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Importing Goods

Overview

The UK will leave the EU’s single market and customs union on the 31st December 2020. As a result, there will be changes in how goods are brought into the UK from the EU. The new rules will reflect how imports are currently dealt with, between the UK and non-EU countries.

Until 31/12/20 - an import takes place when the University arranges for physical goods to be brought into the EU, regardless of whether they are purchased or not.

From the 01/01/21 – any goods purchased or moved from the EU into the UK, will also be classed as imports.

The import must be declared to HM Revenue and Customs (HMRC) correctly and any applicable import duty, VAT and other taxes must be paid to avoid penalties and delayed arrivals.  

HMRC will hold the University responsible for any error on submitted declarations.

The University’s EORI Number is: GB 849 7389 56 000

 

Aims:

  • This guidance will enable you to gather the information required to deal with the majority of straightforward imports and to recognise when the import is more complex and you may need further assistance.
  • Steps 1 – 6 below must be carried out in advance of the import being brought into the country.

Steps:

1. Determine the full price of the goods

The value is usually the full amount paid to the supplier including delivery and insurance costs. If there is no sale (including hiring, leasing or return of our own goods) the open market value (i.e. the price if they are purchased) plus shipping and insurance should be used. 

The supplier may have provided these details on a ‘commercial invoice’, or be able to provide the UK commodity code for import purposes and should know the commodity code they will use for import. This should be checked.

From 01/01/21 If the total value of the individual consignment is below £135, no import duty will be due but the University will have to account for UK supply VAT via self-assessment as applicable.  See Low value consignments not exceeding £135 in value for further information.

 

2. Confirm commodity code on the UK Trade Tariff to obtain the import duty rate

Every type of item imported has a code number.  The supplier may have provided, or be able to provide the UK commodity code for import purposes and should know the commodity code they will use for import.

Some of the most commonly used commodity codes and their related duty and VAT rates (before any relief is applied) are shown below:

Commodity Code Description Import Duty Rate VAT Rate
38220000 00 38 Misc chemical products, 22 Diagnostic or lab reagents on a backing, prepared diagnostic or lab reagents whether or not on a backing, other than those of heading 3002 or 3006; certified reference materials 0% 20%
29349990 90 29 Organic chemicals, 34 Nucleic acids and their salts, whether or not chemically defied; other heterocyclic compounds, other, other, other, other. 6.5% 20%

49019900 00

49 Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans, 01 Printed books, brochures, leaflets and similar printed matter, whether or not in single sheets, other, other. 0% 0%
39269097 90

39 Plastics and articles thereof; 26 Other articles of plastics and articles of other materials of headings 3901 to 3914, other, other, other, other.

6.5% 20%
90189084 00 90, Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof, 18 Instruments and appliances used in medical, surgical, dental or veterinary sciences, including scintigraphic apparatus, other electromedical apparatus and sight-testing instruments, other instruments and appliances, other. 0% 20%

Import duty is typically charged on the value of the goods. VAT is then charged on top of this.  For example: 

  • Goods value = £1,000
  • Duty rate = 6.5%
  • £1,000 * 6.5% = £65 import duty payable to customs
  • £1,065 * 20% = £213 import VAT also payable to customs

3. Consider what Incoterms apply to the import

Incoterms are a set of internationally recognised rules that define the responsibilities of sellers and buyers. They specify who is responsible for paying for and managing the shipment, insurance, documentation and customs clearance.

They determine:

  • Where title passes (i.e. legal ownership)
  • Who is responsible for delivery to where
  • Who has the insurance risk
  • Who is responsible for the import into the UK

The most common INCOTERMS are:

  • Ex-works (EXW)– customer collects, and title passes at supplier’s premises
  • Free on Board (FOB) / Free Carriage (FCA) - supplier delivers to nominated port in their country (e.g., FOB Shanghai)
  • Cost, insurance, and freight (CIF) - supplier pays for delivery to a port in UK
  • Deliver at Place (DAP)– supplier delivers door to door, but customer clears Customs
  • Deliver Duty Paid (DDP) – supplier does everything

Ex-works should be avoided, as title passing in the country of supply can lead to tax issues, such as the need to register for VAT/GST in that country.

