Duty reliefs can prove very rewarding in cash terms, but if implemented incorrectly the savings can be reduced by increased administration. Tasks include identification of the various reliefs depending on the circumstances, and then introduction of the operation in the most cost-effective way.

Inward processing relief
Duty and VAT can be relieved in the EU by claiming inward processing relief. This can be done in one of three ways:

• Suspension: estimate how many of the imported goods will be going for export, and apportion each import between export and EC sales. Do not pay duty or VAT on the export proportion.
   
• Prior export: count up finished goods shipped for export, and for each finished item exported, import duty free on the next consignment. Effectively take an export credit, and use that credit to import duty free.
   
• Drawback: pay duty at import and then put in a monthly or quarterly refund claim for all exports.

Outward processing relief
Many companies send goods abroad for manufacture or assembly and return to stock. Such goods may be returned partially manufactured or in the finished state. Outward Processing Relief ("OPR") allows re-importation after process with reduced payment of duty. The relief is used particularly within the textiles and electronics industries, although there is no restriction on other trades utilising the relief. It is of particular value where companies are able to take advantage of lower labour rates elsewhere in the world.

Like inward processing relief, OPR may be used across different Member States of the European Community. Goods may be exported from one Member State to a non-Community country and then re-imported to a different Member State. This is known as triangular OPR.

Similar provisions apply for goods exported for repair but are replaced by the overseas company rather than repaired. This is known as "standard exchange". In these cases it is generally possible to obtain total relief from customs duty, subject to the general condition that the goods are replaced free of charge under warranty.

Customs warehousing
Many companies hold stocks of imported inventory in the UK, for onward distribution in the UK or to other countries. 

If imported goods are not required immediately, the customs duty and VAT can be postponed through the use of customs warehousing. If they are to be stored before further manufacture, or before resale, then placing the goods in a customs warehouse delays the payment of the charges until the goods are removed for manufacture or resale. If they are re-exported, use of the warehouse can relieve the charges entirely, producing real cash savings. Judicious use of customs warehousing can reduce the cost of such inventory by over 20%.

A Customs warehouse does not necessarily mean a locked building with bars on the windows. These days, the goods are controlled through accounting systems and records, rather than through physical location. This enables you to keep goods in more than one premises, and will not require you to account to Customs for movements between different company locations.

Simplified procedures
Simplified procedures enable authorised businesses to declare goods electronically direct to Customs. Electronic declarations can be made at the time of import or can be reported at regular intervals. This can significantly reduce the costs of using clearance agents.

Temporary imports
When goods move around the world they encounter Customs charges on arrival, whether the movement be permanent or temporary. In most cases no distinction is made as to the use to which the goods will be put. When goods are imported for a short time, Duty need not be paid. If the importer wishes to obtain relief from those charges, he must apply for relief at or before the time of import.