The taxpayer exported gold to Dubai to be made into jewelry and then imported it back. The FTT noted that Customs Duty and import VAT can be paid only on the cost of work carried out outside the UK, subject to certain conditions. The taxpayer’s application for outward processing relief was initially rejected by HMRC, but an authorization was eventually granted in 2019. HMRC assessed the taxpayer for Customs Duty and import VAT for a period between September 2017 and July 2018, which the taxpayer appealed. The FTT considered the taxpayer’s arguments based on legitimate expectation but ultimately ruled against them. The only point to determine for import VAT was whether the same gold was intended to be reimported after being converted into jewelry.
Source KPMG
