HMRC introduce Advanced Valuation Rulings

By Paul Kelly in News Posted: 22nd, March, 2023

As part of UK Customs measures announced with last week’s budget, the government plan to include Advanced Valuation Rulings (AVRs)  in the Spring Finance Bill. 

The long awaited mechanism will, join the established Advanced Tariff Rulings and Advanced Origin Rulings and will allow for legally binding rulings on the Customs Valuation methodology for specified goods in a particular scenario, for a period of three years.

Amendments will be made to the UK’s post-Brexit Cross-border Trade Act 2018 (TCBTA), to allow for AVRs, which will bring the UK in line with requirements of new Free Trade Agreements (FTAs) and support the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). 

Currently only advance tariff classification and advance origin rulings are possible under Section 24 of the TCBTA because the EU did not have in place a mechanism for AVRs at the time of leaving the EU.

The Advanced Valuation Rulings (AVRs) will be a written decision made by Customs authorities at the trader’s request and will be legally binding for both parties for a period of three years, subject to cancellation or withdrawal.

As with Advanced Tariff Rulings and Advanced Origin Rulings, AVRs are a trade facilitation measure, which will not be mandatory, but will be helpful for any trader who is struggling to arrive at a proper customs valuation for their import. They provide a legally binding decision before goods are imported and will give certainty on how goods will be treated for import duty. 

It aims to simplify the means of identifying the correct method of valuation and ensure that accurate duty calculations are applied, which may be particularly useful for importers when the standard Valuation Method 1 (evidenced by invoice, purchase order etc) does not apply, such as:

  • Sale between related parties where Valuation Method 1 may not apply 
  • Traders moving B2B ‘consignment stock’ to be sold to a UK buyer later
  • eCommerce merchants selling in UK via online shops from overseas
  • Sales where there is ‘transfer Pricing’ or any doubt about ‘arms length’ pricing
  • Non-established taxable persons (NETPs) or non-resident importers, acting as Importer of Record in UK with their own EORI and VAT numbers

The amendment to Section 24 of the Taxation (Cross-border-Trade) Act 2018 will come into effect on and after the date of Royal Assent to the Spring Finance Bill 2023.

If you are interested in learning more AVRs or are interested in applying for an AVR for your imports please EMAIL Chloe Henshall.

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