A customs warehouse is a premises authorised by HMRC where goods can be stored with customs duties and VAT suspended. They only become payable when goods are removed from the warehouse to free circulation. This means that payment of duties/VAT can be avoided entirely if imported goods are re-exported or moved to another qualifying customs special procedure such as inward processing.
Who Can Apply?
To be able to apply for a customs warehouse you must:
• Be established in the UK
• Have an Economic Operators Registration and Identification (EORI) number
• Be financially solvent
• Have a good compliance record in dealing with customs
• Be able to prove you have a business need for the warehouse
• Be able or prepared to make declarations or employ an agent who is
• Be able to keep stock records and run the warehouse to health and safety standards
• Provide a guarantee if needed for Customs Duty and VAT unless you’re an Authorised Economic Operator (AEO) or can meet AEO conditions
Applicants will be expected to have written procedures in place covering the operation of the warehouse (these must be supplied with the application) and maintain accurate stock records and a thorough customs audit trail.
There will also be an assessment of the physical security of the premises – HMRC revenue is at risk where goods are stored in duty suspense so it is important that they are adequately protected.
Types of Customs Warehouse
Public – Type R
A public customs warehouse can store goods belonging to 3rd parties – known as ‘depositors’. There is no authorisation required to be a depositor in a public customs warehouse.
Private – Type U
A private customs warehouse can only store goods belonging to the authorisation holder – they will be the sole depositor.
Duty savings – holding goods in duty suspense and re-export or transfer them to qualifying special procedures without any payment of customs duties of VAT. This is particularly important for businesses that regularly import and subsequently re-export goods – under normal procedures they will pay taxes on import to the UK, and tax will also be due on import in the destination country. Using a customs warehouse removes the need to pay taxes twice. UK importers acting as a distribution hub for EMEA can avoid the payment of UK duties/VAT on goods that are re-exported.
Cashflow – delay the payment of import duties & VAT until the goods are sold and released to free circulation. There is also no requirement to pay duty on an entire import at once goods may be removed in any quantity. There is no time limit on how long goods can be stored in a customs warehouse.
Flexibility – customs warehouse authorisations can cover a designated area of a warehouse, a whole warehouse, or multiple sites. Authorisation holders can apply to add additional sites if required to meet business needs.
The Langdon Solution
DMS Enterprise is a powerful on-premise bonded warehouse management solution which can interface seamlessly with your commercial system to manage your customs declaration requirements. We cover the management of your bonded stock, so your own commercial system does not have to.
Langdon also offers DMS Cloud, a SaaS declaration solution that gives the same benefits as DMS Enterprise without the infrastructure requirements.
Contact us on +44 (0)161 513 3334 for help and advice, or visit:
Dale Hawson – Senior Customs Consultant