Now that the UK is no longer subject to EU customs legislation, the tax and import duty you pay on your imported goods may change. To avoid nasty surprises or delayed shipments, read our straightforward guide on new UK duty rates and how to pay them.
What is import duty?
‘Import duty’ is the name given to the tax you pay on goods imported from foreign countries. The duty is paid to HMRC and is used to help protect the value of domestic goods in the UK by encouraging businesses to buy locally.
Is import duty the same as customs duty?
The terms ‘import duty’ and ‘customs duty’ are often used interchangeably. One refers to the payment due when the goods arrive at customs and the other refers to the payment due when goods are imported. In essence, there is very little difference between the two.
What is the rate of import duty in the UK?
UK import duty rates are affected by a number of variables, such as the type of goods being imported, the total value of the goods, and the country of export. To calculate your tax, HMRC will need you to supply a declaration document which includes a commodity code and a value calculation of your goods. If you’re using a freight forwarder to arrange your import, they should be able to handle this for you.
The UK holds a variety of agreements across its global trade network, so your costs will depend on the country you’re importing from. If your goods are covered by a post-Brexit trade agreement with the exporting country and meet the rules of origin, you may be able to get a remission or repayment from HMRC.
How to pay import tax
There are several ways you can pay your UK import duty: at the time of importation or deferred for 30 days. To pay at the point of importation, you’ll need to use the Flexible Accounting System (FAS). This is part of the HMRC’s Customs Handling of Import and Export Freight system, also known as ‘CHIEF’. The Flexible Accounting System is essentially a bank account used for making HMRC import duty payments more efficiently.
If you’d prefer to defer your import fees, you’ll need a duty deferment account, which gives you the option to delay the payment for up to 30 days. Deferring helps clear your goods through customs quicker, as HMRC doesn’t have to handle the payment transaction.
As well as import tax, you’ll also need to pay import VAT on your goods, even if you aren’t VAT registered. Companies who are registered can claim import VAT back — you can do this by using your VAT statement as evidence and claiming the cost as ‘input tax’. Remember to keep hold of your commercial invoices and customs paperwork.
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A specialist service like ours can help you secure a favourable exchange rate for up to two years, making it far easier to forecast the cost of imports and potentially bringing down the overall cost of a global supply chain. Because you have the option to schedule faster, more affordable payments, you could even avoid shipping delays and wasted time.
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