The Union Customs Code (UCC) enables importers to claim back customs duties under specific circumstances. This doesn’t cover the repayment of Import VAT, as this is a national tax administered under national VAT law.

For this reason Customs Information Paper 11 (14) advised traders registered for VAT, to claim import VAT back as input tax on their VAT return subject to normal VAT rules, when they were entitled to claim back customs duties.

Where a customs agent pays duties and import VAT on behalf of their customer (the Principal), and customs duties are reclaimed, the Principal claims back import VAT as input tax subject to the normal VAT rules and the agent receives these back from the Principal under a commercial arrangement.

But, FPOs won’t be able to claim back the import VAT as input tax on their VAT return, when an FPO pays duty and import VAT and the goods are:

  • imported under e-commerce
  • being returned under the rules of a distance selling contract
  • for a private, non-VAT registered individual

This is because:

  • the goods in question aren’t imported for their own business
  • they don’t meet the rules for claiming input tax in this manner

To address this anomaly HM Revenue and Customs (HMRC) has agreed to introduce a Trade Facilitation.

This facilitation will only apply to approved FPOs with a Memorandum of Understanding with HMRC and is not available to other agents or operators.

Trade Facilitation

In order to facilitate FPOs, with immediate effect, HMRC will allow you to submit an application for repayment under Article 174 of the UCC. You can do this by using the form C285 to request that the customs entry in question is invalidated. You must provide a schedule of entries to be invalidated as per the Annex (MS Excel Spreadsheet, 15.8KB) together with these supporting documents:

  • copy of export declaration
  • packing list identifying the goods
  • airway bill

These conditions apply:

  • the goods in question must have been sold under a distance selling contract as defined in Article 2 (7) of Directive 2011/83/EU and released for free circulation prior to being returned by the customer
  • the application for invalidation must be made within 90 days of the date of acceptance of the customs declaration
  • the goods must have been exported for return to the original supplier’s address or to another address indicated by the supplier or destroyed following the procedure outlined under ‘Destruction’


Destruction of goods under Article 197 UCC.

The Distance Selling Regulation doesn’t allow returned or undelivered goods to be destroyed, but it’s understood that in some circumstances it may be commercially more viable to destroy the goods rather than to export them. In such circumstances HMRC will allow the destruction of such goods in place of exporting them.

If you wish to take advantage of this concession, please ensure that your goods are destroyed using a recognised destruction facility who can provide a certificate of destruction. This certificate must be submitted to HMRC together with a packing list with your C285 claim for repayment.

Any resulting scrap material must be treated as non-Union goods and be declared to a customs procedure in accordance with Article 179 of Regulation 2015/2447.


If you require further information please contact:

National Duty Repayment Team
National Clearance Hub
2nd floor West Building
Ralli Quays
3 Stanley Street
M60 9LA

You can also email or telephone: 03000 585 344

Issued on the 15 January 2018 by Customer Strategy and Tax Design, Customs Directorate, HMRC.

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