I have experienced the opposite to David when working with customs.
I've received quite a few watches from overseas customers where, even though they marked the customs slip as "repair and return", I was charged to import the watch - in some cases many hundreds of pounds. This happened to under 10% of those overseas watches so they generally believed the declaration.
When I'd finished the watch, I would return it and keep copies of my outgoing declaration and the one from the customer. Filling out the form (by hand, as David says) and including copies of both declarations plus my invoice always had the money back in my account within a couple of weeks. There is a small amount that you can't claim back.
For the OP, it's slightly different if they charge him. I suppose he would need to show the watch was loaned out by completing the form and including copies of the declaration from Italy plus some proof that he has owned the watch for many years - the original purchase receipt would help. This, like in David's case may be more difficult to prove but, it should work out in the end. If you need help with the form, let me know and I will try to show the information that I presented to customs although it would not be exactly what you'd need to show.
Good luck and looking forward to hearing the watch is back on your wrist.
Cheers, Chris
