Returned Goods Relief after repair or replacement — how it works in practice
Author: EasyClearance Team · Published: 19 April 2026 · Reading time: 10 minutes
You sent electronics or a machine abroad for service and now the goods are coming back to the UK after repair — can you still use Returned Goods Relief and avoid full duty and VAT? Yes, but only if the work falls within the repair category rather than substantial improvement. A difference of a few percent in added value decides whether you pay duty on the repair value or on the full value of the device. This guide is an operational map of RGR for repair, warranty replacement and RMA scenarios — with the list of documents HMRC expects to see and the pitfalls that routinely cost importers thousands of pounds in unnecessary duty.
Returned Goods Relief (RGR) is a customs exemption for goods returning to the UK after an earlier export. The wider context of the relief (general conditions, the 3-year window, proof of export) is covered in our base RGR guide. This article focuses on a single — but commercially most frequent — scenario: goods returning after repair or warranty replacement.
HMRC permits RGR in three operational repair variants:
Repair without replacing parts — labour, calibration, cleaning. Full RGR, duty/VAT only on the service value.
Repair with replacement of minor parts — consumables and repair parts of limited value. RGR applies, duty/VAT on labour plus parts.
Warranty replacement of the whole device — the servicer swaps a faulty unit for an identical one. RGR applies if the warranty documentation is complete.
The boundary ending the relief is substantial improvement — a modification that changes the nature, performance or tariff classification. HMRC then treats the goods as a new product and requires a full import with duty and VAT on the value of the whole upgraded device, not just on the difference.
Repair vs substantial improvement — where the line sits
HMRC does not publish a fixed percentage threshold, but in audit practice the rule of thumb is: if the value of replaced parts exceeds around 25% of the value of the goods, or the work changes the tariff classification, we are looking at substantial improvement. Below that threshold — repair. The table shows typical outcomes:
Scenario
Nature of work
RGR?
Tax base
Calibration of an industrial meter
Repair
Yes
Service value (e.g. GBP 200)
Replacing a worn laptop battery
Repair (consumable)
Yes
Labour + battery
Replacing a motherboard (10% of value)
Repair
Yes
Labour + part
Replacing motherboard + CPU (40% of value)
Borderline → often substantial
Risk of refusal
Depends on HMRC interpretation
Upgrading the processor to a more powerful model
Substantial improvement
No
Full post-modification value
Replacing a 1.6 engine with a 2.0 in a machine
Substantial improvement
No
Full post-modification value
Warranty replacement of an identical model
Warranty exchange
Yes
Zero (identical value)
Warranty exchange for a newer version
Substantial improvement
No
Full value
Practical rule: if after the work the device works as it was originally meant to work, that is repair. If it works better, faster, with new features, that is substantial improvement. The test question: ‘has the tariff classification changed?' If yes — RGR does not apply.
Warranty replacement — exchanging the whole device
The most common question from EasyClearance clients in electronics and machinery: ‘My German service did not repair the device — they swapped it for a new unit. Does RGR still apply?' Answer: yes, under three conditions.
The goods were originally exported from the UK — there must be proof of export of the faulty unit from the UK (export declaration, B/L, AWB, CN22/23 for postal items).
The replacement device is identical in model and value — the same manufacturer part number, or an unambiguously equivalent substitute. If the servicer supplies a newer model (upgrade), RGR falls away.
Warranty documentation — the RMA claim, servicer confirmation of warranty replacement, serial numbers of the faulty unit and the replacement.
If the swap takes place under an extended warranty or an ‘advance replacement' programme (the replacement is dispatched before the faulty unit returns to the servicer), this must be set out clearly in the clearance paperwork so that HMRC does not treat the replacement as a new import with full duty.
Spare parts and RMA — when RGR, when a new import
Spare-parts scenarios are the most confusing. The operational distinction:
The whole device comes back after repair → RGR applies, even if parts inside have been replaced. The value of parts feeds into the ‘work' value.
