Discharge of the customs warehousing procedure
Source: gov.uk (2025-04-30)

What to do when goods are entered to another customs procedure or destroyed.

The customs warehouse procedure is discharged when the goods are entered to another customs procedure, including the free circulation and export procedures, or are destroyed, and the necessary evidence of discharge is held.

Removal entries

All export customs declarations are processed by Customs Declaration Service (CDS). Export customs declarations must be made quoting one of the appropriate warehouse removal procedure codes (DE 1/10) together with all relevant additional procedure codes (DE 1/11) as detailed in the CDS Declaration Completion Instructions for Exports (https://www.gov.uk/government/publications/uk-trade-tariff-cds-volume-3-export-declaration-completion-guide).

Release to free circulation — acceptance of the entry

The date of acceptance of the entry legally establishes the duty rate that applies regardless of when the goods are physically removed from the warehouse.

Goods must not be physically removed from the customs warehouse until the warehousekeeper has evidence that HMRC have released the goods and the details have been entered into the stock account. This does not apply if the Entry in Declarant’s Records (EIDR) is used.

Duty point for removals to free circulation

Duties become payable when an entry is presented and accepted by HMRC. Once the warehousekeeper has evidence that the entry has been accepted, a duty point is created and the goods can be recorded as removed in the stock account and physically removed from the storage facilities. The date of acceptance of the declaration establishes the duty rates that apply.

Where removals are made using the Simplified Customs Declaration Process (SCDP), the date of entry into EIDR for the removal constitutes the acceptance date and sets the date for submission of the supplementary declaration.

First In — First Out (FIFO)

Where goods have been entered under several declarations and they have the same 8-digit commodity code, commercial quality, technical characteristics, and it is not possible to differentiate between the goods, removal from the customs warehousing procedures may be made on a ‘first in – first out’ basis.

First In-First Out (FIFO) allows the warehousekeeper to use the earliest entry against the earliest removal so that the discharge of duty liability is made on a ‘first in — first out’ basis. Approval of FIFO does not remove the normal obligations that have to be met by the warehousekeeper such as, ensuring that if common storage is used the trader doesn’t obtain a duty advantage for the goods greater than they are entitled to and that if a tariff preference is claimed that the proof of origin is valid and appropriate to the goods removed.

More information can be found at Common Storage (https://www.gov.uk/guidance/special-procedure-customs-warehousing/common-storage#eel-decline).

Diplomatic privilege

Under international agreements, subject to various conditions, diplomatic missions, consulates and their senior staff may remove goods from a customs warehouse, duty and VAT free under the diplomatic privilege arrangements on condition that the goods are for the official use of the mission or for the personal use of those senior staff or dependants. The removal entry should be made on CDS supported with form C426.

Additional procedure codes are 1DP (diplomatic goods for official use) and 2DP (diplomatic goods for personal use).

Visiting or NATO forces

Goods may be removed from a customs warehouse, customs duty and import VAT free if it is to supply the official use of a visiting force or to individual visiting forces personnel. The removal entry should be made on CDS using DE 1/10 procedure code 4071, together with all the relevant DE 1/11 additional procedure codes. DE 1/11 additional procedure code 1NO should be declared for imports for official use by visiting forces or 1NP for imports for personal use by qualifying members of visiting forces.

More information can be found at:
- CDS declaration and customs clearance request instructions (UK trade tariff: volume 3 for CDS) (https://www.gov.uk/government/collections/uk-trade-tariff-volume-3-for-cds--2)
- VAT relief for suppliers to visiting forces (VAT notice 431) (https://www.gov.uk/guidance/vat-relief-for-suppliers-to-visiting-forces-notice-431)
Supplies to export or duty free shops located portside or airside

Goods intended as supplies for export or duty-free shops may only be transferred to the shop if it is separately authorised as a customs warehouse. If the export shop does not hold a customs warehouse authorisation the goods must be declared to free circulation, with any customs duty and import VAT paid prior to the supply being made.