Delivery Duty Paid (DDP) is the preferred Incoterm to use. However, the supplier will need to be registered for both UK VAT or have an UK EORI number to clear the goods into the UK as the ‘importer of record’. They will be responsible for the customs clearance and import taxes, and should raise an invoice charging the University UK VAT where applicable. This needs to be checked before agreeing to DDP.

If the supplier cannot use DDP, Deliver at Place (DAP) is often the next best option but the University will be responsible for clearing the goods through customs and paying import duty/VAT where applicable.

The supplier will often state the incoterm they plan to use on their quote and other documents.

4. Consider who will clear the goods through Customs

An import declaration will need to be submitted on the behalf of the University, by a freight forwarder, courier, fast parcel operator or customs broker. They will normally fees for clearing the goods and for facilitating payment of import taxes.

The University’s preferred courier/customs broker is Deltec International.

In many cases, suppliers will appoint fast parcel operators (e.g. Fedex, DHL, TNT) who specialise in quick delivery from door to door, and will attempt to clear the goods into the UK on the University’s behalf. This may not always be the best option, particular for high value goods or if special arrangements need to be made.

In all cases, please ensure there is a customs broker or similar in place to declare and clear goods through UK customs, particularly when importing from the EU after 01/01/21.

 

 

5. Consider whether any duty or VAT reliefs apply

Do not consider import duty relief on items under £1,000 as the costs of administering the relief can significantly exceed the benefit

If there is a nil rate of duty under the Trade Tariff at Step 2, an application is unnecessary.

Import duty relief can be claimed on:

  • Scientific instruments imported for educational purposes or non-commercial scientific research; and
  • Purchased / donated medical equipment to be used for medical purposes

Contact the Helpdesk if this may apply.

Medical VAT relief may also be claimed on specific goods and medicinal products / substances used for a qualifying medical purposes. Please see Medical VAT Relief for more information.

Import duty and VAT relief can be claimed on goods imported for testing to destruction. Contact the Helpdesk if this may apply.

6. Consider whether any import controls or import licenses apply

There are controls in place for the import of firearms, artworks and antiques, plants and animals, medicines, textiles and chemicals, and an import licence may be required.

For further information and to apply for a licence, please see the Import Licences page.

7. Complete the Import Notification form and send a copy to the supplier and freight forwarder

Import Notifications Form

Include your special instructions, certificates or authorisations on the notification form sent to the freight forwarder and supplier. They will submit the import declaration to HMRC on the University's behalf.

Forward a copy of this and supporting documents to import-export.admin@manchester.ac.uk so that it can be reconciled centrally. 

8. Pay any import taxes that may be due via freight forwarder or customs broker

The University does not have a deferment account and does not use Postponed VAT Accounting. The School must pay any taxes due to the freight forwarder or customs broker. Charges will be made for customs clearance, as well as facilitating payment to HMRC, please ensure a quote is obtained beforehand.

If clearance is administered by Deltec International, a purchase order can raised to them and they will invoice the University.

In other cases, the freight forwarder / customs broker or similar often requires immediate payment to release goods. Paying import taxes and admin fees with a purchasing card is the preferred option to minimise delays.

The freight forwarder will provide an invoice or request for payment and other supporting documentation (e.g. air waybill) in order for the payment to be made.

9. Obtain the required import evidence from the freight forwarder

Forward import evidence to import-export.admin@manchester.ac.uk

The following documents should be forwarded: airway bill/bill of lading, C88 (official Customs evidence), delivery note, commercial invoice and any other relevant information.

These documents need to be retained for 6 years in case of HMRC audit.

10. Special scenarios

Please contact the Finance Helpdesk if you are:

  • Temporarily importing into the UK goods that will be re-exported
  • Temporarily exporting goods that will be re-imported back to the UK
  • Importing goods that will processed or repaired before being re-exported again
  • Exporting the University’s own goods for repair or processing, that will be re-imported once again