What is Equivalence? 

Outward Processing Example: 

A business authorised to use equivalence for Outward Processing will be able to import equivalent goods prior to exporting the goods the imports will be replacing, providing the goods for import meet the HMRC definition of equivalence.   

For example, the goods for import and exchange must have the same 8-digit commodity code, commercial quality, and technical characteristics as those to be exported. 

Inward Processing Example: 

A trader authorised for equivalence for Inward Processing will be authorised to replace goods imported to IP with equivalent free-circulation goods if the replacement goods meet the same criteria as those they are replacing (according to HMRC definition). 

What’s Changing 

Previously, traders authorised to use equivalence would need to evidence that equivalent goods were imported within a 3-month period. This period has been extended to 6 months. This extended period will be very welcome for those using prior equivalence, where meeting the 3-month deadline has proven challenging. 

Important Notes   

In the updated guidance, HMRC underlined that a UK business cannot use equivalence to offset exports of free-circulation goods if this means reducing import duties on imports for use on the UK market. 

The change to the authorised time period is not automatic.  Those traders authorised to use prior equivalence will need to make a request to HMRC to extend the equivalence period through their Authorising Office.  Details of the Authorising Office will be on the Special Procedure Authorisation Letter. 

The rules governing equivalence with Customs Special Procedures are complex and subject to HMRC authorisation. Below is a link to the updated HMRC guidance for using Prior Equivalence. 

Using similar goods to replace customs special procedure goods - GOV.UK 

A link to the HMRC Guidance using Customs Special Procedures is also provided below 

Pay less or no duty on goods you store, repair, process or temporarily use - GOV.UK