to be brought into the UK temporarily with relief from import duty and VAT, providing relevant conditions are met. The goods must not be altered while they are in the UK and must be re-exported within a set time period (normally up to a maximum of 24 months). If declaring  goods to TA via an Authorisation by Declaration, it may be beneficial to know that the usual limits of three times per year do not apply to TA. 

More guidance on TA can be found here:

A full list of eligible goods alongside the conditions for use can be found at: temporary-admission 

Relief for testing: 

There is relief from import duties and VAT specifically for items imported into the UK for testing. Normally the items must be destroyed in the course of  the testing, however, an application may be made to waive this condition. Prior approval from HMRC is not required unless relief is being claimed on excise goods. 

Details can be found at:

Postponed VAT Accounting (PVA): 

This has been available since 1 January 2021 on imports from anywhere in the world. This means UK VAT-registered businesses can simultaneously declare and recover import VAT on their VAT returns, rather than paying import VAT at, or soon after, the time that the goods arrive at the UK border. This is similar to the way that VAT on goods acquired from the EU was accounted for prior to 1 January 2021.  

Further guidance on the use of PVA can be found at:

The UK Government is working intensively with courier companies and other intermediaries to help them adapt to the new trading arrangements with the EU. However, the industry is neither regulated nor authorised by the Government. If a carrier fails to note IP or any of the required information on customs documents on behalf of a business, it is a commercial matter that the business will need to take up with  the carrier directly. 

The Government has developed an online Customs Intermediary Register to help businesses access an intermediary to suit their needs. The Register lists intermediaries detailing which are taking on new clients and the services offered. BMTA members may find it helpful to use the Register to find alternative carriers or intermediaries who can support them with IP or other customs procedures. 

The Register can be found at: