Most relief schemes need HMRC approval before goods arrive, so planning ahead is where the savings start.
Key takeaway
UK import duty relief schemes are HMRC procedures that let a business pay less import duty, pay it later, or pay none at all on goods that leave the UK again. The right scheme depends on what happens to your goods after import: store them, process them, use them temporarily, send them abroad for repair, or put them to a specific use. Most need HMRC authorisation before the goods arrive, and many businesses use more than one.
Relief schemes are a standard part of how UK importers manage duty. They are written into UK customs law, run by HMRC, and used by businesses of every size, from ecommerce brands holding stock in a bonded warehouse to engineering firms repairing machinery for customers abroad. HMRC's own research found that 4 in 10 smaller importers were already using at least one customs procedure or authorisation back in 2018.
Since then, trade and the schemes have both grown. 334,294 businesses imported goods in 2025, 4% more than the year before, and the number buying only from outside the EU rose by 12%. HMRC has also made reliefs easier to use: in 2025 it raised the number of times a business can use authorisation by declaration from 3 to 10 a year. And four times as many smaller businesses hold AEO status, HMRC's trusted trader standard, as in 2016.
This guide covers each scheme in plain terms: what it saves, who it suits, the HMRC rules, and where to go next.
Types of customs duty relief in the UK
Find the row that matches what happens to your goods after they arrive. That is the scheme to look at first.
| What happens to your goods | Scheme to look at | What it saves |
|---|---|---|
| Stored before you sell them, in the UK or abroad | Customs warehousing | Duty and import VAT on hold until sold in the UK. No UK duty on goods exported again |
| Processed, assembled or repaired, then sold | Inward processing (IPR) | Duty and import VAT on hold. No UK duty on products exported |
| Used in the UK for a while, then sent back | Temporary admission | Full or partial relief from duty and import VAT |
| Sent abroad for repair or processing, then brought back | Outward processing (OPR) | Duty charged only on the value added abroad |
| Put to a specific use, such as aircraft, ships or oil and gas | End use | Reduced or zero duty rate |
| Exported and then returned unchanged | Returned goods relief, claimed on your import declaration | No import duty if back within 3 years |
| Bought from a country with a UK trade agreement | Tariff preference, backed by a binding origin ruling | Reduced or zero duty if the goods meet the rules of origin |
| Stored or processed inside a Freeport customs site | Freeport customs procedure | Duty, import VAT and trade remedy duties on hold |
Many businesses combine schemes. Goods can sit in a customs warehouse and then move into IPR for processing, with duty still on hold. AEO status, covered in section 9, makes most of these easier to get and cheaper to run.
1. Customs warehousing (bonded warehouse)
A customs warehouse, more often called a bonded warehouse, lets you store imported goods with customs duty and import VAT on hold for as long as you need. You pay when goods are released for sale in the UK, at the rates in force on that day. Goods exported again leave without UK duty.
Example: an importer brings in £600,000 of stock a year at 12% duty and sells 20% of it abroad. That is £14,400 of duty never paid, and the rest is paid only as stock sells in the UK.
Best for: importers that hold stock for weeks or months before it sells, especially if some of it goes to customers abroad. Typical users include homeware, fashion and toy importers, ecommerce brands, timber merchants, machinery dealers and steel stockholders.
Key rules: only simple handling is allowed, such as repacking, labelling and quality checks. Every movement must be recorded, and HMRC may ask for a guarantee unless you are an AEO or meet the AEO conditions.
See how customs warehousing works with Readyset, or read how to set up a bonded warehouse in the UK.
2. Inward processing relief (IPR)
Inward processing relief lets you import goods to process, assemble or repair them with customs duty and import VAT on hold. Excise duty can also be delayed. If the finished products are exported, no UK duty is paid on the imported goods. If they are sold in the UK, duty becomes due, worked out either on the imported goods or on the final product, and you choose which in advance.
Example: a manufacturer imports £300,000 of components a year at 6% duty and exports 40% of what it makes. Under IPR, £7,200 of duty is never paid on the exported share.
Best for: manufacturers using imported materials or components, businesses repairing or refurbishing goods for customers abroad, and food, chemicals, textiles and engineering businesses that export part of their output.
