Processing operations
Source: gov.uk (2025-04-30)

Information on processing operations.

Processing products

Processed product is the name given to goods that result from the importers processing operations.

There are two types of processed products, known as:
- Main Processed Products (MPP)
- Secondary Processed Products (SPP)
Main Processed Products (MPPS)

If an authorisation is granted it is issued based on specific goods being entered to inward processing for a specified processing operation. The goods produced because of that processing operation are ‘processed products’. Relief can only be claimed for those processed products that will be re-exported from the UK or put to a disposal that discharges IP. These should be identified as the Main Processed Products (MPPs).

The trade and technical description of the MPP should always be in sufficient detail to clearly identify them. Where different goods and different processes are involved, the application must show clearly which goods are being used to produce which products and how the goods entered to IP are identified in each product.

Relief is only granted for the quantity of goods entered to IP that are in any MPP re-exported or put to an eligible disposal, this will need to be identified when the rate of yield is set.

Secondary Processed Products

Secondary processed products (SPPs) are any by-products that are left over because of producing the MPP. Operators may consider these waste or scrap but if there are any by-products produced, they must be clearly identified on the application as SPP and considered when the rate of yield is set.

If any SPP are produced there will be a duty liability on the amount of goods that were entered to IP that are contained in the SPP. This duty liability is calculated at the duty rate applicable to the goods entered to IP on the value of those goods contained in the SPP.

Few examples of MPPs and SPPs are:

A company importing wood to make furniture, the MPP would be items such as tables and chairs and the wood shavings and offcuts would be SPP.

A food producer importing potatoes to make oven chips, the MPP product would be chips, the Potato peelings would be the SPP.

In both instances, producing the required product creates a by-product. When applying for IP, importer must distinguish between their MPP and their SPP. SPP should not be treated as production losses, waste, or scrap, only goods resulting from destruction of IP goods under customs supervision are treated as scrap or waste.

How importers can identify imported goods in the processed products

A condition of IP is that the imported goods must be identifiable in the processed products. If it is not possible to do this by physical means the importer must be able to produce documentary evidence which shows that the imported goods were used to produce the products declared for free circulation, re-exported or eligible disposal.

The means of identification must be specified on the application and authorisation.

The following are suggested methods of identification:

serial or manufacturers numbers

plumbs, seals, clip marks or other distinctive marks fixed to the IP

the taking of samples, illustrations, or technical descriptions

stock records or other supporting documents such as contracts, correspondence, and invoices which show clearly that the processed products have been manufactured from the entered goods

This list is not exhaustive, and any method proposed by the authorisation holder which enables the import goods to be identified can be accepted.