UK customs value for free replacement goods
Declare a supported customs value, even when the supplier charges nothing. Establish whether replacements belong to the original sale, document the valuation basis, and check duty and VAT treatment separately. A zero-price invoice does not settle those questions. Cambridge China Bridge can help obtain supporting factory records.
Separate the amount payable from the customs value
HMRC requires a customs value to be declared even where no duty or VAT is payable. An invoice showing no charge records the supplier's billing arrangement; it does not establish the declaration value or entitlement to relief.
Ask the factory to distinguish the amount payable from the value supplied for customs purposes. Identify the goods, quantity, reason for supply and related order. For valuation additions rather than free-goods treatment, see what goes into customs value.
Establish how the replacements relate to the sale
Where an order includes free spare items to cover likely defects or transit damage, HMRC treats the contracted sale price as covering the total quantity shipped. Show the extra items on the packing list and explain their purpose.
For a later free replacement shipment clearly fulfilling the original transaction, HMRC says to base the customs value on that transaction's unit price. Consider any adjustment to the original import separately. Give your agent the original invoice, contract and supplier's replacement confirmation. For offers on the original purchase, see our discounts and cashback valuation guide.
Support the valuation of other no-charge goods
For genuinely free goods without a sale, the transaction value method normally cannot be used. Ask your agent to assess the valuation methods in order, rather than inserting a nominal value. Keep a written explanation of the method chosen.
For the fallback method, HMRC requires evidence explaining why earlier methods cannot be used and supporting the value. Ask for the supplier's current export price list or a signed value statement. Match the evidence to the actual model, specification and condition; an unrelated catalogue price is a poor starting point.
Check relief and VAT independently
If faulty goods will be exported for replacement under a guarantee, discuss outward processing with your agent before sending them away. Duty relief depends on the procedure and supporting evidence, including guarantee terms and the original valuation. Under this arrangement, replacement goods remain subject to VAT on their full VAT replacement value. For shipment sequencing, see receiving replacements before returning faulty goods.
Ask your agent to confirm the treatment and explain the selected customs procedure codes. Keep recovery of charges on the faulty consignment separate from clearance of the replacements; our faulty-goods and claims guide covers the original consignment.
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Send a clearance pack before dispatch
Send your agent the no-charge invoice, packing list, original purchase and import records, defect correspondence, replacement agreement and valuation evidence. Add freight and insurance documents and any export records. Ask for written confirmation of the proposed value, method, procedure and duty and VAT treatment before dispatch.
Keep the calculation and accepted declaration together so a later reviewer can follow the reasoning. Cambridge China Bridge's staff in China can help obtain factory documents and reconcile the replacement quantities with the supplier's agreement.
Frequently asked questions
Can I declare free replacements at zero value?
A no-charge invoice is not enough. Establish the supported customs value and the applicable procedure with your customs agent.
What value do I use for a later replacement shipment?
Where the contract clearly shows it fulfils the original transaction, HMRC says to use that transaction's unit price as the basis. Review the original import separately.
What evidence should I ask the factory for?
Request the replacement agreement, original invoice, product details and quantities. For other no-charge goods, obtain a current export price list or value statement and ask your agent whether it supports the chosen method.
Are warranty replacements free of import VAT?
Under outward processing, replacements are charged VAT on their full VAT replacement value. Do not treat a free replacement or duty relief as proof that VAT is also relieved.