The importing of goods into the UK can offer many opportunities and benefits.. Along with providing your business with a competitive edge, it also has the potential to reduce costs and can help improve the range of goods and services you offer to your customers.
With the total GBP value of importing to the UK hovering in the hundreds of billions last year, it’s a worthy opportunity for organisations willing to invest in it. But from the outset, things can seem a little complicated if you aren't familiar with the regulations and legalese that govern the process.
From reducing the costs on your imports to getting the necessary documentation and licenses together, we've created this guide to help you get you up to speed with everything you need to know regarding importing goods to the UK.
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Before you begin importing goods to the UK, there are a number of steps you'll need to follow. If you go with a third party such as a freight forwarder or customs broker, they may help with some of these tasks, but if not, you'll have to complete them yourself.
Additionally, there are also processes to follow at the point of origin, such as declaring exported goods to local authorities where your supplier is based. These can vary by location, so specialist advice may be needed once you've chosen a supplier.
At the UK end, however, the things you'll need to do include:
You might be fined if you have outstanding duty to pay, and if you’re trying to use the incorrect commodity code to import something restricted or hazardous, you’re liable to prosecution, too.
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If your goods originate from outside the European Union, you'll be required to pay import duty. In most cases, goods imported from within the EU are not liable to import duty, and in this case, they’re formally known as acquisitions instead of imports – which we'll cover in further detail below.
If, however, the goods you’re dealing with originated from outside the EU, but are now in free circulation within the bloc, then duty should have been paid on them at the point that they entered the EU. Thus, they can now be moved with nothing further to pay within Europe.
Acquisitions must be declared by the business which first imports them into the EU area, if they were imported from outside the EU and then moved within the bloc.
The VAT paid on goods imported from elsewhere in the EU is known as acquisition tax, and is added to your usual VAT return at the same time as when making a purchase from a UK-based supplier, which currently sits at 20 per cent. You can usually reclaim this if the acquisitions relate to any VAT-taxable supplies that you make.
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The way you choose to have your goods transported is a major cost. There are several different methods, each with their pros and cons, which are as follows:
As this guide has shown, importing can be a costly process with many elements to factor in. Certainly, some of these charges are inevitable, but there are areas where costs can be cut. As well as opting to go with EU suppliers to save on import duty and VAT costs, you can try the following:
Reducing currency exchange costs
When paying your overseas supplier's invoice through a regular bank transfer, you'll incur additional fees and costs, while the exchange rate your bank gives you may not be the best available either.
For international payments, something like TransferWise can be a far cheaper alternative as it provides the real-time, mid-market exchange rate and can be up to eight times cheaper than UK high street banks. Though you do pay a small upfront fee, it's FCA regulated and has over 3 million customers for added peace of mind. Plus, if you're dealing with multiple currencies on a regular basis, then its multi-currency, borderless account won't charge you any fees when receiving money.
Opt for reliability over short-term savings
Unreliable shipping services can sometimes lead to missing or late shipments. Though they might seem cheap, you get what you pay for, and their service can lead to huge financial losses for your business, both directly and through damaging your trade relationships.
It's far better to go for an established, reputable shipping service that has the infrastructure in place to handle large or regular shipments, and that has a proven track record of success in delivering on time.
They should also have a clear, realistic framework of how they'll handle things if something goes wrong, which is essential in ensuring you don't find yourself facing additional costs due to further losses.
Look into duty and tax relief
Certain goods fall under the remit of subsidy schemes that offer incentives to importers in the form of reduced taxes and duties. The Government's Trade Tariff look-up tool can help you find out if any duty relief is available on your goods, so it's well worth doing.
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