SPE13310 - VAT only IP: risks

Note: This manual is under review following Brexit and is likely to be withdrawn. If there is anything within this manual you use regularly, please email hmrcmanualsteam@hmrc.gov.uk to let us know. Please check the other guidance available on GOV.UK from HMRC.

As with other forms of IP there is a risk that traders may enter goods to ‘VAT only’ IP where there is no intention of processing and re-exporting the imported goods:

• solely to obtain a cash flow benefit, or
• avoid payment of VAT if they are unable to recover the import VAT as input tax.

The same controls and checks for IP goods liable to customs duties and import VAT should be carried out on IP VAT only goods, to ensure goods entered to the procedure are correctly discharged.

Note - Northern Ireland (NI) Customs Authorisations will continue to fall within the provisions of the Union Customs Code (UCC), as retained by the European Union (Withdrawal) Act 2018 and CEMA 1979