Does supplier profit sharing increase customs value?
Yes. Under HMRC’s Method 1 guidance, the seller’s direct or indirect share of profit from resale, use or disposal of imported goods must be added to the price paid. Prepare evidence of the amount and address any uncertainty before clearance. Cambridge China Bridge can help gather supplier documents.
Identify the seller’s share
HMRC requires the seller’s share of resale, use or disposal profits to be added to the price paid. This guide covers that adjustment; use our customs value guide for the wider calculation.
Before agreeing a profit share, write down which goods it covers, what counts as profit, which costs are deducted and when settlement happens. Ask whether the supplier’s quotation already includes any of the same payment, so your workings can identify possible duplication.
Trace indirect payments
The rule covers proceeds reaching the seller indirectly as well as directly. Paying through an intermediary does not remove the need to examine whether the seller receives a share.
Ask the supplier to identify the recipient and explain the payment route. If a payment goes to another business, request documents showing what it is for and how it benefits the seller. Give your customs agent the full arrangement, including side agreements and settlement correspondence.
Build evidence for the additional amount
HMRC’s invoice evidence test requires an authentic document with enough information to show the total amount paid or payable. For a separate profit settlement, assemble the goods invoice alongside the agreement, calculation and supplier’s payment request.
Create a reconciliation linking the imported goods to resale records, returns, agreed cost deductions and the seller’s resulting share. Explain how pooled sales are allocated between shipments. Keep payment evidence when settlement occurs, and distinguish an unpaid amount due from an amount already paid.
Resolve unknown amounts before clearance
If the profit amount is unknown at importation, HMRC says you must request release against a deposit or guarantee. If an appropriate addition cannot be made, Method 1 cannot be used and you must try Method 2.
Flag the arrangement to your agent before shipment and ask what evidence and release arrangements are needed. Agree who will supply the final calculation and track it through settlement. For choosing and authorising an agent, see appointing a customs agent. Cambridge China Bridge’s staff in China can help collect the supplier’s explanation and documents.
Frequently asked questions
Do I add my entire UK resale profit?
The addition is the seller’s share of the profit from the imported goods. Document the agreed calculation and identify the amount attributable to those goods.
Does paying through another company avoid the addition?
No, if the proceeds reach the seller indirectly. Trace the recipient, payment purpose and benefit to the seller, then give the arrangement to your customs agent.
What if I do not know the profit when importing?
HMRC says to request release against a deposit or guarantee when the profit amount is unknown at importation. Discuss the arrangements with your customs agent before clearance.
What records should support a supplier profit share?
Assemble the agreement, goods invoice, resale records, agreed deductions, shipment allocation, supplier settlement request and payment evidence. Make the calculation reproducible.