Understanding the U.K. Customs Clearance Process
Partner with AIT's experienced brokers for easy U.K. imports
|Alert: New HM Revenue and Customs Declaration Service to Launch in United Kingdom in September 2022
There will soon be a new way for businesses to declare imports and exports in the United Kingdom—HM Revenue and Customs Declaration Service (CDS) is scheduled to launch in September 2022. Learn more.
Expanding your delivery reach into the United Kingdom can be big business. Indeed, bringing in about £505 billion worth of products in 2021 alone, the United Kingdom is the world's fifth largest importer of goods.
Of course, international shipping rules, duties and taxes are constantly changing—and one mistake can put a major dent in your bottom line.
If there are errors in your customs declarations, penalties can range from £1,000 to £2,500 per contravention, and Her Majesty's Revenue & Customs (HMRC) could:
- Initiate a customs audit at your premises
- Demand payment from you of any underpaid duty and U.K. imports VAT going back three years
- Lower your compliance rating more generally across all taxes
That's why so many businesses, across nearly every industry, entrust their U.K. customs clearance processing to expert brokerage partners, like AIT.
Check out this handy FAQ or scroll to the bottom to review AIT's specific U.K. customs clearance services.
What is the difference between duties and taxes?
Duties are a type of tax on goods entering or leaving a country, while taxes are charges placed on almost all purchases. Both contribute to the total import and export costs of a product.
What determines duty and tax amounts?
Customs officials rely on the following factors to calculate duty and tax amounts:
- HS code
Among industry classification systems, Harmonized System (HS) Codes are commonly used throughout the export process for goods. The Harmonized System is a standardized numerical method of classifying traded products. It is used by customs authorities around the world to identify products when assessing duties and taxes and for gathering statistics. Learn more at trade.gov.
- Total value of goods
This includes any freight or insurance fees.
- Description of goods
Found on the commercial invoice, this includes the product's intended use and country of origin. To make sure the goods are classified correctly, the HS code and goods description should match.
- International trade agreements
These can influence the amount of taxes and duties on a shipment. If you're shipping goods between nations (or nations and states) that share a trade agreement, for example, then they may be exempt from duties or eligible for a reduced rate.
Found on the commercial invoice, these define the agreement between sender and receiver about who pays for shipping costs, including taxes and duties. Learn more about Incoterms and how to apply them correctly.
How are required duties calculated for U.K. imports?
Customs clearance professionals like the team at AIT have the tools and expertise to accurately calculate duties. In general, the process involves searching gov.uk to find the precise duty percentage rate for the commodity being shipped. Then, the value of goods is totaled (including freight costs, insurance and any additional costs). Finally, the total is multiplied by the duty rate to determine the amount paid to customs.
How do I calculate taxes due?
The first step involves determining the sales tax (VAT) rate. For example, the United Kingdom has three VAT rates: 0%, 5% and 20%.
To calculate total taxes due to the United Kingdom, the value of goods being shipped is added up (including freight costs and insurance), import duty cost is added, then the total is multiplied by the VAT rate.
There are many additional factors that can impact the final calculation, so it's best to rely on an experienced supply chain solutions partner like AIT to manage this process.
When do I need to pay the duties and taxes on a shipment?
Typically, you must pay duties and taxes due before your freight is released from customs. However, a freight forwarding partner or carrier may be able to pay on your behalf to keep the shipment moving smoothly, then invoice you for the charges.
How long does U.K. customs clearance take?
Depending on import volumes and documentation organization, the U.K. customs clearance process can range from minutes to weeks. Attention to detail on your documentation can help ensure speedy processing for your freight.
What documents will I need to provide for U.K. customs clearance?
Before you partner with a freight forwarder like AIT to secure customs clearance into the United Kingdom, you'll want to gather:
- Evidence of the goods you're importing or exporting, for example, invoices or contracts
- Evidence of any goods you intend to import or export, for example, invoices or contracts
- Description of the goods you import or export
- Appropriate licenses or certifications
- Your EORI number
Enhance your UK customs clearance process with local, expert support
AIT's customs brokerage team is committed to helping your freight cross borders easily and quickly. We have developed a range of customs clearance services to ensure your cargo is safe, transported quickly and cleared easily — every step of the way. These services include:
- Seamless regulatory compliance
- Bonded warehouses in all regions
- 24/7 customer service
- Online shipment tracking, reporting
- Documentation management
- Remote Location Filing (RLF)
- Automated broker interface
- Real-time status tracking
- Document retention
- Purchase Order (PO) Management
- Risk management with Incoterms support
- And much more!
Don't lose time and money to confusing customs policies. Join the world's leading companies in partnering with AIT's U.K. imports and customs clearance professionals for cost-effective solutions. Contact us to learn more or get a quote today.