Import duty is calculated on the type of goods, their value and their country of origin.

For the quickest way to find out details about the rates of duty applying to particular goods is to call the HMRC Tariff Classification Service Enquiry Line on Tel 01702 366 077.

If the goods originate from countries inside the European Union (EU), no duty is payable.
If the goods originate from countries outside the EU, but duty has already been paid on them in another EU country before they reach you, no duty is payable. (more…)

Generally speaking, VAT is payable on all imports at the same rate that would apply to the product or service if supplied in the UK.

Imports from outside the EU

Goods are treated as imports if they have arrived directly from outside the EU or via another EU country without being released for free circulation. Find out which countries are inside and outside the EU for VAT purposes on the HM Revenue & Customs (HMRC) website – Opens in a new window.
You’ll normally have to declare any goods that you import to HMRC and also pay any VAT and duty that’s due. To begin this process, contact the HMRC VAT Helpline on Tel 0845 010 9000. Import VAT and duty must be paid before goods are released by HMRC. Find a downloadable declaration of imports form (C88) on the HMRC website – Opens in a new window. (more…)

If you are using an agent in China their fees can range between 3% – 10% of the value of the goods. This fee normal covers arranging with the suppliers the goods having them delivered to them and inspected for quality control and then loading onto a container.

In addition to this fee you may incur further charges which maybe not included in this fee such as

• Their Bank Charges for when you send over the money to pay for your goods so they can pay the manufactures.
• Couriering the Bill of Lading, Certificate of Origin to you or other documents that you may require to you.

It is important to clarify from the beginning what exactly is included in this fee and have them detail everying in an invoice and confirm again with them.

Shipping costs can vary month to month you can consult an import management company and a freight forwarder for detail break-down on the costs and risks. You can also use an import management company to negotiate the trade terms.

Understand trade terms and use them. Before placing any order, you need to understand and confirm with your suppliers about shipment terms. Most popular are “fob” and “cif”, as well as payment terms. These are closely related to your landing cost calculation and risk assessment.

FOB

FOB stands may stand for “Free On Board” or Freight On Board and is always used in conjunction with a port of loading. Indicating “FOB port” means that the seller pays for transportation of the goods to the port of shipment, plus loading costs. The buyer pays cost of marine freight transport, insurance, unloading, and transportation from the arrival port to the final destination. The passing of risks occurs when the goods pass the ship’s rail at the port of shipment.

CIF

CIF stands for Cost Insurance and Freight. Seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods have crossed the ship’s rail. The seller must in addition procure and pay for insurance for the buyer. Maritime transport only.
For Further information see Tips on Shipping and Incoterms

Depending of the type of cover you are looking for there can be varying degrees of insurance see Incoterms.

When you are looking to bring in your first order either if using a agent based in China or dealing direct with a manufacture, making sure that they include the right type of insurance you require is very important. What you may have discussed with them and what they actually do maybe 2 different things. Once they provided you with the insurance certificate make sure you read the terms carefully and everything is correct and relative to your order.

Most agents and Manufactures in China are more familiar with FOB sometimes it maybe easier to just get them to do this and you get insurance through a UK based insurance company that way you don’t have to worry about what exactly you are covered for as you have arranged it all yourself.

At UK Customs VAT and any Duty will need to be paid. (see Duty and VAT)

On top of this they may be other charges such as. Handling, Dox, Presentaion, Handover, Temp CAF, Clearance, Sercurity and the possibility of Temporary storage costs.

A good UK based Freight forwarder will be able to advise you of the total cost of these charges but this cost will add a few hundred pounds onto your order so it is best to speak to a forwarder.

Ensure that you arrange with the manufacturer or agent based in China that they organise the items to be sent to the nearest port to you, and find out how much it will cost to transport it. If you are not looking to pick up the goods yourself speak to your local freight forwarder to obtain quotes.

If you import goods from outside the European Union (EU), or are an overseas exporter supplying customers in the EU, you need to understand how anti-dumping and countervailing duties work. Special customs duties exist to protect domestic producers against unfair competition from goods imported from outside the EU.

Anti-dumping duty may be imposed for imports that are ‘dumped’ in the EU – ie sold at a price substantially below their normal commercial value. This might be the case when goods are sold in the EU for less than the price charged in the country they originate from. Countervailing duties can apply to imports that have been subsidised by the country from which they originate. (more…)

Incoterms or international commercial terms are a series of international sales terms, published by International Chamber of Commerce (ICC) and widely used in international commercial transactions. They are used to divide transaction costs and responsibilities between buyer and seller and reflect state-of-the-art transportation practices.
(more…)