1. Tax and Customs. You may have to pay Excise Duty, Customs Duty or VAT on items sent from outside the European Union on landing in the UK. Often you may be contacted by the courier company explaining how to pay and duties or fees. Failure to pay within 3 weeks could result in your items being returned. Customs duty varies according to the type of goods being imported. There is no charge for anything valued under ￡135. Duty is payable at 2.5% on gifts between ￡135 and ￡630 (certain goods may carry a lower duty so it is always worth checking the official government website). For any gifts with a value over ￡630 or any other goods over ￡135 the rate of customs duty depends on the type of goods being imported. (The government has a helpline number where you can check the customs duty payable at 0300 200 3700).
2. VAT is payable on goods from non-EU countries for any goods with a value of ￡15 or more, or gifts with a value of ￡36 or more. Alcohol, tobacco and any fragrances (including perfumes and aftershave) of any value are subject to VAT. VAT is chargeable on the total value of the goods, plus the postage, packaging and insurance, plus any additional duty owed. Excise duty is payable on all alcohol and tobacco sent from outside the EU; if sent from inside the EU it is always worth checking that excise duty is included in the price, otherwise your goods may be seized.
3. Terms of Purchase If you are collecting your item directly from the factory, this is deemed to be 'ex-works.' This means you are responsible for all charges including Inland transport in country of origin, freight charges, and any duties applicable. One alternative to buying ex-works is FOB (Free on Board). In this case the vendor / manufacturer would take responsibility for transport to the point of export. Carriage Paid To (CPT) is a term of purchase whereby the vendor / manufacturer would pay all transport costs to arrival port, leaving customs clearance and forwarding costs to the importer. In addition to these terms of purchase there is also DDU (delivered, duties unpaid). The supplier would pay all transport costs and any ancillary charges, except for any import duties, VAT or Excise. It is important to make this distinction between terms of purchase before agreeing a rate with an exporter.
4. Representation. Almost invariably a first-time importer will need some kind of representation, normally in the form of a freight forwarder. Freight forwarders act as intermediary agents between the importer and exporter. They will act on your behalf to complete customs formalities, organise transportation, and troubleshoot any potential issues or hidden costs before they occur. It is always worth at least talking to a freight forwarder before agreeing to buy goods from abroad, if only to ensure you have comprehensively covered your expenses, duties, insurance and transportation and have not missed anything out. Although using a forwarding agent will carry a cost, they will often save the importer money in the long run as they will often command cheaper transportation costs through economy of scale.
