Key Takeaways
- Five customs special procedures let you suspend, reduce, or eliminate duty on imports — but HMRC is tightening the rules in 2026.
- The Tax Update 2026 package, published on 23 June, includes a call for evidence on tariff inversion within inward processing.
- Digital carnets are now legally equivalent to paper carnets for customs declarations, effective 30 June 2026.
- CDS validation is stricter: commodity code descriptions, supplementary declaration deadlines, and data alignment with safety and security filings are all under closer scrutiny.
- The Authorised Use eligible goods list was updated twice in 2026 (versions 1.23 and 1.24), adding frozen bovine products under tariff quota.
What Are Customs Special Procedures?
Customs special procedures let you import goods into the UK without paying the full duty upfront — or in some cases, without paying it at all. They are not loopholes. They are formal HMRC authorisations with specific conditions, record-keeping requirements, and discharge obligations.
There are five special procedures under UK law:
| Procedure | What it does | Typical user |
|---|---|---|
| Inward Processing (IP) | Suspend duty and import VAT on goods imported for processing or repair, then re-exported | Manufacturers, textile processors, food producers |
| Outward Processing (OP) | Export UK goods for repair or processing abroad; re-import with duty only on the processing cost | Engineering firms, electronics repair, garment finishing |
| Authorised Use (End-Use) | Pay a reduced or zero rate of duty on goods used for a specific prescribed purpose | Aircraft parts, shipbuilding, renewable energy components |
| Customs Warehousing | Store non-UK goods with duty and VAT suspended until released to free circulation | Importers holding stock, e-commerce, bulk commodity traders |
| Temporary Admission | Import goods temporarily with full or partial relief for specific uses | Exhibitions, professional equipment, samples, racing horses |
Each procedure requires HMRC authorisation before you can use it. Some — like inward processing — may also require you to pass an economic conditions test, where HMRC assesses whether your use of the procedure would harm UK producers of similar goods.
If you are already using one or more of these procedures, 2026 has brought changes you need to act on. If you are not using them yet, the simplification measures make this a good time to review whether they could cut your duty bill.
The 2026 Simplification Package
On 23 June 2026, HMRC published its “Tax Update 2026: Simplification, Modernisation and Fairness” summary. The package brings together a range of tax and customs measures designed to reduce administrative burdens and improve the experience for businesses interacting with HMRC systems.
For customs special procedures users, three changes stand out.
Digital Carnets Gain Legal Equivalence
The Customs (Miscellaneous Amendments) Regulations 2026, effective 30 June 2026, amend the Import Duty Regulations, Export Regulations, and Transit Regulations to ensure that goods declared using digital carnets receive the same treatment as those declared with paper carnets.
This matters for anyone using ATA carnets for temporary admission or transit. Previously, the legislation explicitly referenced paper documents. The 2026 amendment means a digital carnet — submitted through an app or online platform — carries the same legal weight. The London Chamber of Commerce and Industry ran a pilot with HMRC ahead of the change, and the digital option is now available for routine use.
Bulk Customs Declarations Extended
The same regulations extend the simplified bulk customs declaration process to imported postal packets sent to recipients anywhere in the UK. Previously, the facility was geographically limited. For e-commerce importers and postal operators, this removes a friction point — bulk declarations can now cover the whole country without separate arrangements for different regions.
Interest Calculation Rules Updated
Where a customs duty liability arises from non-compliance or where incorrect information in a declaration is only identified after acceptance, the rules for calculating interest have been updated. The start and end dates for interest calculations are now clearly defined in the amended regulations. This is a technical change, but it affects anyone facing a post-clearance demand — the interest clock now runs from a more precisely defined point.
Inward Processing: Tariff Inversion Under Review
Inward processing is the most widely used special procedure, and it is also the one facing the most significant policy scrutiny in 2026.
The Tax Update 2026 summary confirms that the government intends to publish a call for evidence later this year on tariff inversion and its operation within the inward processing regime.
Tariff inversion happens when the duty rate on a finished product is lower than the duty rate on the raw materials used to make it. Under inward processing, you can import raw materials duty-free, process them in the UK, and then release the finished goods to free circulation at the lower finished-goods rate. The difference between the two rates is the inversion — and it can be substantial for certain product categories.
