Importing from China question

andrewm1981 · 26 July 2016 at 12:43PM

Hi,

I hope you can help me. I'm trying to start up my own business importing handmade canvas paintings from China to sell at fairs and markets. I think things are coming together, but as I'm totally new to importing I had some questions. I've spent quite a lot of time on the HMRC website but there's just too much info there to digest!

The total cost of my imports will be around £800, with postage making it nearer £1100 in total. Both deliveries will be coming via TNT or FedEx, straight from China to my door.

Time is quite critical, so can anyone enlighten me as to the process and anything I can do in advance, any forms to fill out now? Art is subject to 5% VAT and no import duty from what I can see.

Thanks very much in advance for any help :-)

Andrew

bengalknights · 27 July 2016 at 9:31AM

Simply order it and you should then pay the tax as part of the shipping clearance when it arrives, once this is cleared then just account for the cost in your accounts

There will be no forms to fill out as the courier will usually do it on your behalf

paddyrg · 27 July 2016 at 9:40AM

There may be a clearance charge payable which varies by courier, some charge a fixed fee others may charge a percentage, so maybe do your research which courier you want to use first.

I'm sure you're aware that you need to be quite certain of who you're dealing with in China, the business culture isn't the same, and it's possible to get very badly fleeced. If you can pay through a (reputable, agreed) escrow service it'll be safer for you.

paddyrg · 27 July 2016 at 9:46AM

What may happen is that you may get charged excess taxes on import by mistake - as time is of the essence, you can take that up retrospectively with the carrier. It will require the goods to be accurately labeled by the shipper, which isn't always the case.

Insurance whilst in transit - check that the goods are insured for the full value by the shipper. Sometimes they can underdeclare the value to save on shipping/import costs, and then you're fighting when it's an uninsured loss.

andrewm1981 · 27 July 2016 at 11:33AM

Hi, thanks for your replies;

Bengalinights, when you say "pay the tax as part of the shipping clearance", what does that mean exactly, it gets delivered to my house then I pay after, or I pay whilst it's in a customs warehouse?

Paddy, thanks for the heads up. I'm only using companies who are top rated for 7 years on Alibaba, although I have been dealing with them outside of Alibaba as I found that a lot easier. I'm only paying With PayPal, and also paying half up front until I see the work they've done, at which point I'll pay the other half. I did quite a lot of research before hand on the companies, it all seems fine currently.

That's a good point about the insurance. They have said that they'll price it clearly but I'll double check.

bengalknights · 27 July 2016 at 12:06PM

andrewm1981 wrote: »

Hi, thanks for your replies;

Bengalinights, when you say "pay the tax as part of the shipping clearance", what does that mean exactly, it gets delivered to my house then I pay after, or I pay whilst it's in a customs warehouse?

Paddy, thanks for the heads up. I'm only using companies who are top rated for 7 years on Alibaba, although I have been dealing with them outside of Alibaba as I found that a lot easier. I'm only paying With PayPal, and also paying half up front until I see the work they've done, at which point I'll pay the other half. I did quite a lot of research before hand on the companies, it all seems fine currently.

That's a good point about the insurance. They have said that they'll price it clearly but I'll double check.

Usually when clearing customs the courier would send you a bill to pay any duty and vat due plus whatever admin they charge.Once you pay this they usually deliver the goods (DHL are the opposite they deliver first bill later)

andrewm1981 · 27 July 2016 at 12:36PM

Brilliant, thanks. I'll make sure to use DHL then!

martindow · 27 July 2016 at 12:50PM

Are you sure VAT is only 5%? I would expect it to be 20%.

This page is ambiguous as it has one line saying VAT at standard rate and another at 5%

https://www.gov.uk/trade-tariff/commodities/9701100000

Perhaps give HMRC a call. It is also a good idea to give the carrier the commodity code especially if you're right about it being only 5%.

andrewm1981 · 27 July 2016 at 9:19PM

Hi Martin,

Thanks for your input. I think (hope) that page is an error. I have been on a couple of sites, such as dutycalculator.com that state import duty is 0%, and VAT is at the reduced rate of 5%. I gave HMRC a call today, about another question, but was told by the automated system that you had to have the commodity code already. The wait was about 30 minutes though, I'm not calling them again!

Figured I need to fill in an EORI form which seems like it asks a lot of questions that I have no answer for yet. But good idea about giving the sender the commodity code. the extra 15% would be a real killer to the profit!

Aquamania · 28 July 2016 at 3:37PM

andrewm1981 wrote: »

Hi,

I hope you can help me. I'm trying to start up my own business importing handmade canvas paintings from China to sell at fairs and markets. I think things are coming together, but as I'm totally new to importing I had some questions. I've spent quite a lot of time on the HMRC website but there's just too much info there to digest!

The total cost of my imports will be around £800, with postage making it nearer £1100 in total. Both deliveries will be coming via TNT or FedEx, straight from China to my door.

Time is quite critical, so can anyone enlighten me as to the process and anything I can do in advance, any forms to fill out now? Art is subject to 5% VAT and no import duty from what I can see.

Thanks very much in advance for any help :-)

Andrew

TNT, Fed-Ex (as all other large postal services operating in the UK) are well geared up for this.

When the goods arrive into the UK, they will go into customs. TNT/Fed-Ex will know they are there and liase with customs for you and create you a bill. Typical customs clearance fee is about £10 on top of whatever customs want.

You will be advised the cost, usually in the form of an invoice. Pay the invoice and they will let you have the goods

Importing from China question

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