Sales from export or duty free shops

Sales from export or duty-free shops to entitled passengers (travelling to destinations outside the UK) and non-entitled passengers are controlled at the point of sale. Where sales are made to entitled passengers, the records are to be noted and declarations made under the SCDP Entry in Declarant’s Records (EIDR) with the following information to evidence the discharge of the customs warehousing procedure:
- the travellers boarding card reference number
- the export destination
- details relating to the sales invoice
- description of the goods
Goods imported for trade promotion purposes — samples of goods of negligible value

Full relief from customs duty and import VAT on samples for trade purposes is available for goods which are of negligible value imported from outside the UK. Certain conditions will need to be met to claim the relief such as, the samples are for the sole use of soliciting orders and the samples must be rendered permanently unusable.

To claim the relief, an import declaration will need to be made on CDS. Additional procedure code C30 will need to be entered in DE 1/11 to claim relief on customs duty. To claim relief on import VAT, additional procedure code F45 must also be declared in DE 1/11.

More information on commercial samples can be found at pay no import duty and VAT on importing commercial samples (https://www.gov.uk/guidance/pay-no-import-duty-and-vat-on-importing-commercial-samples), such as conditions and how to declare.

This section does not cover goods removed for sampling as a usual form of handling.

Removal to another special procedure

Customs warehousing can be discharged by declaring goods to inward processing, temporary admission or authorised use. A full declaration or EIDR can be used, but EIDR cannot be used if it was used to enter the goods into the warehouse, and the stock records are not updated in real time.

For Northern Irish goods, where the declaration to another customs procedure will be in another EU Member State, the goods may be moved using accurate records of the location and movement of the goods. This method of discharge must be in the customs warehouse authorisation. It requires consultation between the Member States (MS) involved, with the office of discharge named in the customs warehouse authorisation and the office of placement must be in the authorisation held in the other MS.

Reclaiming Import VAT

For private customs warehousing, the warehousekeeper must also be the depositor of the goods into the warehouse. They do not have to be the actual owner of the goods, but they must be the person in whose name the goods are deposited into the private customs warehouse.

This does not apply to removals from a private customs warehouse to another customs procedure, including to free circulation.

Ownership of the goods can change whilst in the warehouse. The new owner will need to be the person named in the declaration releasing the goods to free circulation to reclaim the import VAT. Import VAT cannot be reclaimed by remote and online retail sale customers.

Owners using the goods in their business on release from the customs warehouse, can reclaim the import VAT and to do so, their details will need to be input in Data Elements 3/15 and 3/16 on the removal declaration.

More information on reclaiming import VAT can be found at VAT Input Tax (https://www.gov.uk/hmrc-internal-manuals/vat-input-tax/vit13300).

Destruction of customs warehousing goods

It is necessary to make sure that any notation in the records regarding destruction of customs warehousing goods is adequately supported by evidence. For example, it should be verified that approval from the supervising office was obtained before the destruction occurred, and a post-destruction certificate is sent to the supervising office.

More information on the requirements for undertaking destruction can be found at destruction (https://www.gov.uk/guidance/special-procedure-customs-warehousing/destruction#eel-decline).

Anti-dumping or countervailing duty

Warehoused goods which are subject to anti-dumping duty or countervailing duty will be liable for any anti-dumping duty or countervailing duty in force on the date of removal to free circulation.

Check when you need to pay anti-dumping, countervailing and safeguard duties (https://www.gov.uk/guidance/check-when-you-need-to-pay-anti-dumping-countervailing-and-safeguard-duties).

EU’s Common Agricultural Policy (CAP) related requirements

Import licences for CAP goods in Northern Ireland are not required on importation when goods are warehoused, but they must be produced when the goods are released to free circulation. The removal entry must contain all the necessary licensing details.

Documentary Proof of Origin (DPO) for textile products

A documentary proof of origin must be produced at the time the goods are entered to free circulation.

Department for Business and Trade (DBT) licences — goods not restricted

For goods that require an import licence, a valid licence must be presented when the goods are removed to free circulation. The warehousekeeper must note in the stock account that the goods are not to be removed from the warehouse to free circulation or to another customs regime unless a valid licence is produced.