HMRC has long been aware that tariff inversion creates a policy tension. On one hand, inward processing is designed to support UK manufacturing and processing. On the other, the inversion can undercut UK producers of the raw materials. The call for evidence will examine how the rules operate in practice and whether changes are needed.
If you rely on inward processing for goods where tariff inversion applies, watch for the call for evidence. It is not a change yet — but it signals that HMRC is actively reviewing this area. The outcome could affect your duty calculations.
CDS Validation Tightens for IP Users
Separate from the policy review, CDS is applying stricter validation to inward processing declarations in 2026. According to HMRC’s CDS guidance, two new Additional Information (AI) codes now distinguish between goods placed into a special procedure using Authorisation by Declaration (AbD) and goods being removed from a procedure they entered using AbD.
In practice, this means you need to be precise about which AI code applies at each stage. Using the wrong code — or omitting it entirely — can result in a rejected declaration. Several workarounds for AbD have also been removed from the CDS declaration instructions, so processes that worked in 2025 may no longer be accepted.
Authorised Use: New Goods Added in 2026
The Authorised Use (end-use) procedure lets you pay a reduced or zero rate of customs duty on imported goods, provided they are used for a specific purpose approved by HMRC and processed within a specified period.
The list of eligible goods and their reduced rates is maintained in a reference document published by HMRC. In 2026, that document has been updated twice:
- Version 1.23 (3 March 2026): Updated eligible goods and rates across multiple categories.
- Version 1.24 (12 May 2026): Introduced Authorised Use for frozen bovine products subject to a tariff quota.
The addition of frozen bovine products is significant. It shows HMRC is willing to expand the Authorised Use scheme into agricultural commodities where tariff quotas apply — a category that was not previously well-served by the procedure. If you import food products subject to quotas, it is worth checking whether your goods now appear on the eligible list.
The Authorised Use document is available on GOV.UK and is updated through statutory instruments. You should check the current version before relying on a particular rate — the document can change between your application and your shipment.
For more detail on how special procedures fit into the broader customs framework, see our guide to UK customs special procedures.
Outward Processing and Customs Warehousing: Smaller but Real Changes
Outward Processing: Simplified Authorisation for Repairs
Outward processing lets you temporarily export UK goods for repair or processing abroad, then re-import them with duty and VAT payable only on the cost of the repair or processing — not on the full value of the goods.
The HMRC Customs Special Procedures Manual confirms that authorisation by declaration at export is now available for simple repair operations. This was previously referred to as “simplified” authorisation. If you are sending goods abroad for straightforward repair work — recalibration, component replacement, refinishing — you can now use a declaration-based authorisation rather than applying for a full authorisation in advance.
The standard rate of yield method is available for calculating the duty on re-import. This uses a fixed percentage to determine what portion of the re-imported goods is attributable to the processing abroad. For more complex cases, you can agree a bespoke rate of yield with HMRC.
For a deeper dive, read our outward processing relief guide.
Customs Warehousing: Procedure Code Discipline
Customs warehousing allows you to store non-UK goods in an HMRC-approved warehouse with duty and import VAT suspended. The goods can be stored, manipulated, or processed in certain ways before they are either re-exported or released to free circulation.
The 2026 changes to customs warehousing are less about new rules and more about enforcement of existing ones. CDS is now stricter about procedure codes when goods enter and leave a customs warehouse. The discharge of the customs warehousing procedure — particularly where tariff preferences or quotas are claimed — is being checked more thoroughly.
If you operate a customs warehouse or use one, review your procedure codes. A mismatch between the entry and removal codes can delay release and trigger compliance queries. Our customs warehousing procedures guide covers the codes in detail.
CDS Validation: What It Means for Special Procedures Users
The Customs Declaration Service is now the only platform for UK customs declarations. CHIEF was fully withdrawn — imports in September 2022, exports in March 2024 — and all declarations now go through CDS.
In 2026, the change is not the platform itself but how strictly it enforces the rules. According to customs agents and freight operators, HMRC is tightening validation across several areas that directly affect special procedures users.