A faulty part was exported from the UK and comes back after repair → RGR applies to that part as a separate item (e.g. a PLC module shipped to a servicer and returned after repair).
A faulty part was exported, a new replacement comes back in return → hybrid route. Export of the faulty part = independent operation. Import of the replacement = separate clearance. RGR applies to the replacement only if it meets the warranty replacement criteria (identicality, original export of the parent device).
A spare part bought separately from abroad → that is a new import; RGR does not apply (no prior export of that specific item from the UK).
RMA pitfall: many electronics importers treat every shipment from the manufacturer's service centre as ‘RGR' because ‘the part is coming back under warranty'. That is wrong. RGR requires the original export of precisely the same goods, or an exchange that is fully identical. A new part from the manufacturer's catalogue, shipped under warranty on a parent device, is a new import with duty and VAT.
Evidence pack for HMRC
The difference between acceptance and refusal of RGR at a post-clearance audit is usually down to the quality of the documentation. Our minimum for repair/warranty scenarios:
Proof of original export from the UK — the MRN of the export declaration (preferred), alternatively B/L, AWB, CMR with the date and serial number of the device. Without this, RGR does not apply, because there is nothing to ‘return'.
Service report — description of the work performed, list of replaced parts with part numbers, the device serial number, dates of receipt and release from the servicer.
Invoice for the repair service — value of labour, value of parts, total net. For a warranty repair, a ‘zero value' invoice annotated warranty repair, no charge.
‘No substantial change' statement — a short note from the servicer (one paragraph) confirming that the repair does not constitute substantial improvement for RGR purposes. This document dramatically reduces the risk of dispute at audit.
RMA correspondence — the warranty claim, ticket number, manufacturer's acceptance of the claim.
Before/after photos (optional, but helpful) — documentation of the state of the device before shipment and on return, especially for expensive machinery.
EasyClearance Team lifehack: for clients in machinery and electronics we prepare an English-language template of the ‘no substantial change' statement, aligned with the HMRC style. The foreign servicer signs it alongside the invoice. At an HMRC audit this single document decides the outcome in 90% of cases.
CDS procedure step by step
The import clearance under RGR repair is processed through CDS (Customs Declaration Service). Key declaration elements:
Customs procedure code — typically 6123 (RGR after an earlier temporary export) or 6110 (RGR after a permanent export). The choice depends on the nature of the original export.
Export document reference — the MRN of the export declaration entered in box 44 as proof of the original export.
Customs value — for repair: value of the repair service plus replaced parts. For warranty replacement with an identical model: typically zero (with justification in the remarks field).
Additional information code — indicating the nature of the operation (repair/warranty). The customs agent selects the appropriate AI codes.
Attachments — service invoice, service report, no-substantial-change statement. HMRC may request sight at any point in the process or at a post-clearance audit.
How customs value is calculated under RGR repair
This is where RGR delivers real financial benefit: instead of duty and VAT on the full value of the device (e.g. a CNC machine worth GBP 40,000), you pay only on the value of the repair (e.g. GBP 1,500 labour + GBP 800 parts = GBP 2,300).
A numerical example for electronics:
Value of the exported device: GBP 8,000
Value of the repair (labour + parts): GBP 1,200
Duty rate: 0% (typical for IT electronics), VAT: 20%
Without RGR: VAT on GBP 8,000 = GBP 1,600
With RGR repair: VAT on GBP 1,200 = GBP 240
Saving: GBP 1,360 on a single clearance
For industrial machinery (duty rates of 1.7–4.5%) the saving scales proportionally and typically falls in the GBP 2,000–8,000 range per service operation. The procedure requires complete documentation and care — but the return on the administrative effort is a multiple.
Common mistakes that cost duty
No proof of the original export — the client has not kept the MRN or the B/L, and the servicer says ‘we sent it by courier but we have no documents'. Without that, RGR does not apply.
