If you import from outside of the EU, you will need an EORI number, which is issued by the UK government. Getting this can take up to three days, and it is needed before your goods can clear customs. The registration process is slightly different depending on whether your business is VAT registered or not, but can be completed online.
Your goods should have a commodity code (as for EU imports), and be declared to customs. Usually your freight forwarder will do this for you. If you are importing restricted goods, you might need a license.
You will usually have to pay import duty (and sometimes associated tariffs) on goods imported to the UK from outside the EU. The exact amount payable depends on what you are importing, and it’s country of origin.
The rules regarding import tariff and the process for declaration are complex. The process for declaring the arrival of duty payable goods is described in the UK Government’s tariff notices(which are not for the faint hearted). And the tariff actually payable can vary, depending on the goods, their origin, their value and how they are to be used. Some goods are duty free, including books, software and some mobile devices, while some have lower ‘preferential’ duty applied depending on their country of origin.
Add to this the requirement that all calculations are done in GBP, according to the tax authorities’ guidelines, despite the fact that you probably paid for the products in a different currency, and it starts to get mind bogglingly complicated.
Because of this level of complexity, businesses importing duty payable goods to the UK often use the services of a freight forwarder or specialist importer. Not only does this keep you on the right side of the law, it ensures that you do not accidentally overpay duty, tariffs or VAT. If you decide to tackle declaring and paying import duty yourself, make sure you familiarise yourself with the UK government’s guide to the law first.
VAT is payable on the full value of goods imported from outside the EU. This means that you must convert the cost of goods to GBP, and then add in any other costs associated with their import such as the duty you have paid, and their insurance costs. You then pay VAT on the whole amount, directly to HMRC. The full detail on how to calculate the value of your goods is available on the HMRC website.
VAT remains at the 20% rate, although there are some exceptions. For example you can pay a lower rate on imports of art or antiques, and you may be able to claim back the VAT paid on business supplies.
No VAT is paid on services imported from outside the EU.