Commodity Code Scrutiny
Commodity codes are being cross-checked more thoroughly against goods descriptions. Vague descriptions like “parts” or “components” are being challenged. If your inward processing declaration lists “metal components” but the commodity code relates to a specific automotive part, expect a query. The system is aligning descriptions and codes more tightly than before.
Supplementary Declaration Deadlines
Businesses using simplified declaration procedures — including Entry in the Declarant’s Records (EIDR) — face tighter deadlines for supplementary declarations. Late or inconsistent follow-up submissions are being flagged more quickly. For high-volume operators, this means supplementary declarations must be accurate and on time, every time.
Data Alignment with Safety and Security Filings
CDS entries are now cross-referenced more closely with Safety and Security (S&S) declarations. Discrepancies in weights, values, or consignor details can trigger queries. The fix is straightforward: make sure the data on your commercial invoice, your S&S declaration, and your CDS entry all match.
New AI Codes for Special Procedures
As noted above, CDS now requires specific Additional Information codes to distinguish between entry into and removal from special procedures when Authorisation by Declaration is used. If you use AbD for inward processing, outward processing, or temporary admission, check that your software or agent is using the correct codes.
If you are unsure about declaration requirements, our CDS guide walks through the current rules.
What Importers Should Do Now
The 2026 changes are not a single big-bang reform. They are a series of smaller adjustments that, taken together, change how you should manage your special procedures. Here is a practical checklist.
Review your authorisations. If you hold an inward processing, outward processing, or authorised use authorisation, check the expiry date and any conditions. HMRC can vary conditions after approval — do not assume your authorisation from 2024 still reflects current requirements.
Check the Authorised Use eligible goods list. If you use or are considering end-use relief, download version 1.24 (12 May 2026) from GOV.UK. Confirm your goods are still listed and the rate has not changed.
Audit your CDS procedure codes. If you use AbD for any special procedure, confirm you are using the correct AI codes for entry and removal. If your software provider handles this, ask them to confirm.
Tighten your supplementary declaration process. If you use simplified declarations or EIDR, build in a buffer before the deadline. Late submissions are being flagged faster in 2026.
Align your data across systems. Your commercial invoice, S&S declaration, and CDS entry should tell the same story. Discrepancies in weights, values, or consignor details are a fast track to a query.
Watch for the tariff inversion call for evidence. If inward processing is material to your duty strategy, the forthcoming call for evidence could signal future changes. Responding to it — or at least reading it — puts you ahead of any policy shift.
Consider whether you are missing relief opportunities. If you import goods for processing and re-export, or for a specific end-use, and you are not using a special procedure, you may be overpaying duty. A review with a customs agent or in-house specialist could identify savings.
Frequently Asked Questions
What are the five UK customs special procedures? The five procedures are Inward Processing, Outward Processing, Authorised Use (End-Use), Customs Warehousing, and Temporary Admission. Each allows you to suspend, reduce, or eliminate customs duty under specific conditions, and each requires HMRC authorisation.
What changed in the 2026 Tax Update for special procedures? The 23 June 2026 package confirmed digital carnets are now legally equivalent to paper carnets, extended bulk customs declarations to postal packets UK-wide, updated interest calculation rules for post-clearance demands, and announced a forthcoming call for evidence on tariff inversion within inward processing.
Do I need to reapply for my special procedures authorisation in 2026? Not automatically. Existing authorisations remain valid until their expiry date. However, HMRC can vary conditions, and the Authorised Use eligible goods list has been updated twice in 2026. Review your authorisation terms and check the current eligible goods list if you use end-use relief.
What is tariff inversion and why is HMRC reviewing it? Tariff inversion occurs when the duty rate on a finished product is lower than on its raw materials. Inward processing lets you import raw materials duty-free and pay the lower finished-goods rate on release. HMRC is reviewing whether this creates unfair competition for UK raw material producers. A call for evidence is expected later in 2026.
How do the new CDS AI codes affect my special procedures declarations? If you use Authorisation by Declaration (AbD) to enter or remove goods from a special procedure, you must now use specific Additional Information codes that distinguish between entry and removal. Using the wrong code or omitting it can result in a rejected declaration.