As part of its slate of Customs measures announced for the Spring Budget 2023, the UK government confirmed yesterday, March 15, that AVRs will soon be a feature of the UK Customs regime. The long awaited mechanism will allow for legally binding rulings on the Customs Valuation methodology for the specified goods in a particular scenario, for a period of three years (subject to cancellation or withdrawal).
Amendments will be made to the UK legislative framework for Customs to allow for AVRs. This will allow the UK to meet the 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 Taxation (Cross-border-Trade) Act 2018 (“TCBTA“). This gap is a feature of Brexit in many ways since the EU did not have in place a mechanism for AVRs at the time (although the equivalent EU Binding Valuation Information system is in the pipeline).
The Government will introduce legislation in the Spring Finance Bill 2023 to amend section 24 of the TCBTA. As with the existing regime for binding tariff classification and advance origin rulings, under the amended legislation, the Government will be able to publish a Notice (with force of law) setting out the system for AVRs.
The UK’s AVR Notice will set out the following information:
- specify cases in which rulings need not be given;
- how applications can be made (including their form, the information to be contained in them and any documents to accompany them);
- establish the time limit for HMRC to make a decision on an application;
- outline the period for which, and other conditions subject to which, the rulings are to have effect;
- establish the form in which the rulings are to be given;
- establish the process under which withdrawals or amendments of rulings can be made;
- the extent to which rulings may be relied on by applicants; and
- provision requiring any person to whom a ruling has been given to disclose that fact to HMRC.
The amendment to the TCBTA 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 get in touch with a member of our team.