Key rules: authorisation by declaration, with no separate application, can be used up to 10 times in a rolling 12 months for goods worth up to £500,000 per import. Regular users need a full authorisation. A guarantee may be needed, and records must link every imported item to what happened to it.
Read how to apply for inward processing relief, or compare customs warehousing vs IPR.
3. Temporary admission
Temporary admission lets you bring goods into the UK for a limited time and use them here, then send them back out. Qualifying goods get full relief from import duty and import VAT. Where full relief does not apply, partial relief charges 3% of the import duty for each month the goods are in the UK, never more than the full duty.
Example: for a £100,000 piece of testing equipment brought in for a project, full relief can save upwards of £22,000 in duty and import VAT that would otherwise be paid upfront.
Best for: exhibitions and trade shows, film, TV and event equipment, samples, professional tools brought in for a project, and goods for testing.
Key rules: the goods must not be changed, apart from routine maintenance, and must leave before the deadline. For short trips with exhibition goods, samples or professional equipment, an ATA Carnet can be simpler.
Read our temporary admission guide.
4. Outward processing relief (OPR)
Outward processing relief is for goods you send abroad for repair or processing and then bring back. Instead of paying duty on the full value when they return, duty is worked out on the difference between the value of the returned goods and the value of the goods you sent. Repairs carried out free of charge under warranty get full relief from duty and import VAT.
Example: a UK engineering firm sends a £200,000 machine abroad for a £20,000 specialist repair. Under OPR, duty is worked out on around the £20,000 the repair added. Without OPR, duty could apply to the full value of the machine.
Best for: machinery and plant owners, aerospace and defence suppliers, and manufacturers that use overseas specialists for finishing, testing or repair.
Key rules: apply at least 30 days before the goods leave. Authorisation by declaration is available for repairs only, up to 10 times in a rolling year. Read our guide to inward and outward processing.
5. End use relief
End use relief, also called authorised use, lets you import certain goods at a reduced or zero rate of duty, as long as they are put to a specific use within a set time. If the goods are used for anything else, the full duty becomes due.
Best for: aircraft and aerospace, shipbuilding and ship repair, offshore oil and gas, military supplies, and some food processing, such as certain cheese, fish and prawns.
Key rules: apply at least one month ahead, keep records showing the goods were used as authorised, and expect that a guarantee may be needed.
6. Returned goods relief
If goods you exported come back to the UK within 3 years without being changed, returned goods relief removes the import duty. Work to keep the goods in working order is allowed. Import VAT relief also applies when the person importing them is the same person who exported them.
Best for: goods back from exhibitions or trials, rejected or unsold goods returned by customers abroad, and equipment returning from overseas projects.
7. Tariff preferences under trade agreements
The UK has trade agreements with more than 70 countries and territories, plus the EU. Goods that meet the rules of origin in an agreement can be imported at a reduced or zero rate of duty. The UK's Developing Countries Trading Scheme also gives lower or zero tariffs on many goods from developing countries.
Key rules: the goods must meet the rules of origin, and you must hold valid proof of origin before you claim. Goods from an EU supplier are only duty free under the UK EU agreement if they qualify as EU originating. Being shipped from the EU is not enough on its own.
For certainty, a binding origin ruling confirms where HMRC considers your goods originate, and a binding tariff ruling confirms the commodity code that sets the duty rate. For a real example of how origin decisions play out, read the Morrisons rules of origin ruling.
8. Freeport customs procedure
There are 12 Freeports across Great Britain: 8 in England, 2 Green Freeports in Scotland and 2 in Wales. Inside a Freeport customs site, goods can be stored or processed with customs duty, import VAT and trade remedy duties, such as anti dumping duty, on hold while they stay under the Freeport customs procedure. Goods exported from the site under the procedure do not need an export declaration.
HMRC's own examples also describe duty inversion: when goods are processed in a customs site, duty can be paid on the final product or on the imported goods, whichever is lower. This does not apply to goods subject to anti dumping duty.
Key rules: the benefits only apply inside an approved customs site, which is run by a Customs Site Operator, and businesses using it need their own authorisation. A customs warehouse gives similar duty suspension at any approved location, including your own premises. Read our guide to Freeport customs benefits.