Goods may still be removed to free circulation using an expired import licence on a case-by-case basis. However, special arrangements will apply to certain goods where the licence is to be returned to Department for Business and Trade (DBT) within 10 days of expiry.

Department for Business and Trade (DBT) licences — restricted goods

Customs warehousing does not remove the need to comply with any import, export or re-export prohibitions or restrictions. If goods are restricted, the normal requirements for entry to free circulation still apply on entry to customs warehousing. Further information is available in the Volume 1 of the tariff.

Ozone Depleting Substances (ODS)

When producing, importing, exporting and selling ODS, it is required to:
- apply for a licence from the Department for Environment, Food and Rural Affairs (DEFRA) for importing or exporting ODS
- apply for quota to import or produce ODS
- record and report ODS that are imported, exported, sold or destroyed
It is against the law to import or export ODS without a valid import or export licence from DEFRA, or to import or export ODS for any other uses.

More information on how to apply for a licence can be found at ozone-depleting substances: guidance for users, producers and traders (https://www.gov.uk/government/collections/ozone-depleting-substances-guidance-for-users-producers-and-traders).

Tariff preferences or quotas and cultural goods

A preferential rate of duty may be claimed on removal of warehoused goods to free circulation provided:
- the claim to preference is supported by a valid proof of origin and the relevant document code is inserted in data Element 2/3: Documents and Other Reference Codes of the Customs Declaration Service (CDS) (https://www.gov.uk/government/collections/data-element-23-documents-and-other-reference-codes-of-the-customs-declaration-service-cds) when the goods are removed from the customs warehouse
- the goods are identifiable with the imported goods and are available for examination
- a preferential rate is available (if the preference being claimed is subject to a tariff quota or the quota has not been exhausted or full import duty has not been remitted)
- there is no reason to doubt the declared origin of the goods
- the goods were consigned direct from the country of origin
Proof of origin is only valid provided that:
- the original proof of origin details were noted in the stock records on receipt of the goods into the customs warehousing arrangements
- the proof of origin was not issued more than two years before the claim to preference is made
More information on the processing of claims for tariff preferences can be found at using preference agreements for goods in a customs warehouse (https://www.gov.uk/guidance/using-preference-agreements-for-goods-in-a-customs-warehouse).

Tariff classification

Goods in the customs warehousing arrangements generally do not change their tariff classification unless:
- goods have been subject to a usual forms of handling which allows the tariff classification to change — check if you can carry out simple repairs or process your goods in a customs warehouse (https://www.gov.uk/guidance/check-if-you-can-carry-out-simple-repairs-or-process-your-goods-in-a-customs-warehouse)
- general interpretative rule 2(a) is being applied to removals
Classification using general interpretative rule 2(a)

General interpretative rule 2(a) allows goods entered into customs warehousing arrangements classified as individual items or parts of an incomplete or unassembled machine to be re-classified as a finished article when removed from the customs warehousing procedure.

To qualify, the parts are to be presented together in co-related quantities to make a certain number of the finished article (kits). These kits must contain third country elements which form the essential character of the finished article.

An example of a non-qualifying use of this rule would be where disassembled, incomplete components are declared to customs warehousing, the components are then released to free circulation under the commodity code of the finished item with many of the fundamental components of the finished item missing. The finished item cannot fulfil its function as the essential character (of the finished item) is not present. In these circumstances the trader may be able to use an alternative procedure such as inward processing.

To find out what can be accepted as the essential character of a finished item, ask HMRC for help classifying your goods (https://www.gov.uk/guidance/ask-hmrc-for-advice-on-classifying-your-goods).

Ship stores removed from a customs warehouse

For UK deliveries — ships berthed in UK — the ship’s master should place a request to discharge the goods to stores on commercial documentation bearing a declaration that the ship is entitled to duty free ships stores.

The customs warehouse must hold the despatch note with additional copies:
- one copy for lodging with supervising office in advance of despatch
- 2 copies to travel with the goods after which one is returned to the warehouse with certificate of receipt
- one copy for the warehouse records
The despatch note must contain data required by HMRC.

Aircraft stores

The procedure for discharge to aircraft stores is similar to that for ships stores.