A Closer Look at the UK's Temporary Importation of Goods and the Responses and Next Steps
Executive summary
After leaving the European Union, the UK gained the ability to set its own border strategy. The UK has created customs rules that facilitate trade while maintaining high standards at the border. The 2025 UK Border Strategy was developed in 2020 to make the UK border the most effective in the world.
To take advantage of these new flexibilities, the government is conducting several reviews into customs and border procedures. HM Treasury and HM Revenue and Customs conducted a Call for Evidence over the summer in 2021. The Call for Evidence was aimed at understanding the opportunities available for improving the temporary movement of goods into the UK through the Temporary Admission (TA) procedure.
The TA procedure enables goods to be temporarily brought into the UK without paying import duties. This benefits many business sectors, as well as the UK’s hosting of international events such as Eurovision 2023 and the 2022 Commonwealth Games.
A wide range of individuals and businesses, including people who bring goods into the UK for sporting events or exhibitions, participated in the Call for Evidence. Businesses from various industries, including art, logistics, consultancy, horse racing and breeding, energy, motor, research, and yachting sectors, responded.
The responses to the Call for Evidence highlighted several proposals for improvement, including expanding the criteria to allow more traders to use TA, broadening the scope of the conditions of use to increase the different occasions that traders can use TA, and extending and simplifying timing requirements to allow for traders to bring goods in under TA for longer. Respondents also suggested improvements to simplify the process involved in using TA and the need for more detailed and clearer guidance.
Respondents stated that TA offers substantial financial and operational benefits to them, fostering international trade and catering to industry-specific needs. However, they also mentioned that there was an administrative and financial cost associated with it.
Following the Call for Evidence, HMT and HMRC are now exploring detailed options to simplify and support the temporary movement of goods into the UK. They will engage further with stakeholders in 2024 on options to improve TA.
1. Introduction
Since the UK left the EU, traders have been using temporary admission (TA) more frequently and widely. This is because it provides relief from import duties when moving goods temporarily from the EU to the UK. Annually, over £10 billion worth of goods are imported through TA into Great Britain.
From 29 June 2023 to 22 September 2023, HMT and HMRC ran a consultation exercise to understand the challenges faced by individuals and businesses when accessing and using TA. The aim was to identify areas for improvement and reduce burdens on users.
The consultation had three main areas of focus:
1. Identify the barriers that prevent users from accessing and using TA
2. Understand the difficulties or friction points that users face when using TA
3. Suggest ways to make TA more facilitative and user-friendly
Alongside the written responses to the consultation, HMT and HMRC also held a series of roundtable discussions with stakeholders from various sectors such as art, antiques, fashion, music, construction, thoroughbred, and pleasure craft industries. These roundtables aimed to gather initial insights and increase awareness of the consultation.
HMT and HMRC appreciate the time and effort that stakeholders put into providing detailed responses to the consultation. They are grateful for the thorough written feedback and insights gathered through the roundtable discussions. The summary of responses document aims to present the written evidence provided by stakeholders during the consultation exercise.
2. Eligibility and restrictions
2.1. Eligibility criteria
Transitional Arrangements (TA) apply to goods based on the owner's location and ownership. These arrangements can only be used for goods if the owner is not based in the UK. Respondents have suggested relaxing these rules as they hinder the use of TA for UK-based importers, especially those in the pleasure craft and energy sectors.
2.2. Time limits
Goods entering the UK under Temporary Admission (TA) have time limits, with most goods being allowed to remain for a maximum of 24 months. Respondents have suggested extending these time limits, with some industries recommending an extension beyond six months. Respondents also proposed standardising time limits or allowing them to vary based on the intended use of goods. Many respondents noted the administrative burden of applying for an extension. The TA time limits impact businesses' planning and export strategy, especially for long-term projects or high-value items. The TA time limit for the re-exportation of goods does not account for external factors such as the COVID-19 pandemic and EU exit.
2.3. Types of goods and specific use
Around 33% of respondents want the types of goods and their use to be changed to make TA more flexible. A majority of respondents who couldn't meet these conditions and access TA didn't import goods into the UK as a result.
Certain goods are eligible for TA, and these goods must be used for specific purposes. The list of eligible goods is seen as too restrictive, and respondents recommended adding specialized equipment, machinery, and spare parts.
Respondents also raised issues with the specific use to which the goods must be put. For example, some suggested expanding the list of eligible goods for sale or return. Others recommended that horses imported for sporting events should be eligible for TA.
Some respondents proposed that any good should be eligible for TA, regardless of its use, as long as it is re-exported in the same condition.
Respondents noted that unclear guidance made it difficult for traders to know whether their goods and their intended use were eligible for TA.
3. Accessing TA
When traders declare their goods to TA (Transitional Simplified Procedures), they can choose to use a prior authorisation from HMRC or get instant authorisation for the goods they are declaring through Authorisation by Declaration (AbD). Prior authorisation requires traders to apply to HMRC and demonstrate they meet specific criteria. This option may be the most convenient for frequent users. On the other hand, AbD is available for all goods and eligible traders for TA and is the most commonly used option. However, it will usually require the provision of a financial guarantee. Traders may also use oral or conduct declarations to enter their goods into TA AbD, which can reduce administrative costs. However, this option is only available for certain goods. The CfE (Call for Evidence) sought feedback on all the methods available to traders to access TA.
