Duty Relief Guides: How to Reduce or Eliminate Import Duties Legally

What Is Duty Relief?

Duty relief refers to a range of customs procedures that allow businesses to reduce, suspend, or completely eliminate import duties and taxes under specific conditions. These schemes are designed to support manufacturing, repair, re‑export, temporary use, and legitimate commercial activity — but they must be used correctly to stay compliant.

Understanding which reliefs apply to your goods can significantly reduce costs and improve cash flow.

Why Duty Relief Matters

Using the right duty relief scheme can transform your import costs. Businesses benefit from:

• Lower duty and VAT payments
• Improved cash flow
• Reduced landed costs
• More competitive pricing
• Avoidance of unnecessary charges
• Compliance with UK customs regulations

Many companies overpay duties simply because they’re unaware of the reliefs available.

Key Duty Relief Schemes Explained

1. Inward Processing (IP)

Inward Processing allows you to import goods for processing, repair, or incorporation into another product without paying import duty or VAT.

Common uses:

• Repairing goods before re‑export
• Manufacturing finished products
• Processing raw materials
• Reworking or upgrading components

You must normally re‑export the finished goods or dispose of them under approved conditions.

2. Outward Processing (OP)

Outward Processing allows you to export goods for processing or repair outside the UK and then re‑import them with reduced or zero duty.

Ideal for:

• Overseas repair work
• Upgrading or modifying goods abroad
• Cost‑efficient manufacturing steps

Duty is usually charged only on the value added outside the UK.

3. Returned Goods Relief (RGR)

Returned Goods Relief allows goods that were previously exported from the UK to be re‑imported without paying duty or VAT, provided certain conditions are met.

Useful for:

• Goods sent abroad for exhibitions
• Items returned by customers
• Equipment temporarily used overseas
• Goods rejected or faulty

The goods must normally return within three years and be in the same condition (unless repaired under OP).

4. Temporary Admission (TA)

Temporary Admission allows you to bring goods into the UK temporarily without paying duty or VAT, as long as they are re‑exported.

Common examples:

• Exhibition equipment
• Professional tools
• Commercial samples
• Scientific or testing equipment
• Horses for competition

Strict conditions apply, including time limits and permitted uses.

5. Customs Warehousing

Customs Warehousing allows goods to be stored in a bonded warehouse without paying duty or VAT until they are released into free circulation.

Benefits:

• Delay duty payments
• Re‑export goods duty‑free
• Store goods while awaiting orders
• Manage cash flow more effectively

Ideal for importers with fluctuating demand or long‑term storage needs.

6. Preferential Duty Rates (Rules of Origin)

Under Free Trade Agreements (FTAs), goods may qualify for reduced or zero duty if they meet the agreement’s rules of origin.

Examples include:

• UK–EU Trade and Cooperation Agreement
• UK–Japan CEPA
• UK–Australia FTA

Correct HS classification and origin documentation are essential.

Common Mistakes When Claiming Duty Relief

Many businesses lose money or face compliance issues due to:

• Incorrect HS codes
• Missing or invalid origin documents
• Using the wrong relief scheme
• Failing to meet re‑export deadlines
• Poor record‑keeping
• Not applying for authorisation when required
• Misunderstanding “processing” definitions

Duty relief is powerful — but only when used correctly.

How to Choose the Right Duty Relief Scheme

To determine which relief applies, consider:

• What the goods are
• Why they are being imported
• Whether they will be processed, repaired, stored, or re‑exported
• How long they will remain in the UK
• Whether they qualify for preferential origin
• Whether you need prior authorisation

A customs specialist can help you avoid costly errors and ensure full compliance.

How We Help With Duty Relief

We support businesses with:

• Identifying the correct duty relief scheme
• Applying for authorisations (IP, OP, TA, warehousing)
• Reviewing HS codes and origin eligibility
• Preparing compliant documentation
• Managing ongoing customs processes
• Ensuring correct use of reliefs to avoid penalties

Our goal is simple: reduce your duty costs while keeping you fully compliant.

Need Help With Duty Relief?

If you want to reduce import costs or check whether your goods qualify for duty relief, our customs specialists are ready to help.

Get in touch for expert guidance on duty relief and customs compliance.