Importing Purple Cows: an introduction to UK imports.

So you’ve read the book by Seth Godin and realised that selling a Purple Cow is better than selling any other run-of-the-mill product. It is likely that even as a marketer, you will come to reevaluate the product/s that you or your client is selling, and attempt to redesign, reinvent or innovate a brand new product. Another option is to examine your local market and then seek great products that have already been developed and aren’t already being sold and distributed in your own country.

This leads me to the subject of importing goods to the UK, which brings a whole new range of issues to any company that is new to the import workflow.

Here I will try to give an overview of the major points I have recently encountered, in establishing a brand new import business, since a lot of this information wasn’t readily available in a single source. I will try to make it read in layman’s terms too, so not to scare you with the jargon that complicates much of this procedure.

VAT

Import VAT is payable on any imports from countries outside of the EU. Please refer to this page for the full list of countries included and excluded:

http://www.hmrc.gov.uk/VAT/managing/international/esl/country-codes.htm

Customs Duty

Trade between EU countries is Customs Duty-free.

Customs Duty for imports from countries outside of the EU can be quite a complex beast. I’ll try to explain my understanding of it, but I would suggest you read more on the sites provided below.

Any goods arriving from countries outside of the EU will be subject to customs duty, if over the value of £120, and depending on their classification according to a book published called “The Tariff”. Luckily for us there is a free online version of this available at the Business Link Tariff website.

You will need to try and classify your product according to the online tariff, which will tell you whether you need to pay any Customs Duties. Although the online tariff is a good guide – if you are unsure about your product’s content or make-up, then you should consider using the HMRC Classification Service.

Lastly, consignments below £18 are customs duty-free.

Excise Duty

Excise Duty is strict. If your goods are alcohol or tobacco products, then excise duty has to be paid. Excise Duty doesn’t apply to other goods.

Labelling

Ensure that the labels attached by your supplier clearly state the following:

  • The full value of the goods including shipping fees and any local taxes
  • A full description of the goods
  • The senders full name, address and telephone
  • The recipients full name, address and telephone

These are important for both customs clearance and in case the parcel gets lost! Common sense, yes, but necessary.

EORI Numbers and Why You Need Them

The Economic Operator Registration and Identification (EORI) scheme was introduced 1 July 2009 to tie-in with the European Union, and replaces the previous TURN system that was in place here.

The bottom line is that if you are bringing goods into the country for trade or commercial use, then you really need one of these. Even private individuals regularly importing goods are required to register for one of these numbers.

Luckily, the process is fairly straightforward (very unlike HMRC in general) by submitting a Word document to them via email.

EORI Application Information

Surface Mail – Shipping – Air Freight

So, at this point you have your ducks in a row, and are ready to decide on a shipping method with your supplier. This decision very much depends on the quantity, size, weight and value of the goods you are importing.

Generally speaking – and especially for the new importer – the likelihood is that Surface Mail (often referred to as EMS) will suffice. This service uses the normal postal service (with air-mail services connecting the two countries) and has some limitations on weight/size/value depending on the operator, so this is something you will need to research and ask your supplier about.

Larger imports will require either a shipping service or air freight, but this is really out of the scope of this post.

The Parcelforce Monopoly

Now this is the fun part that almost nobody out there will tell you, except for perhaps a few forums or blogs.

You’ve finally got your tracking number and are checking it far more frequently than you probably should.

But you’ve realised, what actually happens when it arrives in the UK?

  • Does it just appear at your door?
  • Who gives it to customs?

Well, as it happens. Parcelforce are the logistical ninjas working behind-the-scenes to help do all this for you.

  • They will kindly pass the goods over to customs for inspection.
  • They will kindly pay any fees including VAT, Customs Duty and Excise duty on your behalf.
  • They will kindly deliver the parcel on to you finally; but only once you kindly pay them back for the fees owing, including either £8 or £13.50 (EMS, GLS or items over €1000) in handling charges from Parcelforce themselves.

My suggestion is that once you know the goods are in the country, contact Parcelforce, and keep contacting Parcelforce until you finally receive the notification slip at your door, that you need to pay fees.

Once this is received, your goods should be ready for delivery or collection from your local Parcelforce depot – so quickly pay the outstanding fees online or by telephone.

Done!

I’ve worked out a little formula to understand the costs involved.

Import Cost = Cost price + Shipping + Shipping Insurance + Customs Duty + VAT + Excise Duty + Parcelforce Charge

And there you have it – my little guide to importing your first Purple Cow into the UK. Good luck!

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