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. In this article we explain what that means, and how the process works.

What are capital goods?

Capital goods are the physical assets your business uses to produce goods and services for customers. You might also hear them described as fixed assets. They’re an essential part of a business’s operations, so if you decide to move a business to the UK from another country then you might bring your capital goods with you.

Will I need to pay tax if I import equipment and machinery?

Moving goods across the UK border is usually subject to customs duty and import tax, but you can get relief on this if you’re transferring your business to the UK from overseas and importing the business’s capital goods and equipment as part of the move.

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, such as:

• Transport which is needed in order to provide or produce the goods or service
• Livestock belonging to any agricultural business
• Things you need in order to provide or produce the goods or services you offer (known as ‘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 the 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)

Does my business qualify for relief on Customs Duty and VAT?

Let’s start by covering who fits under the umbrella of eligibility claiming relief on capital goods imports. 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 which:

• 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 (which normally refers to a profession regulated by a national or governing body, such as engineering or architecture)

Am I eligible 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.

Is my business eligible to claim VAT relief if I import 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 £90,000.
• Voluntarily register for VAT

 
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