Valuing imported goods that are free of charge, used, rented or leased
How to work out the customs value of imported goods that are free of charge, used, rented or leased if you're an importer or clearing agent.
Valuing goods can be complicated, so if you’re not an importer or clearing agent you may want to get someone to deal with customs for you.
Before you work out the customs value of your imported goods you must first have read Prepare to work out the customs value of your imported goods.
Valuing free of charge goods
You cannot normally use Method 1 to value free of charge goods because there is no price paid or to be paid by you to the supplier.
You may be able to use Method 1 when you’re importing the goods pre-sold and you can produce evidence of that sale.
Using other methods to work out the customs value
You can try using the following methods if you cannot use Method 1:
- Method 2 or Method 3 if you import or have knowledge of imports of identical or similar goods under Method 1
- Method 4 if you sell the goods or identical or similar goods to unrelated customers in the UK
- Method 5 if you can get the detailed costings
You can find a list of all the methods under the heading methods 1 to 6 of Working out the customs value of your imported goods.
If you cannot use methods 1 to 5
You must use Method 6 if you cannot use methods 1 to 5.
The customs value can be based, for example, on the price you would have paid the supplier if you had bought the goods.
You must include the:
- commission
- royalties and licence fees
- goods and services provided free of charge or at reduced cost by the buyer
- materials, components, parts and similar items
- tools, dies, moulds and similar items
- materials consumed in producing the imported goods
- engineering, development, artwork, design work and plans and sketches
- containers and packaging
- proceeds of sale
- export duty
You must exclude the:
- delivery costs in the UK
- UK duties or taxes
- discounts
- quantity or trade discounts
- cash and early settlement discounts
- dividends
- marketing activities related to importing the goods
- buying commission
- interest charges
- rights of reproduction
- post-importation work
- management fees
For more detailed information on what to include and exclude read the guidance in Method 1 — items you must add to the price paid or payable.
If you use Method 6, you must provide HMRC with evidence to show why you cannot use methods 1 to 5. You must also provide evidence to support your use of Method 6 such as:
- a copy of the supplier’s current export price list for goods sold to the UK
- a statement from the supplier of the value of the goods
- any other evidence agreed with us
Valuing free of charge replacement goods
Replacement goods in the same shipment
If the shipment includes a quantity of items ‘free of charge’ as replacements for goods likely to be defective or damaged in transit, the contracted sale price will be the total quantity of items shipped.
Replacement goods in another shipment
You cannot normally use Method 1 to value replacement goods in another shipment because there is no price paid or to be paid by you to the supplier.
You can try the following methods if you cannot use Method 1:
- Method 2 or Method 3 if you import or have knowledge of imports of identical or similar goods under Method 1
- Method 4 if you sell the goods or identical or similar goods to unrelated customers in the UK
- Method 5 if you can get the detailed costings
You can find a list of all the methods under the heading methods 1 to 6 of Working out the customs value of your imported goods.
You can ask us to amend the customs value of the original shipment in accordance with the contractual arrangements, contact the imports and exports general enquiries helpline.
Valuing used goods
Buying second-hand goods which are unused before entry into free circulation
To work out the customs value of these goods you have to follow the rules set out in methods 1 to 6.
Buying second-hand or new goods which are used or will be used in a third country before entry into free circulation
If the goods are worth less than when you bought them because there’s a delay between the period and extent of use between the goods being bought, and entry into free circulation you do not need to use Method 1.
You can try:
- methods 2 or 3 if you import identical or similar goods of the same age and in the same condition under Method 1
- Method 4 if you sell the goods or identical or similar goods to unrelated customers in the UK
If you cannot use any of these methods you must use Method 6.
The customs value can be based on the value of the goods when they were bought, less an amount for loss of value due to the usage.
You can find a list of all the methods under the heading methods 1 to 6 of Working out the customs value of your imported goods.
Valuing rented or leased goods
When you import goods that you’ve rented or leased, there will be no sale between the supplier and yourself. To calculate the customs value in most cases you should use Method 6.
If the goods have been subject to a sale prior to being rented or leased, you may be able to use Method 1, if not you should try methods 2 to 5.
Using the cash price to calculate the customs value
Sometimes a cash price is quoted in the rental or leasing agreement in case you want to buy the goods at a later date.
This cash price may be artificially high to encourage you to rent or lease the goods instead. It may be an option to buy the goods when they are second-hand.
The cash price does not constitute a sale and Method 1 cannot be used.
How to calculate the customs value using Method 6
To calculate the customs value using Method 6, you multiply the annual rental or leasing cost by the expected economic life of the imported goods.
If you do not know the expected economic life of the imported goods you can ask the imports and exports general enquiries helpline for advice.
Where the rental or leasing cost includes interest, you will need to calculate the ‘cash’ price of the goods.
There are 2 calculations that you can use to calculate the ‘cash’ price, which one you use will depend on whether the payment is made in advance or in arrears.
Case studies and calculations to work out the ‘cash’ price
The following case studies will help you work out the ‘cash’ price depending on if you pay in advance or in arrears.
Case study 1 — yearly hire charge when paying in advance
Read the for rented or leased goods.
Case study 2 — yearly hire charge when paying in arrears
Read the for rented or leased goods
Updates to this page
Published 3 November 2022Last updated 28 October 2024 + show all updates
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Case studies and calculations information has been updated to remove duplication.
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First published.