The United Kingdom is dependent on foreign trade which plays a big part in the country’s economy. For this reason the government impose very few restrictions on foreign trade and investment. There are seven ‘Free Trade Zones’ established in the UK: Humberside, Birmingham, Liverpool, Prestwick, Sheerness, Southampton and Tilbury. These zones can allow goods to be stored without tariffs or import duties prior to shipment.
To set yourself up as an importer you will first need to obtain an Economic Operator Registration Identification (EORI) number. An EORI number is used by Her Majesty’s Revenue & Customs (HRMC) when processing customs declarations and clearance for goods coming into the UK from both European Union (EU) and non EU countries.
You can apply for an EORI number at www.gov.uk/eori and the application form you choose to complete will depend on the following;
1: Are you registered for VAT? (You can get an EORI number when registering for VAT online).
2: Not registered for VAT and you are exporting.
3: Not registered for VAT and you are importing.
You will normally be sent your EORI number by email within three working days once you’ve completed the form.
Once you have your EORI number you will be able to register with HMRC as an authorised Economic Operator (AEO)
When importing goods into the UK from the EU you will also require a ‘Commodity Code’. This helps classify goods that are imported and is needed when filling out declarations and other relevant paperwork. It will also be needed when checking if there’s duty or VAT to pay and find out about duty reliefs. From livestock to household furnishings, all goods are assigned their own ‘Commodity Code’, all of which can be found on www.gov.uk/trade-tariff/sections
Import licences For goods imported from inside the EU you will need an import licence. Although for certain items such as firearms, they may require a licence. For countries outside of the EU you will also need to send a declaration to HMRC. For this you will need to send a declaration to HMRC. For this you will need a Single Administrative Document (SAD also known as form C88.
This can be found at: www.gov.uk/guidance/getting-the-right-licences-for-international-trading
Taxes and duties on imports:
When importing goods into the UK it’s important to be aware of Customs Taxes and duties that may apply.
There are three types of import taxes
1: Import VAT
2: Import Duty
3: Excise Duties
In many cases, import duty can be calculated based on a percentage of the customs value of the goods imported. This is known as the CIF (Cost, Insurance and Freight).
Under £15 VAT/Duty Free
£15 – £135 20% VAT
Over £135 20% VAT plus duties – these are determined by the goods ‘Commodity Code’.
When the VAT and Duty exceed £2,500, the shipper will have to produce a ‘Promise to Pay Form’. Unless the importer has a deferment Account with UK Customs.
To find out more go to www.gov.uk-guidance/importing-goods-from-outside-the-eu
Many small businesses can get by on posting products abroad, but if your sights are set on a bigger market you might want to consider using a courier or freight forwarding business. If you are looking to trade on a larger scale you probably need to find out which are the relevant markets for you and your products.
Just as building relationships is an important factor in doing business in the UK, the same applies when you are dealing with overseas markets. Visiting a prospective marketplace is widely regarded as essential if you want to get an idea of how things work, and just as important, so is building a network of contacts there.
Establishing which countries you wish to trade with is the first thing you need to work out. Organisations such as the Department for International Trade can help you decide where in the world you want to trade.
If you are wanting to ship goods within the EU you may wish to check if you need a licence.
www.gov.uk/starting-to-export/licences is a good place to start and will help you find out if there are special rules in moving restricted goods from the UK.
Exporting outside the EU presents a few more issues, such as you may be asked to pay import duty in the country you are sending your goods to. There will be other requirements to take into account such as standards, labelling and packaging. Other things you will need to check are if the country has specific import rules.
When exporting from the UK you will also require a ‘Commodity Code’. This helps classify goods that are imported and is needed when filling out declarations and other relevant paperwork. It will also be needed when checking if there’s duty or VAT to pay and find out about duty reliefs. From livestock to household furnishings, all goods are assigned their own ‘Commodity Code.
An EORI number will also be needed and your freight forwarder will also ask you to complete a Commercial Invoice, which along with the license, will have to be attached to your consignment. If you go to https://www.gov.uk/browse/business/exports you will find help and information on how to obtain the relevant documentation.
Joining a Trade mission is also considered an important step to doing business overseas. Trade Missions can give you access to people, places and potential partners that you may not meet on your own. They can also be very useful in helping you understand the traditions and cultural considerations in the country you are wanting to do business in.
The Department for International Trade Events Portal provides a single calendar view of all Department For Trade Events and Missions, and has been developed to provide companies with more detailed information on each event in order to help them decide on the most appropriate event to attend.