When to Exclude Interest Expenses

Interest charges may be excluded from the customs value if you are importing goods and they are being paid for under a finance arrangement, provided the following provisions apply:

  • the charges are shown separately from the price actually paid or payable for the goods on the documents accompanying the release for free circulation, for example on an invoice or a valuation statement
  • the funding agreement is in writing

These provisions apply to methods 1 to 6.

Proof required to exclude interest charges

You must be able to show HMRC that:

  • the goods have been sold at the declared price, in this case the price paid or payable (net of interest)
  • the interest rate you have claimed is the same as the rate used under the financing agreement in the country concerned

We may also request additional evidence from you to support any claim to exclude interest charges from customs value, for example:

  • a copy of the financing agreement
  • a copy of the property sales contract if it contains the financing clause
  • information demonstrating that the interest rate claimed is not excessive

Requests to amend a customs declaration to exclude non-taxable items after entry has been accepted and the goods released for free circulation will be considered on a case-by-case basis.

Posted on November 3, 2022