Goods outside the charge

UK-origin goods and returned goods

Section 147(2)(a) provides that CBAM is not charged if the place of origin of the good is the United Kingdom under the non-preferential rules of origin, and section 147(2)(b) provides the same for a good for which returned goods relief is available. The two are different tests: a good of UK origin is exempt whether or not it was ever exported, and a returned good is exempt whether or not it is of UK origin. Section 147(2)(b) asks whether the relief is available, not whether it was claimed, and the safe course is to claim it on the declaration, because the customs claim is the evidence. Paragraph 2(3)(a) of Schedule 17 leaves these goods out of the registration test, and they are not a line on the return, but regulation 5 of SI 2026/802 still requires a record with a note that section 147(2) applies.

UK-origin precursors

Section 147(3) is partial and reaches inside a good: CBAM is not charged on so much of the emissions embodied in the imported good as are attributable to another CBAM good that originated in the United Kingdom and was processed to produce it. Slab cast in the United Kingdom, exported and rolled abroad into coil comes back as coil of foreign origin, but the emissions of the slab are taken out and the importer pays on the rolling alone. The return states whether the good was produced using such a precursor, and the evidence is the origin documentation for the precursor and the records that tie it to the good. As at 13 September 2026 no published notice stated how the exempt share is calculated on either route.

Goods sent abroad for processing

Where the galvanising, coating or fabrication abroad does not change the origin of the goods under the non-preferential rules, they return as goods of UK origin and are exempt entirely. Where the processing confers foreign origin on the finished product, the product is charged and section 147(3) removes the emissions of the UK inputs. Which applies is a question of customs origin law, and the origin ruling or the reasoning behind the declared origin is the record to hold.

Temporary admission

Section 147(4) provides that where full relief was given on a declaration for temporary admission, the good is treated as not having been imported at all, so long as the business was entitled to make the declaration and the relief was available. It enters neither the registration test nor the return, and the tax attaches only if the goods are later released to free circulation. Goods under temporary admission with partial relief are imported on the acceptance of the declaration.

Special customs procedures

Section 145 defers rather than exempts: where a CBAM good is processed under a special procedure into a good that is not a CBAM good, and that good is then imported, CBAM is charged on the emissions that were embodied in the input. Inputs made into a product that is exported never incur the charge; a product released to the UK market incurs it then. For the registration test only the part of the value attributable to the input counts.

What is not exempt

There is no exemption for goods on which a carbon price has been paid abroad. Those goods are charged in full and the foreign price is dealt with by carbon price relief, which puts the good on the return with the relief shown against it. Section 147(6) lets the Treasury add exemptions by regulations, and section 156 lets it exclude goods from a country with a linked emissions trading scheme; as at 13 September 2026 no regulations had been made under either power, and no country's goods are excluded.

The check

Mark four things against every covered line in the last twelve months of declarations: was the non-preferential origin the United Kingdom, with documentation; was returned goods relief available and claimed; did the goods contain a UK-origin precursor, with origin evidence and a record of how much went in; and were the goods declared for temporary admission with full relief or for a special procedure. Every mark needs a document that will still be there in six years.