Customs duty and import tax from non eu country - new business

Customs duty and import tax from non eu country...

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I am speaking with a manufacturer in Australia and would like to import their product (consumer electronic) into the UK to sell business to business. Can anybody advise on the best way to do this, what tax implications there are and anything else I may need to know? Obviously, I'm keen to work the numbers to see if the margin I profit is worth it once I pass it on the end user in the UK. I was thinking of setting up a distribution company to do this. Many thanks.

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By DMGbus
20th May 2013 08:41

Tariff preferences

To comply with EU law the UK has to impose import duty (and VAT) on imports from outside the EU.

It can be tricky to find out the rate of import duty from HMRC website (possibly because HMRC have sold the publishing rights to a commercial publisher).

It is not unknown for HMRC to agree a rate of import duty today, then in a few years time claim that the rate was too low and that a different (higher) rate should have been imposed.  This is a risk to be considered.

So google search "tariff preferences" as a starting point.

The VAT imposed ordinarily is recoverable, unlike the duty which is designed to make imports uncompetitive against EU produced products.

Importers have to physically pay the duty and VAT before getting physical possession of the the goods.   A deferment arrangement allows importers to get possession of the goods before paying the VAT and duty.  In cases that I have seen the deferment arrangement requires a bank gusrantee (thus using up an importers credit facilities with the bank).

 

 

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By shaun king
20th May 2013 11:51

Ensure the right commodity code

As the rates of Duty are based on the Commodity Code (CC) for the goods I suggest that you obtain from the Australian company the CC for the goods and ring HMRC and get the rate of Duty from them. It is important that you get the right CC to start.

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