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Importing from China to UK with Neil Curran of Regional Express
Importing from China to the UK can get tricky at times. Today we learn from Neil Curran about the pros and pitfalls of the logistics industry.
What do you do at Regional Express?
Door to door logistics
Freight forwarding
Eg: Manufacturer China, India
To the US or UK
Our own warehouse too
Airfreight, Ocean freight etc.
Core services are to help US sellers expanding to Europe.
Freight Forwarding
Door to door logistics
Freight forwarding
Eg Manufacturer China, India
To the US or UK
Our own warehouse too
The core of clients are US-based companies
Typical supply chains from China - pros, pitfalls of each
Manufacturer China-US
Manufacturer China - UK/Europe
What are the potential pitfalls?
Not knowing costs for a new marketplace when importing from China to the UK.
Especially in Europe - a big marketplace.
Know your tax - and duty.
Shipping and freight forwarding costs.
Import duty and VAT
Import taxes and VAT often not taken into account
Sales tax in the online marketplace.
They have a tax department at the Regional Express
VAT and Americans
It is a tricky subject! Overseas companies don’t really understand VAT. It scares them off with expansion to Europe.
But it’s not as tricky and scary as it seems.
It is just about understanding about what value you have to declare coming into Europe
Then when selling it to end-user, ensure you’re putting enough VAT.
This is because tax returns for VAT in the UK only filed once every 3 months
In Germany and France, it’s monthly.
Top 3-4 facts about VAT in the UK that Americans don’t know
* When importing from China to the UK, you have to pay import VAT. That’s generally paid by freight forwarding company on your behalf.
* The amount is effectively the manufactured amount from say China
If importing from the USA to UK additional factors:
* Any charges from China to the US initially (that can be discussed case by case)
Import duty
A lot of people miss this.
The VAT is 20% but import duty is product specific.
So know your HTS codes especially as they vary from 0 to 20%
VAT zero-rated
Depending on the type of product VAT can be different when importing from China to the UK.
This is because children’s clothing is VAT zero-rated.
A lot of food products
Always worth checking the HTS code - look at government platforms
HTS code will always tell you:
* Import duty %
* VAT (whether it’s zero-rated)
How are import duty and VAT calculated
Example:
Importing 2000 mugs, weigh 200g each
Landed costs
Value of goods (manufacture) eg £0.75
Shipping cost eg £0.25
insurance eg: zero adds up to “Dutiable value” eg 6% duty for plastic items
Eg: 6% of £1.00=0.06
Landed cost+duty+landing charges = VATable value
Landing charges are based on the size of consignment NOT value of the consignment
The VATable value
VAT adjustment factor
Airfreight shipment of 400 kilos of that would effectively be 40p a kilo “VAT adjustment factor
=£160
The VATable total of 2220
VAT @20% =£444
Per unit = 22p per unit VAT
The VAT is a cash outlay- that money does get refunded/offset against your sales tax.
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By Michael Veazey
4.5
2626 ratings
Importing from China to the UK can get tricky at times. Today we learn from Neil Curran about the pros and pitfalls of the logistics industry.
What do you do at Regional Express?
Door to door logistics
Freight forwarding
Eg: Manufacturer China, India
To the US or UK
Our own warehouse too
Airfreight, Ocean freight etc.
Core services are to help US sellers expanding to Europe.
Freight Forwarding
Door to door logistics
Freight forwarding
Eg Manufacturer China, India
To the US or UK
Our own warehouse too
The core of clients are US-based companies
Typical supply chains from China - pros, pitfalls of each
Manufacturer China-US
Manufacturer China - UK/Europe
What are the potential pitfalls?
Not knowing costs for a new marketplace when importing from China to the UK.
Especially in Europe - a big marketplace.
Know your tax - and duty.
Shipping and freight forwarding costs.
Import duty and VAT
Import taxes and VAT often not taken into account
Sales tax in the online marketplace.
They have a tax department at the Regional Express
VAT and Americans
It is a tricky subject! Overseas companies don’t really understand VAT. It scares them off with expansion to Europe.
But it’s not as tricky and scary as it seems.
It is just about understanding about what value you have to declare coming into Europe
Then when selling it to end-user, ensure you’re putting enough VAT.
This is because tax returns for VAT in the UK only filed once every 3 months
In Germany and France, it’s monthly.
Top 3-4 facts about VAT in the UK that Americans don’t know
* When importing from China to the UK, you have to pay import VAT. That’s generally paid by freight forwarding company on your behalf.
* The amount is effectively the manufactured amount from say China
If importing from the USA to UK additional factors:
* Any charges from China to the US initially (that can be discussed case by case)
Import duty
A lot of people miss this.
The VAT is 20% but import duty is product specific.
So know your HTS codes especially as they vary from 0 to 20%
VAT zero-rated
Depending on the type of product VAT can be different when importing from China to the UK.
This is because children’s clothing is VAT zero-rated.
A lot of food products
Always worth checking the HTS code - look at government platforms
HTS code will always tell you:
* Import duty %
* VAT (whether it’s zero-rated)
How are import duty and VAT calculated
Example:
Importing 2000 mugs, weigh 200g each
Landed costs
Value of goods (manufacture) eg £0.75
Shipping cost eg £0.25
insurance eg: zero adds up to “Dutiable value” eg 6% duty for plastic items
Eg: 6% of £1.00=0.06
Landed cost+duty+landing charges = VATable value
Landing charges are based on the size of consignment NOT value of the consignment
The VATable value
VAT adjustment factor
Airfreight shipment of 400 kilos of that would effectively be 40p a kilo “VAT adjustment factor
=£160
The VATable total of 2220
VAT @20% =£444
Per unit = 22p per unit VAT
The VAT is a cash outlay- that money does get refunded/offset against your sales tax.
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