9. AEO status: the key to easier authorisations
Authorised Economic Operator status is not a relief scheme. It is HMRC's trusted trader standard, and it makes the schemes above easier to get and cheaper to run. AEO status can bring:
a reduction or waiver of customs comprehensive guarantees
a 70% reduction in a duty deferment account guarantee
fewer checks on your goods
a faster application process for customs simplifications and authorisations
For customs warehousing, HMRC does not ask for a guarantee from AEOs, or from businesses that meet the AEO conditions. Check where you stand with our free AEO readiness checklist, read how to apply for AEO status, or see whether AEO is worth it for your business.
Readyset results across relief schemes
10. Already paid too much duty?
If duty was overpaid, for example through the wrong commodity code or a missed preference, it can be claimed back from HMRC within 3 years. After that, the money cannot be recovered. VAT registered businesses correct overpaid import VAT through their VAT return instead. Our duty reclaim service reviews your past imports and makes the claim for you.
Most VAT registered importers already use postponed VAT accounting, which means import VAT is accounted for on the VAT return instead of being paid at the border. For them, the main saving from any relief scheme is usually on duty.
Our recommendation
Start with your import data from the last 12 months: what you imported, what you paid in duty, and what happened to the goods afterwards. That shows which schemes apply and what each one is worth before you apply for anything. If you hold stock before it sells, our free bonded warehouse calculator gives you a first estimate in a minute.
Find out which relief schemes fit your imports. Readyset is a British customs consultancy working with importers across the UK and worldwide. We will review your import data and show you what each scheme could save, free of charge and with no commitment.
Book a free consultationFrequently asked questions
What are import duty relief schemes?
They are HMRC procedures that let a business pay less import duty, pay it later, or pay none on goods that leave the UK again. The main ones are customs warehousing, inward processing, temporary admission, outward processing, end use, returned goods relief, tariff preferences and the Freeport customs procedure.
Which relief scheme is right for my business?
It depends on what happens to your goods after import. Storing them points to customs warehousing, processing or repairing them points to IPR, using them for a limited time points to temporary admission, and sending them abroad for repair points to outward processing.
Can I use more than one relief scheme?
Yes. Many businesses combine them. For example, goods can be stored in a customs warehouse and then moved into inward processing, with duty still on hold.
Do I need HMRC authorisation to use a relief scheme?
For most of them, yes. Customs warehousing, IPR, outward processing, temporary admission and end use all need authorisation, usually applied for at least one month ahead. Tariff preferences need valid proof of origin, and returned goods relief is claimed when the goods are imported.
Do relief schemes cover import VAT as well as duty?
Several do. Customs warehousing and IPR suspend import VAT along with duty, and temporary admission can give full relief from both. Most VAT registered importers already use postponed VAT accounting, so the main saving is usually on duty.
Do I need a guarantee for a relief scheme?
HMRC may ask for a guarantee to cover the duty on suspended goods. AEO status can reduce or waive it, and for customs warehousing no guarantee is needed if you are an AEO or meet the AEO conditions.
Can I claim back import duty I have already overpaid?
Yes, within 3 years. Claims for overpaid duty must be made to HMRC within that time, after which the money cannot be recovered. VAT registered businesses correct overpaid import VAT through their VAT return. Our duty reclaim service handles the claim for you.
Are Freeports better than a customs warehouse?
Not always. Freeport customs sites add benefits such as duty inversion and the suspension of trade remedy duties, but only inside an approved site. A customs warehouse suspends duty and import VAT at any approved location, including your own premises.
Sources (checked October 2026): GOV.UK, Customs warehousing · GOV.UK, Inward processing · GOV.UK, Import goods temporarily · GOV.UK, Outward processing relief · GOV.UK, End use relief · GOV.UK, Returned goods relief · GOV.UK, The UK's trade agreements · GOV.UK, Freeports handbook · GOV.UK, AEO certification · GOV.UK, Claim a repayment of import duty · HMRC, Customs importer and exporter population 2025 · HMRC, SME use of customs procedures (2018) · UK Parliament, Written statement HCWS607 (2025) · HMRC, UK AEO presentation to the WTO (2025)
