Phillip John Booker, managing director of operations at Tier1 Logistics Services UK answers some of the most commonly asked importing questions on UK Business Forums.
Importing: What you need to know
Importing goods from overseas suppliers involves all the same issues as purchasing from suppliers in the UK. It's up to you to establish what you require, and find the right supplier. Ceck the supplier is creditworthy and can meet your quality standards. You'll want to check the supplier's subcontractors as well and you need to negotiate deals and manage the relationship.
All of this can become more complicated because of the distances involved and different languages, business cultures and legal environments. Check that any goods will suit your production processes and satisfy customer demands. There are also extra issues to consider, such as whether imported goods meet UK legal requirements or require an import licence.
Resolving problems - such as incomplete deliveries - can be difficult, so it's important to plan ahead. For example, you might decide to hold extra stocks so that you don't run out even if a delivery is late or contains faulty goods.
Logistics and payment
Depending on the contract you agree with your supplier, you might be responsible for clearing goods through UK customs. You might also need to arrange some of the transport and insurance, e.g. from a UK port to your premises.
Draw up a clear agreement setting out each party's responsibilities and who is at risk if goods are delayed, damaged or lost while being delivered. Allow for the extra costs involved, including transport, insurance and import duties and taxes.
Whether you pay these directly, or through a mark-up added by your supplier, they can significantly increase the overall cost of imported goods. Payment issues can also be more complex, particularly if you are dealing in a foreign currency.
Goods which manufactured in the EC, or that have been Customs cleared in one of the EC member countries, can move from between fellow member EC Countries freely or without the need for further Customs Clearance... its what's known in the Freight Forwarding world as 'in Free Circulation'.
Please note: The local Customs authority, at the port of arrival, may ask you to provide documentary evidence to prove the country of origin of your goods, or proof of Customs Clearance. Ensure that you have this documentary evidence to hand or that it accompanies the goods during transit across the member countries borders. If a customs clearance turns up on an invoice you may have you can question this with your freight agent.
Can I Customs clear my own goods?
The answer is: Yes, you can, but we do not recommend it.
This is not because we offer the service of Customs clearance, but more because it has to be done correctly, otherwise you could pay more duty and/or VAT than is necessary. By using a Customs Broker, you will benefit from their experience, which could actually save you money, by not only making sure you pay the correct amount of duty and / or VAT, but also to ensure quick clearance, minimizing any storage charges.
Terms of sale and shipping
This doesn't sound that important, apart from when you are ordering your goods, but you must ensure that you are aware of what effect this has on the amount of Import duty and / or VAT that could be payable, once you goods arrive into the UK.
We always recommend to people who are interested in importing or exporting to either do this via Ex-Works or FOB.
What is an EORI Number?
EORI is an acronym for Economic Operator Registration and Identification.
The EORI system started on 1st July 2009. In the UK, an EORI number is assigned to importers and exporters by HMRC, and is used in the process of customs entry declarations and customs clearance for both import and export shipments travelling to or from the EU and countries outside the EU.
What other information do I need to know regarding an EORI Number?
When importing from outside the EU you will be asked for an EORI number which Identifies importers and exporters to HM Customs.
When does duty and / or VAT apply?
Although each EC member Country applies the same rules to the Importing and Exporting of goods, the rate of tax that each country applies, varies (the UK's Standard tax (VAT) rate is currently 20%).
The method by which your goods arrive into the UK, also affects when import duty and VAT is applied. If your goods arrive via Airfreight, Seafreight or Roadfeight, then the 'Low Value' limit is £18.00.
This should not be confused with the 'Low Value' DUTY limit for Postal, Parcel and Courier shipments. On the 8th December 2009, the EU changed the 'Low Value' limit on these, from £105.00 up to £135.00, (this came in effect, as of the 1st January 2010). This means that any goods valued under £135.00 is classed as 'Low Value goods', and will not have any duty levied on them.
Please note. This is for import duty only. VAT will still apply on goods valued over £18.00. This 'Low Value' rate is also different for 'Gifts' received from outside the EU, where the limit is now set at £40.00 (from £36.00). Any goods valued over these amounts is liable to individual Customs clearance, and if applicable, Import duty and / or VAT payable. The other thing to note, is that UK Customs only collect duty that exceeds £9.00.
Import Duty applies on most products arriving into the EU from any third world country (non-EU country). The rate of duty varies, depending on the commodity / product.
What paperwork you need when importing goods into the UK
You will need the minimum of the following:
- Copy of invoice
- Copy of packing list
- Copy of bill of lading or airway bill
- HM Customs import tariff code
- Permanent import or temporary import
Original Source: http://www.ukbusinessforums.co.uk/articles/what-you-need-to-know-about-importing.161/