How to calculate the customs rate of yield
For inward processing, relate the imported input quantity to the processed output, stating the units and ratio direction. Give each processing task its own yield and calculate main and secondary products separately. Prepare the material data with Cambridge China Bridge.
Define the input and output
HMRC asks for the expected rate of yield: the processed products made from goods entered to inward processing. Start a worksheet with the imported material, its measurement unit, the processing task and each resulting product. For the wider scheme, see inward processing for Chinese materials.
Make the ratio direction explicit
HMRC’s example uses 300 metres of cloth to make 100 identical clothing items, giving an input-to-output ratio of 3:1. Divide the input quantity by the output quantity to express material used per item. Label both units beside the ratio so nobody reads it backwards. Use measured trial consumption as your working basis, rather than the factory’s quoted purchase quantity.
Separate processing tasks
HMRC says each processing task has its own rate of yield. Give cutting, forming or assembly separate worksheet entries where these are distinct tasks in your operation. Show the material entering and the output leaving each task, with intermediate products clearly named. Ask your customs adviser to review the task boundaries before submission; avoid a blended ratio that hides where material is consumed.
Identify main and secondary products
Main processed products are the goods you apply to make. Secondary processed products are processing by-products, which HMRC distinguishes from production losses, waste and scrap. You must calculate quantities for both product categories using yield. Keep separate worksheet entries for intended products, by-products and material losses; ask your adviser about uncertain classifications rather than labelling every offcut a secondary product.
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Build a worksheet you can reconcile
Ask the Chinese factory for material specifications, batch identifiers and measured quantities, then match these to your UK processor’s trial and production sheets. Record unused material, output and losses separately, and investigate unexplained differences. Keep the assumptions and supporting sheets together. Continue with inward processing stock records and discharge when organising the wider record trail.
Frequently asked questions
How do I calculate an input-to-output ratio?
Divide the measured input quantity by the output quantity. State the units and label the direction, such as metres of imported cloth per finished clothing item.
Can I use the same yield for every process?
HMRC says each processing task has its own rate of yield. Separate the tasks and show their inputs and outputs rather than submitting a blended figure.
Are scrap and waste secondary processed products?
HMRC distinguishes secondary processing by-products from production losses, waste and scrap. Keep them separately identified and ask your customs adviser about uncertain cases.
What information should I ask my Chinese factory for?
Ask for material specifications, batch identifiers and measured quantities. Your UK processor’s trial records should show how those inputs translate into products and losses.