In the modern business landscape, the ability for goods to travel across country borders is vitally important. The world is more connected than ever before, and globalisation has led to a huge demand for low-cost imports of popular goods that can then be sold in the UK for profit. If you wish to start an import business so as to enjoy the benefits of this lucrative sector of the economy, you will be pleased to know the process is relatively simple. Below, we have put together a simple guide to moving from a business idea to a fully-functional company in regulatory terms – we hope you find it useful.
Step One: Incorporate your business
Importing requires dedication to rules and regulations, so it is advisable to begin your endeavour by formally incorporating your company. At Prestige Business Management, we have years of experience in helping businesses to incorporate as quickly and efficiently as possible. It is well worth considering outsourcing this process to us, so you can focus on other important aspects of your business plan.
Step Two: Begin the bureaucratic process
The next step to starting your import company is to deal with various applications and regulatory requirements.
- If you are importing from inside the EU, you will need to obtain a commodity code.
- You should not need to obtain an import licence when importing from inside the EU, though it is worth asking a specialist to confirm this, as it can depend on the type of goods you are importing.
If you are importing from outside the EU, then the bureaucracy will be rather more demanding:
- You will need to find the commodity code so as to classify the goods you wish to obtain.
- You will then need to obtain an Economic Operator Registration and Identification (EORI) number.
- You may need an import licence; ask a specialist in this area to advise you further regarding this, as this requirement varies depending on the type of goods you are important.
Step Three: Declare to customs (if importing from outside the EU)
You will need to declare the goods you are importing to customs. This is usually most simply achieved by using a freight forwarder or a courier. You can make your own customs declarations if you wish, but this can be fraught with difficulties, and is inadvisable unless you have substantial experience in this area.
Step Four: VAT and duty
If you are importing from inside the EU, you must include these on your tax return. You will pay VAT at UK rates when importing from within the EU, though you may be able to reclaim the VAT in certain circumstances – you can find out more about this here. You may also have to fill in an Intrastat Declaration if the value of the goods you are importing is higher than £1,500,000.
If you are importing from outside the EU, then VAT and duty is far more complex. You will usually have to pay duty on goods, though you can apply for reduced or zero duty when importing from certain countries. Furthermore, you will have to pay VAT directly to HMRC when the goods arrive in the EU. There are various other caveats and possibilities for relief involved in this process; professional advice is highly advised to ensure you manage this process as simply and efficiently as possible.
A final thought
The information above is correct at the time of writing, but may be subject to change in the future. This is particularly important to note given that this piece was written prior to the UK’s departure from the EU; it is fair to assume that import/export rules may change substantially in the next 12 months. If you are determined to start an import company, then time may be of the essence. It is advisable to incorporate and begin importing as soon as possible, so you’re up and running – and thus more able to adapt to regulatory changes – by the time the UK departure from the EU takes place.