Pilot order customs value: allocating tooling
Include relevant tooling costs in customs value and document how they are allocated to the pilot shipment. Compare pilot-only, supported repeat-order and growth scenarios, but keep speculative volumes separate from the declaration calculation. Cambridge China Bridge can help gather factory records for your broker.
Identify the tooling payment
Under Method 1, payments for tooling supplied by or on behalf of the importer in connection with the imported goods belong in customs value. Paying before production or receiving a separate tooling invoice does not by itself remove the cost.
Collect the tooling quotation, invoice, payment record and the factory’s explanation of which products use it. Ask whether any tooling recovery is already included in the goods price. For trial production and sample approval, use our MOQ and sampling guide.
Choose a supported allocation
HMRC permits apportionment across goods produced or to be produced using the equipment, with an allowance for goods not imported into the UK. Its tooling guidance also permits full declaration on the first importation where the goods attract a positive rate of duty calculated on their value.
Ask the broker to confirm the applicable route and supporting records before shipment. For a proposed equal allocation across identical units, divide the relevant tooling value by the supported production quantity, then multiply by the pilot shipment quantity. Explain why equal allocation fits the goods. See our tooling allocation guide for the wider shipment programme.
Compare purchase-volume scenarios
Prepare separate costing cases before choosing the declaration basis. Label each quantity as ordered, supported by a production commitment or merely forecast. Do not present a sales target or the mould’s theoretical capacity as evidence of planned purchases.
A larger denominator reduces the tooling amount allocated to each unit. That arithmetic does not establish that the denominator is appropriate for customs valuation. Send the evidence behind the proposed quantity to the broker, alongside the alternative cases.
| Scenario | Supporting material | How to use it |
|---|---|---|
| Pilot only | Pilot order and tooling records | Assess the cost exposure if production stops; ask about full first-import declaration and its conditions |
| Pilot plus supported repeats | Agreed orders, production commitments and destination records | Propose an allocation with a documented quantity and UK share |
| Growth forecast | Sales assumptions and prospective orders | Stress-test commercial costs; seek confirmation before using forecast volumes in a declaration |
Give the broker written instructions
Send a valuation worksheet identifying the goods invoice, tooling payment, affected products, proposed allocation quantity, shipment quantity and amount already included in the goods price. Attach the supporting records and ask the broker to confirm the tooling addition and the complete customs value. Use our customs clearance document guide for the wider document pack.
Suggested instruction: “Please review the attached tooling allocation for this pilot import. Repeat purchases remain uncertain. Confirm the proposed basis and any further evidence needed before filing. Please identify any tooling amount already included in the goods price and show the separate addition in your calculation.”
Plan for stopped or changed production
Keep a tooling ledger linking the allocation worksheet to each shipment and recording amounts included in goods prices or added separately. If repeats are cancelled, production changes or the destination mix changes, ask the broker to review the earlier basis and advise whether any declaration action is needed. Do not assume that a change automatically creates a refund or an extra charge.
If an amount to add or exclude is not established at entry, HMRC says you can request a valuation simplification procedure. Ask the broker whether this fits the uncertainty. An unresolved amount is a reason to seek a supported procedure before filing.
Frequently asked questions
Does a separate tooling invoice keep it out of customs value?
No. Relevant tooling payments still belong in customs value. Give the broker both invoices and identify any tooling amount already included in the goods price.
Can I spread tooling over hoped-for repeat orders?
Keep hoped-for volumes in a separate costing scenario. Give the broker the evidence behind any proposed future-production quantity and seek confirmation before using it.
Can I declare all tooling on the pilot import?
HMRC permits full declaration on the first importation where the goods attract a positive rate of duty calculated on their value. Ask the broker to check that condition.
What if I never place a repeat order?
Ask the broker to review the allocation against the cancelled production plan. Keep the original evidence and shipment ledger; do not assume a refund or an extra charge.