Losses in warehouse
Source: gov.uk (2025-04-30)

What to do if your goods are destroyed or irretrievably lost under the customs warehousing procedure.

Non-chargeable losses in warehouse

When the total destruction or irretrievable loss of goods can be proven to arise from unforeseeable circumstances, force majeure, natural wastage or some other legitimate cause, customs duty may be waived.

Goods are considered irretrievably lost when they become completely unusable.

For information on the destruction of goods, see Destruction (https://www.gov.uk/guidance/special-procedure-customs-warehousing/destruction).

Natural wastage

When natural wastage is given as a reason for a non-chargeable loss within the customs warehouse procedure, it must be proven that the loss arises solely from the nature of the goods and not from the trader’s negligence or manipulation.

Negligence or manipulation means failing to comply with transporting, storing, handling, working or processing rules, as required by HMRC or by normal practice.

The following are examples of natural wastage:
- maturation
- natural fermentation
- humidity
- desiccation
- venting as gas or leaching
- temperature effects on a product
Force majeure

Force majeure is defined as abnormal and unforeseeable circumstances beyond the control of the trader, which could not have been avoided despite due care, such as an accidental fire or flood or failure of temperature control in a cold store.

This does not apply to circumstances where the fault has occurred on the part of the trader, its supplier or any other third party. Since it is extremely difficult to establish force majeure, HMRC expects force majeure to apply only in very limited situations.

Production losses

In general, the loss of goods through production, for example losses occurring through certain types of handling of the goods, can be treated as non-chargeable losses. This should not be confused with losses resulting from usual forms of handling, as described in sampling and testing (https://www.gov.uk/guidance/special-procedure-customs-warehousing/sampling-and-testing#eel-decline).

If such losses are a regular occurrence, it should be stated in the application and authorisation letter. Authorisation must be obtained prior to any loss rate being applied.

If customs debt is calculated using the nature, customs value and quantity of goods prior to usual forms of handling (https://www.gov.uk/guidance/special-procedure-customs-warehousing/usual-forms-of-handling-ufh-other-processing-and-records), production losses are not eligible for allowance.

When a loss will be charged

Losses in circumstances other than those mentioned in non-chargeable losses in warehouse will incur import VAT and a customs debt where the customs duty exceeds £9.

Liability for damaged, destroyed or irretrievably lost goods

Goods held in a customs warehouse, or placed under the customs warehousing procedure, must be handled, moved and stored safely and securely to prevent damage, destruction or irretrievable loss.

Traders remain liable to pay import VAT and customs duty if goods are damaged, destroyed or irretrievably lost due to accident or negligence while in the warehouse or under the procedure. For example, this includes a bottle of wine breaking due to insecure stacking or mishandling.

Missing, mislaid or stolen goods

Goods that are missing, mislaid or stolen cannot be considered non-chargeable losses in a warehouse. In these cases, customs duty must be paid.

If stolen goods are recovered promptly and returned to the customs warehouse, in the same state they were in when they were stolen, the customs duty for those goods can be repaid or remitted.

What duty rate will be charged on losses

The rate of duty charged for losses is the rate in force at the time the loss occurred. Where it is impossible to determine the time of the loss, the duty rate to be used is the highest rate in force between the last time the goods were known to have been in the warehouse and the date of notification of the loss.

Calculation of customs debt for lost goods

If the chargeable loss involves goods that have been lost in a customs warehouse, customs debt must be calculated at the full duty rate.