Treating an upgrade as a repair — swapping the CPU for a more powerful one, installing a new firmware generation with new features. HMRC classifies this as substantial improvement.
Warranty replacement with a higher-spec model — the manufacturer exchanges the faulty unit for a flagship model from a newer series ‘free of charge'. The client thinks it is still warranty, HMRC sees substantial improvement.
No ‘no substantial change' statement — the servicer supplies only an invoice and a technical report. HMRC is entitled to challenge the nature of the work where there is no clear statement.
Using RGR for a catalogue spare part — the client tries to clear a new warranty part (which was never in the UK) as RGR. Refusal is guaranteed.
Missing the 3-year window — the repair dragged on for 2.5 years and the device left the UK earlier. Without an extension application, RGR lapses automatically.
Foreign service work and regular returns?
EasyClearance runs RGR for electronics, machinery and e-commerce clients with repairs and replacements — from eligibility checks through preparation of the evidence pack to CDS clearance. Per-declaration billing.
Does RGR repair also work for clearances from the EU?
Yes. RGR is a UK relief, independent of the direction of export. Goods exported from the UK to Germany for service and returning after repair benefit from RGR the same way they would coming back from the USA. The only difference is documentary logistics — on EU movements, evidence can be less formal, so it is all the more worth assembling the full set.
What if the servicer replaces a part at no additional charge under warranty?
A GBP 0 invoice is accepted by HMRC, provided the nature of the work is documented as warranty repair. In that scenario, duty and VAT are zero — an effectively cost-free clearance, as long as the warranty documentation is complete.
Can I use RGR for goods repaired by a third-party servicer rather than the original manufacturer?
Yes. RGR does not require the repair to be performed by the manufacturer. An independent servicer also qualifies, provided they issue the appropriate documents (report, invoice, no-substantial-change statement). This is particularly relevant for older machinery that is no longer supported under manufacturer warranty.
How long must I keep the documentation after clearance with RGR?
Under HMRC rules — 4 years from the date of clearance. During that period HMRC may carry out a post-clearance audit and ask to see the proof of export, the repair report and the no-substantial-change statement. No documentation at audit = retrospective duty and VAT charges plus interest.
Can RGR repair be combined with a C285 duty refund?
Yes — if you paid full duty/VAT at import (for instance because the documentation was not available at clearance) and later gathered the RGR evidence, you can apply for a refund via the HMRC refund routes. The deadline is 3 years from payment. It is worth putting the documentation in place in advance to avoid paying twice (duty once, then time spent recovering it).
Does a warranty replacement have to return along the same route as the faulty goods left?
No. HMRC looks at the fact of return, not at the logistics route. You can send the faulty device by air to the USA and receive the replacement by sea from Germany — if the documentation links the two operations (RMA claim, serial number, warranty confirmation), RGR applies.
Summary — RGR repair checklist in 60 seconds
Proof of original export from the UK (MRN / B/L / AWB) — have it?
Goods returning within 3 years of export — yes?
Service work = repair, not substantial improvement — confirmed by statement?
Repair value documented by invoice — collected?
Serial number matches (for warranty replacement: identical model) — confirmed?
CDS declaration with CPC 6123/6110 and the export MRN reference — ready?
Full set = RGR repair applies. One missing item — HMRC refuses relief and charges duty/VAT on the full value of the goods.
RGR is a relief where a documentary detail decides the financial outcome. In sectors with heavy servicing (electronics, machinery, medical devices, aerospace) annual savings run into tens of thousands of pounds. The return on investment in proper procedures is immediate — from the first significant clearance. If you are only just building an RGR process in your business, it is worth starting with an audit of the last few service clearances — often it turns out that duty was paid needlessly and the refund route is still open.
Wider context is available in our UK customs reliefs hub, and the route to refund overpaid duty after an incorrect clearance is set out in the C83 guide.