The simple answer to this question is: yes. You are able to claim relief on Customs Duty and VAT if you’re importing capital goods.
What are capital goods?
If you decide to move a business to the UK from another country, you might want to bring your capital goods, too. These are the goods that are part of your business operations. They’re used to produce other goods, rather than being made available for sale to customers.
Am I eligible to claim for Customs Duty and VAT relief if I import capital goods?
As with most things in the world of business and finance though, there are some more complex levels of eligibility. There are also some do’s and don’ts before filing any claims.
Let’s start by covering who fits under the umbrella of eligibility for this kind of relief. Because it’s a complex area, we’ve put it in list form to make it easier to follow.
You are eligible to pay less Customs Duty and VAT if you are transferring a business to the UK that:
Has completely stopped all activity outside of the UK or EU.
Is undertaking new operations being carried out within the EU or UK that are of a similar nature.
Is a Limited Company, Not-for-Profit organisation or belongs to a self-employed person.
Sets up new activity as it combines any established businesses in the UK or EU
Falls under the category of a liberal profession
The term liberal professions usually refers to professions which are regulated by a national or governing body. They typically require rather specialist training in order to operate in that profession, for instance:
What am I able to claim relief on?
If you are eligible, you will be able to benefit from relief on capital goods and equipment, including the following assets:
Transport which is required in the provision or production of goods or service.
Livestock belonging to any agricultural business.
Tools of trade, office equipment and shop machinery.
Computers and technology which is needed to run the business.
What am I NOT able to claim relief on?
VAT and Customs Duty relief isn’t available for:
Means of transport which aren’t used in production or provision of goods or service.
Any goods intended for consumption by humans or animals.
Fuel, raw materials or semi-finished products (e.g. plants and seeds).
Livestock which is owned by a dealer (rather than the business itself).
Eligibility for Customs Duty relief
When it comes to Customs Duty, there are few more boxes that you will need to be able to tick in order to claim your relief. These requirements say that the eligible capital goods must:
Have been owned and used by the business on an ongoing basis for at least 12 months before being transferred to the UK.
Once transferred to the UK, they must be used for the same function as they were previously.
Be reasonable and relative to the size, scale and nature of the business.
The capital goods must be imported from where they were previously within 12 months of the date your business ceases operations there.
The last two points do have some flexibility if there are extenuating circumstances which makes them impossible. If you think this might be the case for you, you can contact the National Imports Relief Unit.
VAT relief when importing capital goods
If you are looking to claim relief on import VAT, your business must also:
Be solely involved in the production of taxable supplies.
Already have – or be expecting to have – a taxable turnover which exceeds the UK requirements for VAT registration, or will exceed it within the next 30 days. The current threshold is £85,000.