Importing Goods-Customs Clearance into UK
Any goods purchased and/or moved from overseas into the UK are classed as imports.
All imports must be declared to HM Revenue and Customs (HMRC) correctly and any applicable import duty and import VAT 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
The UK is transitioning to the new Customs Declaration Service on the 1st October 2022. Couriers and agents may now ask for further additional information when clearing imports and this may cause delays.
- This step-by-step guidance will enable you to gather the information required to deal with the majority of straightforward imports and to recognise when an import is more complex and you may need further assistance.
- If you are temporarily importing or exporting goods, please see guidance
- If your goods are delayed at customs and/or you have been contacted by a delivery company, please see Goods stuck at the border.
Step by step Guide:
1. Determine value of the goods
Any import taxes are calculated based upon the value.
Purchases - The value is usually the full amount paid to the supplier plus delivery and insurance if not included (known as ‘Valuation method 1’).
If no purchase takes place – The sender should be asked to provide a value based on the cost of production or the insured value (known as ‘Valuation method 5’).
If the total value of the individual consignment is below £135, no import VAT or duty will be due. Note the University may have to account for UK VAT separately, via a self-charge. See Low value consignments not exceeding £135 in value for further information.
Note: Import duty is typically charged on the value of the goods (plus delivery and insurance). VAT is then charged on top of this.
- Goods value (delivery and insurance should be added on if not included) = £1,000
- Duty rate = 2% (see step 2)
- £1,000 * 2% = £20 import duty payable to customs
- £1,065 * 20% = £204 import VAT also payable to customs
In other words, VAT can be charged on the duty.
2. Confirm commodity code on the UK Trade Tariff to obtain the import duty rate
Every type of item imported has a 10 digits code number. It is from the UK Trade Tariff and used to determine the correct rate of import duty.
To obtain the code, consider the following in order:
A) Check, if the supplier has provided it.
The supplier should know the commodity code they are using. It may be included on the purchase invoice, or pro-forma invoice/’commercial invoice’ sent by the supplier/sender.
B) Ask the supplier for it.
Note the first 6 digits of the commodity code or harmonised tariff number are the same globally.
C) Check the UK Trade Tariff.
This includes a search facility for common items.
D) Email the Tariff Classification Service.
If you are uncertain, provide a description to this team.They should be able to advise what code is likely to apply.
3.Confirm any Customs Procedure & Additional Procedure codes
The Customs Procedure (CPC) and Additional Procedure Codes (APC) are used to indicate the reason for the import and must be submitted as part of the import declaration submitted by the delivery company.
They are also used to determine how the import will be processed, including whether any duty and VAT are due to be paid, or whether relief can be claimed.
The standard CPC is 40 00 and APC 000, for a straightforward import where import taxes are expected to be paid.
The University may be eligible to claim VAT and/or duty relief if it is able to meet specific conditions. If this is the case, further instructions should be provided to the supplier/sender and the delivery company to ensure the goods are cleared correctly. Please see the below guidance:
- For Medical VAT relief and other import VAT/Duty Reliefs, please see Claiming Import VAT and Other Duty Reliefs
- If temporarily moving goods in or out of the UK including repair, please see Temporary Import or Export-Moving Goods into and out of the UK
Do not consider claiming import duty relief on items valued under £1,000 as the costs of administering the relief can significantly exceed the benefit (this threshold does not apply to the claiming of medical VAT relief).
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, documentations and customs clearance. The supplier and customer agree which applies.
Delivery Duty Paid (DDP) is the University’s preferred Incoterm. It requires the supplier to be responsible for handling customs clearance and payment of taxes. However, the supplier will need to be registered for both UK VAT and have a UK EORI number to clear the goods into the UK as the ‘importer of records.
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 is not UK VAT/EORI registered, it is likely the University will be responsible for the import.
If the supplier cannot use DDP as above, 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 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.
5.Determine who will submit the import declaration
An import declaration will normally be submitted on the behalf of the University by the delivery company (a freight forwarder, courier, fast parcel operator). Additional fees will be charged by them for clearing the goods and for facilitating payment of import taxes (per 8 below).
- Fast parcel operators (e.g. Fedex, DHL, TNT) will always attempt to clear goods into the UK on the University’s behalf. This may not be the best option however, particularly for high value goods or if special arrangements need to be made, e.g.If goods are to be temporarily exported to another country or vice versa.
- Other delivery firms may be able to clear goods on our behalf, or a separate broker may need to be appointed.
The University has two preferred couriers who can provide delivery and customs clearance services, please see Preferred Couriers for more information.
Where a new delivery company or customs broker is appointed to submit import declarations on our behalf, they will ask the University to complete a form authorising them to act as our Direct Representative. This form can be signed by an appropriate person within the School.
Please do not enter into any standing instructions regarding imports that may happen in the future and do not agree to use postponed import VAT accounting (PIVA).
6. Consider whether any import control or import licences requirements
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 and provide the import notification form
Use the appropriate form below. A copy must be sent to the delivery company.
-Imports notification form – Purchases
-Imports notification form – Non-purchases
The imports notification forms collects data that the delivery companies will need, with standard supporting information. They can then be used as the basis to instruct suppliers, senders and ultimately the delivery companies, who will submit the import declarations to HMRC on the University’s behalf.
As it is the supplier/sender who will appoint the delivery company, in practice it is often better to request they forward on import instructions to the delivery company.
Forward a copy of this and supporting documents to email@example.com so that it can be reconciled centrally
(if you have a query, please raise this with the Finance Helpdesk and not via the import-Export.firstname.lastname@example.org email).
8. Pay any import taxes
The School must pay any taxes due to the delivery company. This is the only method available. The University does not have a (deferment) account with HMRC, and does not use Postponed VAT Accounting (PIVA).
Charges will be made by them for customs clearance, as well as facilitating payment to HMRC. Please obtain a quote beforehand if possible (if not using a fast parcel operator). The delivery company will provide an invoice or request for payment and other supporting documentation (e.g. air waybill) in order for the payment to be made.
If clearance is administered by a preferred courier, a purchase order can raised to them and they will invoice the University.
In other cases, the delivery company may require immediate payment to release the goods. Paying import taxes and admin fees with a purchasing card is the preferred option to minimise delays. Be aware that if a company needs to be set up as a University supplier, it will likely take more time.
9. Obtain the required import evidence from the delivery company
This should be retained locally in the school as well as being forwarded to email@example.com
The following documents should be forwarded: airway bill/bill of lading, 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.