Are you unsure what temporary storage is?
Temporary storage is a term used to refer to goods imported from a country outside of the EU and placed within a neutral, authorised warehouse until they are assigned a customs-approved treatment.
Warehouse operators, transport companies and freight forwarders use this procedure, enabling them to defer duty and tax payments on their goods whilst they are stored in a customs designated area.
Temporary storage means just that: goods are placed there for a set period until they are officially declared to customs and therefore subject to tax and duty payments. They cannot remain there indefinitely.
Time limits in temporary storage
The timescales for temporary storage depend upon the methods of transportation used to import goods into the UK:
This is 20 days for goods imported via road or air.
This is 45 days for goods imported by sea and accompanied by a summary declaration.
Is it possible to extend these timescales?
Yes, as long as one applies in writing to the National Clearance Hub, Salford at HMRC. Decisions are made on an individual basis and depend on the circumstances.
A refusal or a deliberate flouting of the rules will result in the goods being confiscated by UK customs. These will be sold or destroyed.
How temporary storage works
The standard procedure is for one to pay excise duty and VAT on goods imported into the UK that are then declared to UK customs officials. However, there is the option to defer this with ‘temporary storage’.
This process enables one to store their goods within a customs approved zone such as a transit shed, warehouse or depot that is free from duty payments. Temporary storage also refers to these approved premises.
These premises are based at airports and maritime ports around the UK.
Goods coming into the UK from outside the UK are presented to UK customs via an authorised electronic trade inventory system. Goods have to be shown within 3 hours of arrival via air or sea followed by a summary declaration within 24 hours of their initial appearance. This is followed by a full customs declaration that acts as an official handover of the goods for a custom approved treatment, i.e. usage. These treatments include free circulation in the UK, being placed under the jurisdiction of HMRC or discarded and passed to the Exchequer. In some cases, they will be destroyed.
With temporary storage, one only has to present goods and make a summary declaration within the timescales. A written ‘deed of undertaking’ has also to be signed that acts as a form of security. Consider this as a guarantee of one’s trustworthiness and honourable intentions as regards trade procedures.
Once these have expired, a full customs declaration is made and duty and taxes paid. The goods are then available for transportation anywhere in the UK.
Advantages of temporary storage
There are benefits to using this procedure. These are:
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Sufficient time to obtain an official import licence or any other relevant documentation to be presented, prior to making a full customs declaration. Many documents take some time to be produced, and preference certificates can arrive days after the shipment has arrived into the Port or Airport.
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Using temporary storage facilities saves the cost of having to pay for premises. If you are waiting for documents, then why pay storage charges in the airline bond or on quay?
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Defer customs and excise duty payments, e.g. VAT
There is the option to speed up this process using HMRC Customs Freight Simplified Procedures subject to conditions.
Quality premises
Temporary storage premises have to meet a set of HMRC criteria that determines their fitness for use. These include:
- Conforming to UK health & safety guidelines
- Safe, secure and robust
- Suitable for the storing and loading of goods
- Have authorised stock records
To summarise: storage premises have to be able to cope with all sizes and types of goods coming into the UK from a non-EU country.
Warehouses, depots and transit sheds are permissible as are tanks and other types of premises although in the latter case, their suitability is considered on a case-by-case basis.
Handling restrictions
Goods placed in temporary storage are subject to a number of restrictions governing their handling. Their original condition must be preserved during their time in storage and prior to their removal.
The aim is to prevent any alteration or modification to the appearance of the goods before they are assigned to a customs approved treatment. This equally applies to any processing of the goods.
There is one exception to this: goods in temporary storage can be broken apart for purposes of an essential examination. However, they must be reformed and presented in their original state following the expiration of the timescales.
They can then be moved after a full declaration and assignment to a customs approved treatment.
Movement of goods
Goods can be moved between temporary storage facilities although only if authorised by HMRC. This is carried out using the Community Transit procedure using a new computerised transit system.
There are certain types of imported goods that cannot be moved into temporary storage until they have undergone a series of comprehensive checks by customs officers.
These include firearms, animal products, endangered species of flora and fauna, foodstuffs and plants.
Conclusion
Goods come into the UK from non-EU countries on a regular basis and it is important that they are checked and approved before they are freely circulated through the country.
Tax and duty payments have to be made which are a major concern for warehouse operators, transport companies and freight forwarders. However, temporary storage is one way of easing these costs.
Placing goods into a temporary storage facility means that one has time to obtain the necessary documentation and licences without having to pay duties and taxes during this period. In effect, it buys one ‘breathing space’.
Anyone who imports goods into the UK knows very well, the costs involved in doing so any option to ease these albeit on a temporary basis is a welcome state of affairs.