If you are a UK retailer that is considering importing goods, it will be helpful to understand the basic guidelines for customs tariffs. Over numerous years, the United Kingdom (UK) has eased these taxes to the point where many have been totally eliminated. For retailers thatís good news on two fronts.
First, the abolition of various tariffs has made it less expensive for UK companies to import products and has expanded trade. Additionally, free trade agreements and laws have lessened paperwork, streamlining the importation process. However, this does not mean that customs tariffs are unimportant or nonexistent.
This is our first article on the practice of importing products into the UK. In this piece we will focus on basic procedures and laws that govern this process. Her Majesty's Customs and Excise (HMC&E) agency oversees the importing of goods, including the prevention of the importation of illegal products and the collection of tariffs and value added tax (VAT). The government agency in charge of import licensing policy is the Department of Trade and Industry (DTI).
In terms of licensing, most products are covered under the Open General Import License (OGIL) and need no further licensing when coming into the UK. Specific textiles and agricultural products do require special licenses and come under certain controls, including quantity limits, environmental restrictions and health guidelines.
Restrictions apply to hazardous material, explosives, plants and plant products, and animals and animal products. Items prohibited outright from being imported include illegal drugs, weapons and obscene material.
The UK derives certain benefits as a member of the European Union (EU). All countries within the EU have, for the most part, eliminated all protective tariffs when trading with one another. Most goods that are taxed upon entering the UK come from nations that are not EU members.
Nations that are EU members charge a common tariff on imports from non-EU countries. Once the duty is paid, those items are free from any other customs tariffs when passing from one member nation to another. However, Members of the Union may still charge a VAT, excise duty or other local tax.
The EU has certain agreements with non-member nations that allow for preferred import rates, which eliminate or lessen tariff obligations. There is a long list of countries that have been given lower rates. The major nations that do not get a break when it comes to paying customs tariffs are Japan, the United States and Australia.
If you work with the right supplier, importing items can be beneficial in that you may get a good rate, discover unique goods and capture a specific niche in your market. Be sure to consider how much tariff, licensing and VAT rates will add to your overhead and take time to become familiar with proper importing practices as they relate to government regulations.
In our next installment on importing, we regard how a duty is calculated, some specific aspects of duty relief and key concerns and facts about tariffs and the importation of goods.