Bonded Warehouses

The Customs People has a great deal of knowledge and expertise when it comes to all aspects of using bonded warehouses to store goods. We can offer advice and consultation to your business relating to the reassessment of open-ended customs authorisations.

Contact The Customs People today by calling 0161 826 8926 or fill out an online enquiry form and we will be in touch.

What is a bonded warehouse?

A bonded warehouse is a secure space in which goods liable to import duty and VAT are stored. Customs duty and VAT payments on these items are deferred until the goods are sold or removed from the bonded warehouse.

Storing items this way has a number of benefits for sellers who import or sell goods that are liable to these charges. For this reason, suppliers of wine, food, tobacco and spirits are common users of bonded warehouses.

Those businesses supplying goods in, or removing them from a tax warehouse in another EU member state, should be aware that the rules and procedures may be different to those that apply in the UK.

It is therefore, advisable to consult the authorities in that member state if there are any doubts about legislation.

Why are bonded warehouses used?

There are a number of reasons why a bonded warehouse may be a desirable option for importers and exporters of certain products. These include:

● Deferred payments on such products means that no tax is paid until the goods are sold, which can considerably improve cash flow for businesses. In many cases, this can be between 25% and 33% of the upfront cost of imported goods.

● If the goods are set to be exported, no duty will be payable in the UK, but paid in the country of destination. This means double duty payments will be avoided, leading to further savings.

● Goods can be imported and stored in bonded warehouses in advance of peak season, meaning they are available for order fulfilment without delays.

● Very often, bonded warehouses have specialised facilities, such as deep freezes of large vats to store wine or spirits.

● Inward and outward customs documentation is often provided by the bonded warehouse facility.

Trading in a tax warehouse


Registration for VAT
Should your only business activity be the supply of goods within a tax warehousing regime, you have no need to register for VAT, but you may do so voluntarily under the VAT Act 1994. Your liability to register for other business activities is not affected by the value of supplies of goods or services made in a tax warehouse.

VAT implications of placing goods in a tax warehouse
VAT does not have to be paid when excisable goods subject to a warehousing regime are placed in a bonded warehouse for those goods. VAT may be due when goods are removed from the warehouse to home use, and is payable together with any suspended duty by the person who is removing the goods (or by the person liable to pay the duty).

VAT due on removals from tax warehouses
VAT is due on the last supply of goods in warehouse and must be accounted for an paid (or deferred) when the goods are removed from the warehousing regime to home use. The VAT due usually depends on the origin of the goods and whether any subsequent supplies take place while in the tax warehouse in the UK.

Contact us

Contact The Customs People today by calling 0161 826 8926 or fill out our online enquiry form and we will be in touch.

Success Stories

  • "Company 'O' was able to increase the value of sales made to its customer within the contract price after taking advantage of End-Use relief. This meant the initial $3.5million import in a 25 year contract was VAT and duty free."

    Canadian Company 'O' -
  • "Cotton importer 'G' was at risk of losing money through the use of a wrong commodity code - this meant instead of 0% duty, 8% was applied, landing them with a bill of £80,000. Our investigations led to the assessment being waived, and the bill being cancelled."

    Cotton Importer -
  • "Company 'R' took advantage of our planning advice and structured purchases to ensure they were making the most of their options. Advice given included audit trail help, and anti-dumping duty guidance. "

    UK Company 'R' -
Read All Success Stories

Who We Help

Our clients are both importers and exporters in a wide range of areas, including textiles, heavy manufacturing and food, and we help them all to approach the customs process in the best way for their business.

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