UK outward processing: repair & process goods abroad duty-free
HMRC guidance on outward processing allows UK exporters to send goods abroad for processing or repair and re-import them with duty suspension or exemption under specific conditions. This is a customs procedure that can reduce landed costs when goods undergo value-added work outside the UK, provided proper documentation and customs declarations are filed.
Photo: Swastik Arora / PexelsWhat is outward processing?
The UK's outward processing procedure, administered by HMRC, permits exporters to temporarily export goods for processing, repair, or other work abroad and then re-import them with preferential duty treatment. Published 8 May 2026, this guidance clarifies the rules and conditions shippers must follow.
Who can use outward processing?
UK exporters, manufacturers, and businesses that need goods worked on outside the UK can apply. Common scenarios include:
- Sending semi-finished goods to a subcontractor overseas for assembly or component addition
- Exporting goods for repair or refurbishment
- Outsourcing finishing work (dyeing, cutting, embroidery) to lower-cost jurisdictions
The procedure applies across all sectors and HS chapters, though specific rules may govern sensitive goods or materials.
How does it work?
Under outward processing, goods exported for work abroad are typically eligible for:
- Duty suspension on re-import, meaning you pay duty only on the value added (labour, materials) rather than the full re-imported value, or
- Duty exemption in some cases, depending on the type of work and origin rules
To qualify, you must:
- Obtain prior authorisation from HMRC before exporting
- File an outward processing declaration with full details of goods, HS codes, value, destination, and processor details
- Maintain records of all work performed, costs incurred, and the goods on return
- Ensure the goods are re-imported and cleared through customs with proof of the outward processing scheme
Documentation and compliance
HMRC requires comprehensive records:
- Export and import customs declarations
- Contracts with the overseas processor
- Invoices and proof of work completed
- Weight/quantity reconciliation on return
False declarations or failure to re-import goods covered by an outward processing authorisation can result in penalties and loss of the scheme's benefits.
What this means for shippers
If you send goods abroad for processing or repair, register for outward processing before export to lock in duty savings on re-import. Failure to obtain authorisation upfront forfeits these savings and exposes you to full duty on re-import value. File all declarations accurately and retain processor records for audit. Use the landed-cost tool to compare duty liability under standard vs. outward-processing scenarios and plan your supply chain accordingly.
