Importing from China to UK with Neil Curran of Regional Express - a podcast by Michael Veazey

Importing from China to the UK can get tricky at times. Today we learn from Neil Curran about the pros and pitfalls of the logistics industry.





What do you do at Regional Express?

Door to door logistics



Freight forwarding



Eg:  Manufacturer China, India



To the US or UK



Our own warehouse too



Airfreight, Ocean freight etc.



Core services are to help US sellers expanding to Europe.

Freight Forwarding

Door to door logistics



Freight forwarding



Eg Manufacturer China, India



To the US or UK



Our own warehouse too



The core of clients are US-based companies

Typical supply chains from China - pros, pitfalls of each

Manufacturer China-US



Manufacturer China - UK/Europe

What are the potential pitfalls?

Not knowing costs for a new marketplace when importing from China to the UK.



Especially in Europe - a big marketplace.



Know your tax - and duty.



Shipping and freight forwarding costs.

Import duty and VAT

Import taxes and VAT often not taken into account



Sales tax in the online marketplace.



They have a tax department at  the Regional Express

VAT and Americans

It is a tricky subject! Overseas companies don’t really understand VAT. It scares them off with expansion to Europe.



But it’s not as tricky and scary as it seems.



It is just about understanding about what value you have to declare coming into Europe



Then when selling it to end-user, ensure you’re putting enough VAT.



This is because tax returns for VAT in the UK only filed once every 3 months



In Germany and France, it’s monthly.

Top 3-4 facts about VAT in the UK that Americans don’t know



* When importing from China to the UK, you have to pay import VAT. That’s generally paid by freight forwarding company on your behalf.

* The amount is effectively the manufactured amount from say China



If importing from the USA to UK additional factors:



* Any charges from China to the US initially (that can be discussed case by case)



Import duty 

A lot of people miss this.



The VAT is 20% but import duty is product specific.



So know your HTS codes especially as they vary from 0 to 20%

VAT zero-rated

Depending on the type of product VAT can be different when importing from China to the UK.



This is because children’s clothing is VAT zero-rated.



A lot of food products



Always worth checking the HTS code - look at government platforms



HTS code will always tell you:



* Import duty %

* VAT (whether it’s zero-rated)



How are import duty and VAT calculated

Example:



Importing 2000 mugs, weigh 200g each

Landed costs

Value of goods (manufacture) eg £0.75



Shipping cost eg £0.25



insurance eg: zero adds up to “Dutiable value” eg 6% duty for plastic items



Eg: 6% of £1.00=0.06

Landed cost+duty+landing charges = VATable value

Landing charges are based on the size of consignment NOT value of the consignment



The VATable value



VAT adjustment factor



Airfreight shipment of 400 kilos of that would effectively be 40p a kilo “VAT adjustment factor



=£160



The VATable total of 2220



VAT @20% =£444



Per unit = 22p per unit VAT



The VAT is a cash outlay- that money does get refunded/offset against your sales tax.

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