Customs duty is part of the practices of practically every country in the world, which imports products from another country. In the UK, this is calculated by looking at the fair market value of the imported goods at the time they land in the UK. Furthermore, import prices for products which enter the UK will primarily consist of the cost, insurance, freight and duty. In addition to this, the standard 20% value-added tax (VAT) is also charged on the aggregate value.
While this might seem like a rather expensive way of getting goods into the UK from the European Union (EU) or any other location, it’s a legal requirement and must be abided by. In fact, there are strict consequences for not declaring the true value of goods imported, undervaluing them or stating that they are second-hand or used goods when they are in fact new.
And although most businesses make use of third parties to help them sort out their customs from A-Z, it’s good to know where you stand in terms of the different categories of goods that can be imported with little or no customs duties involved.
With this in mind, it’s important to consider whether you can actually avoid customs charges when importing goods from the EU to the UK. According to the gov.uk website, there are indeed cases where no customs duties or reduced customs duties will be charged. It all depends on the particular item at hand as well as its value.
Some examples of these include:
- Goods covered by a preference agreement may require lower customs duties to be paid.
- Re-importing goods you’ve exported before if they’re in the same condition as when you exported them, after exporting them for processing or repair, importing them to process and repair them in the UK. The latter has further sub-conditions that you should be aware of.
- Importing goods temporarily will see you pay a reduced customs duty or none if these goods are samples, professional equipment, items for auction, exhibition goods, or demonstration goods. These goods should not be altered while they are within the UK.
- Relief from duty can also be claimed on educational and cultural goods if they include books, publications and documents for educational or cultural purposes; educational and cultural materials; and museum and gallery exhibits.
- The same applies to medical or scientific goods which are, amongst others, considered scientific materials, scientific instruments and apparatus, laboratory animals and biological or chemical substances intended for research, etc.
Other goods that fall under the broader category of full or partial exemption from customs duties include: printed and promotional goods, goods put to a specific use, sea produce, goods used for funerals and memorials, goods for charity or supporting people with disabilities, goods for personal use, when you move machinery, tools and equipment (i.e. capital goods) to carry out your business and move it to the UK.
The final category relates to goods that you receive by post. These may include either goods considered low-value items or those that are sent as gifts.
It becomes clear from the above that calculating duties and taxes and seeking import VAT deferment requires professional help. The complexities, categories and subcategories of goods that can be imported with no or reduced customs duties differ extensively from one to the next. This is why you need reliable tax accountants in London to assist you and make the process seamless.
At Tax Navigator, our outsourced bookkeeping services in London not only encompass VAT return services but you also get all the help and professional advice you need to make sound business decisions. Don’t hesitate to reach out to us! We’re just a phone call away.