Do design costs belong in customs value?
Ask your customs broker to confirm whether buyer-supplied design, engineering and development work belongs in UK customs value, considering where it was carried out, whether it was necessary for production and whether it was supplied free or at reduced cost. Confirm the treatment of research and preliminary sketches separately. Prepare the supporting breakdown with Cambridge China Bridge.
Start with how the work reached the factory
This guide concerns buyer-supplied work used to make goods imported from China into the UK. If you commission work and pass it to the factory free or at reduced cost, it may be an assist. For the wider valuation calculation, see what goes into customs value. For physical supplies, see our guide to free components and customs value.
Separate buyer-supplied work from charges made by the goods supplier. Start with the price actually paid or payable, and add qualifying costs only where they are not already included. A separate development invoice should prompt a review of the payment arrangement, rather than an automatic exclusion. For brand licence payments, see brand royalties and customs value. For mixed licence payments, see our guide to splitting licence fees for customs value.
Record where the work was performed
Ask your customs broker to confirm how the work’s location and its necessity for producing the imported goods affect this design assist addition, including the treatment of buyer-supplied work performed in the UK. Identify where the work was actually performed, rather than relying simply on where your business is registered.
Ask who performed each task and where they performed it. If a UK designer prepared the concept and a team in China developed production drawings, request separate descriptions and costs. Keep contracts, deliverables and correspondence that support the split. Avoid treating the whole project as UK work merely because you paid a UK invoice.
Separate preliminary sketches from production design
HMRC distinguishes preliminary sketches that tell the manufacturer what to produce from design work that tells it how to produce the goods. Ask your customs broker to confirm whether research and preliminary design sketches are excluded from the buyer-supplied assist addition, and how necessary production design performed outside the UK should be treated when supplied free or at reduced cost.
Use that distinction to question the project breakdown. Ask whether a deliverable explores a concept or provides instructions needed for manufacture. Request the approved concept, subsequent revisions and production drawings separately. Our guide to writing a product specification helps you describe the factory’s intended output.
Do not classify a whole development bill by its label
A bill headed “development” can bundle research, preliminary sketches and production engineering. Ask for a breakdown by activity, deliverable and work location. Give your customs broker the underlying documents and ask them to explain the treatment of each component. The invoice heading alone is a poor basis for deciding what belongs in the value.
Keep supplier charges separate in that review. Do not assume the treatment of buyer-supplied research lets you deduct research already included in the goods price. Ask the broker to review what the payment buys and how it relates to the goods before making a deduction. Treat separately invoiced supplier development work as another item to review.
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Prepare a file the broker can use
Before shipment, assemble the goods quotation, design contracts, payment records and deliverables. Add a schedule showing each activity, its location, its cost and the products it supports. Mark amounts already included in the goods price so the broker can check for double counting. Where work supports different products, ask for an allocation with supporting workings.
Keep physical tooling separate from design services, even when purchased together. For tooling and sample planning, see MOQ and sampling. Cambridge China Bridge’s staff in China can help request the factory’s breakdown and match its production documents to your specification; agree the customs treatment with your broker.
Frequently asked questions
Are designs made in the UK added to customs value?
Ask your customs broker to confirm whether UK-performed work supplied by the buyer free or at reduced cost falls outside this design assist addition. Review supplier charges separately; do not assume every UK design payment is deductible.
Are production drawings made in China dutiable?
Ask your customs broker to confirm whether they enter the assist addition when supplied by the buyer free or at reduced cost and necessary for producing the imported goods. Check whether their cost is already included in the goods price.
Are research and preliminary sketches excluded?
Ask your customs broker to confirm whether they are excluded from the buyer-supplied assist addition. HMRC distinguishes sketches describing what to produce from design explaining how to produce it. Do not automatically deduct supplier research from the goods price.
What if my development invoice mixes different work?
Request a breakdown by activity, work location and deliverable. Give the broker the contracts, invoices and production documents, and ask for the treatment and allocation to be recorded.