3.1. Prior authorisation
Prior authorisation is a permission given by HMRC to import certain goods into the UK under a special procedure called TA. Traders apply for prior authorisation to use TA without providing a financial security. To be authorised, traders must meet certain criteria and the authorisation only applies to specific goods. Respondents noted that prior authorisation avoids the need to provide a Customs Guarantee, which provides cashflow benefits and supports international imports into the UK. However, some traders have difficulty meeting eligibility conditions, particularly having appropriate records. Respondents suggested increasing the time traders retain their prior authorisation, simplifying guidance, and creating an online platform to manage authorisations.
3.2. Authorisation by Declaration
Traders import goods under Temporary Admission (TA) scheme using Authorization by Declaration (AbD) without prior authorization from HMRC. A Customs Guarantee is required, unless an oral or by conduct declaration is used. Half of the traders using AbD were satisfied, but the other half had issues. Respondents highlighted the issues with Customs Guarantee, reclaiming guarantee, and amending customs declaration. They suggested removing the Customs Guarantee requirement for AbD or reducing the Guarantee amount. Respondents also found guidance on AbD challenging. They suggested faster refunds using an automated system and better helpdesk support.
3.3. Oral and by Conduct
To summarize the text:
- Oral and by conduct declarations are ways of declaring goods to customs officials.
- Only eligible goods can be declared through oral or by conduct declarations.
- Respondents suggested allowing more goods to be eligible for these declarations.
- Greater documentation when importing goods through oral or by conduct declaration could improve procedures.
- The process for temporary imports should be simplified.
- The list of eligible goods for oral and by conduct declarations should be clearer on the GOV.UK website.
4. Costs and benefits of using TA
4.1. Benefits of TA
Several respondents have highlighted the crucial role played by TA in their businesses. They mentioned that TA makes it easier for them to import goods on a temporary basis. They also pointed out the financial benefits of using TA, including improved cash flow due to the suspension or removal of duties. Respondents from various industries mentioned that TA provides sector-specific advantages for them and their trading practices. They also noted that TA plays a beneficial role in promoting international trade, exhibitions, and other temporary imports. This, in turn, enhances the UK's position as a destination for global enterprise, which is advantageous for their businesses. Furthermore, respondents appreciated the fact that TA allows for streamlined customs processes, which reduces administrative burden, leading to smoother business operations and increased competitiveness.
4.2. Barriers to TA
In the survey, the costs associated with Transit Accompanying (TA) were identified as the biggest expenses. Respondents cited agent fees, Customs Guarantee costs, and staff time as major expenses. Many respondents noted the need for specialist customs agents, which can be quite costly. Staff time, administrative resources, and staff training were also mentioned.
The transition from CHIEF to CDS was cited as a system change cost of TA. Some respondents did not use TA because they were unaware of the requirements.
Respondents reiterated concerns about administrative complexity, uncertainty of rules, and unclear guidance.
5. Finding out about and understanding TA
5.1. Understanding TA
When reviewing the responses, it became clear that traders have some areas of uncertainty, as some respondents suggested improvements that already exist. This indicates specific areas where guidance can be enhanced. Respondents also recommended various methods to improve traders' comprehension of technical analysis, such as organizing seminars and workshops specifically on technical analysis or sharing online resources with traders to enhance their technical analysis knowledge.
5.2. Advice
The survey revealed that when traders required additional advice, the majority of them sought it from HMRC. Some traders used intermediaries such as customs agents for advice, while a few relied on online resources such as GOV.UK for insights. About half of the respondents expressed satisfaction with the advice they received. However, some traders faced challenges such as the guidance being too technical, unclear or that HMRC advice was received too late. Most respondents sought advice on the operations aspects of TA, while others sought help on regulatory or technical elements, as well as processing tools like CDS.
5.3. Guidance
Survey results showed that GOV.UK guidance was complex and lacked clarity, with technical jargon being a barrier. Respondents suggested centralizing guidance to a single webpage. Tailoring guidance to specific sectors and removing Customs jargon would help improve understanding. Faster, more accessible HMRC communication was suggested, tailored to specific industry requirements. Collaboration between traders and intermediaries was also emphasized.
6. Suggestions for improving TA
6.1. Process
The survey results suggest that the Trade Agreement (TA) rules can be improved by increasing their flexibility, simplifying the application processes and lengthening the time limits. Industry-specific solutions should also be developed to make TA more accessible.
Half of the respondents suggested reducing the costs associated with TA and introducing a digital platform for traders to view their TA status. Raising awareness amongst traders about the TA Customs procedures was also highlighted as a need.
6.2. Experience using TA outside the UK
The majority of respondents noted the differences in the TA requirement between the UK and EU member states.
Overall, however, respondents indicated very little experience with using TA outside the UK.
6.3. Other comments
Respondents want simpler processes and system changes, including reducing data sets required for Customs declarations. Art sector wants zero-rated import VAT for works of art. Pleasure craft sector wants UK owners of EU-based vessels to import into the UK with relief from UK VAT. Tax incentives or exemptions for temporary imports related to green energy initiatives were proposed.
7. Next steps
We received feedback from traders about their experiences using Temporary Admission (TA). Based on the feedback, we believe there is potential to make policy changes in three key areas to simplify and support the temporary movement of goods into the UK.
These include
expanding eligibility criteria,
widening the scope of conditions of use,
and extending and simplifying timing requirements.
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