If the sale has already taken place on Amazon, and I ship the product from my country to the final consumer in the UK, with VAT already collected and an EORI number in hand, what are my obligations? My intention is not to burden the customer with any additional costs. I wish to cover any potential import duties if customs imposes them. Will the presence of an EORI number facilitate the clearance of the package, allowing me to later invoice and pay directly to HMRC based on that record?
hello sir i want to get cargoo from china to uk amazon fullfill center which the best and cheap way ?is it take supplair freight farwadar or get arrange third party freight farwader? how i get the cheap freight farwader ? so which is the best way plz explain
Thanks for this video!!!! The UK is so vague with charges! Even after lots of research I knew about the handling fee and VAT, but not tariff tax. So many thanks! You have made things a lot easier by bringing all the info together. I don't know why royal mail and DHL don't make this obvious so it is less of a shock to people picking them up. It is quite scary paying a lot on an item from abroad, and not really know what else will be charged when it arrives. This also gives people proof of what to challenge if it feels like they have charged extra for no reason.
Hopefully by the end of this video you'll understand exactly how to calculate Duties & VAT when importing goods into the UK! P.S: It's important not to get confused between the incoterm 'CIF' and 'CIF Value' as these are two different things.
I did understand, I am about to start Amazon Fba , I’m learning everything step by step , i ordered sample of product, I paid for sample + shipping today got text message saying I have to pay £25 for import duties , sample cost me £30 including shipping , I was looking for information on import duties and I got lucky you just uploaded detailed video of Duties thanks a lot , But still I can’t understand why I been charged so much by dhl ,
Hey, did you want till the end of the video when I talked about hidden fees? It's likely they have charged you an admin clearance fee, which tends to be around 5% or £20, whichever is higher.
Luca Davenport yes I did watched whole video and I got that admin fee part as well they charged me £11 admin fee , Luca ur star very detailed video thanks a lot , you got new subscriber 👍🏼
Hey, in that situation you can claim that back. If your product was shipped via a courier then you should be able to claim a refund through them or alternatively directly with HMRC.
Hi Luca, very helpful video, thank you! I have a question, how do we calculate VAT and customs duty when we have different types of products in the same container that have different custom duty %?
Hi Luca, thanks for the video! I am a seller based in Australia, and I am trying to figure out the costs (VAT etc.) for when I ship my products from Australia to the UK. As you explain in your video I will have to pay Import Duties and VAT when my products enter the UK. As an overseas business I will also have to pay VAT on my sales and I won't have the VAT free threshold. Does this mean that I will have to pay VAT when I import and also when I sell my products? Does this mean I would be charged VAT twice? Just trying to wrap my head around the cost implications to see if selling in the UK is actually viable for me, as this would be a huge expense. Thanks!! :)
Nope you don't need to be VAT registered until your business hits £85K in annual revenue. I've your business is not VAT registered you need to pay import VAT and VAT on all business expenses, however don't need to charge VAT on your sales. If your business is VAT registered you can claim back import VAT and VAT charged on business expenses, however need to charge VAT on sales. You might find this video helpful: th-cam.com/video/xpnz-hUlJvA/w-d-xo.html
Very informative video. What documents we need to have ready and how to prepare it for non business person to ship about £350 pounds value parcel by train? New to this, just need 200 jars for candle making and can't get my head around it.
Hi Luca. Great video. I'm still a little confused however. I just ordered my first shipment which was my supplier did through UPS. It made it through customs and has been selling for a month on AMazon so I believe that UPS paid the customs and VAT on my behalf. The UK gov people I spoke to on the phone said that unless I used Royal Mail or Parcel Force that I would always have to pay this kind of extra commision to the company. What I'm wondering is where your process in this video comes in? I have my commodity code but I don't understand when and how I'm meant to use it. Is there a particular form I should fill in and if so to whom should I send it to? Also, should I ask my supplier to use Royal Mail or Parcel Force? Not too sure if they go from China. I'm basically very confused and while I would like to use your process above I'm missing the steps to do it. Any help would be really appreciated. Many thanks, Seb
Hey, so it's not really a process that you need to do, this video is just to help breakdown and explain import fees. Normally either your freight forwarder or courier will pay the import duties and VAT on your behalf and then invoice you some time later and as mentioned at the end of the video they will normally charge you a small fee for paying up front on your behalf. You may still receive an invoice from UPS, give it a few more weeks. Also RM and Parcelforce don't ship from China.
@@LucaDavenport Hi, if you order through ups, fedex etc. you do not need to fill any forms before or after the shipping as you do when ordering bigger qty's?? just wait for the invoice and pay? if you ship directly to amazon how will they know as to where to send that invoice? thanks!
If your shipping your goods via express air shipping using a courier such as TNT, DHL, UPS etc, you/your supplier will need to attach a commercial invoice to the shipment. This invoice will include information about your supplier, the goods being shipped and you as the importer. It should include your EORI number and this is how the import is connected to your company. Of course if you book the shipping with a freight forwarder they know to invoice you as you are the one who's booked the shipping.
I have just watched the video which was fantastic and made the whole process much clearer. Just one query, we are VAT registered so I presume that the VAT that we are charged on the good imported, we can then claim back at the end of our VAT quarter? This would then reduce the unit cost of each item. Regards
Glad it helped! Yes exactly, if you pay import duty at the time of import, you can claim this VAT back when you do your VAT returns. Alternatively you can join the governments new "PVA" (postponed VAT accounting) scheme, which means you won't have to pay the import VAT at the time. This option is better for cashflow. Give it a Google. Hope that helps!
Very informative, I'm assuming this is EXW purchases and not DDP, I normally purchase DDP but want to start claiming the VAT back rather than getting the supplier to pay the taxes.
Hello, we have not registered for VAT as do not reached to the threshold. Alibaba will charge VAT on purchase. I am dealing a DDP shipment from the supplier to UK. Will I be paying VAT once again when goods will enter in UK?
The courier admin fees do my head in. I dont want my customers getting a surprise fee to pay, and it seems SO MUCH when only buying lesser priced items. I still dont have the hang of it all, but this part feels make or break for importing from the eu to the uk. Is there somewhere i can get more info to understand this better?
How come I wasn't asked to pay any VAT or customs duty when I bought a belt on Amazon, which was delivered from China in 2016, or was it because it was prior to Brexit, or has it got to do with the price of the item? Thanks you for shedding a bit of light on this, as I want to order an item again on Amazon sent from China.
Hey, like you said that was several years ago and since Brexit things have no changed. If you were to buy a belt from China now, you will likely be charged VAT and import duties by Amazon at checkout.
@@LucaDavenport You're right, Amazon charges them at checkout. Thanks Brexit and all the fuckers who voted for it, Boris - the embarrassing buffoon - in the first place.
Hi Luca, your video is really helpful. I registered the Vat when I set up the limited company, but I have not sell anything so far. Can I degregister for the VAT?
Yep you do. If you are VAT registered and you sell them, you can then claim the VAT back but if you are just an individual buying personal products from abroad, yes you have to pay import VAT and can't claim it back
Hi ordered a watch from aliexpress and I am an international student in UK and I don't have a vat number and etc. I heard that I have to pay a tax and etc can you help ?
I have paid for a tester on alibaba do u get charged for this already paid VAT on check out am I expecting anything else to pay ? Even thow it was a low cost tester Item
Yep, if you ship DDP but most professional businesses do not purchase / ship on DDP terms. Instead they will purchase on EXW or FOB terms and use their own freight forwarders.
Hey so technically DDP means Delivered Duties Paid, so import VAT may still need to be paid but the import duties should be included in the price. That said, when suppliers say DDP, they sometimes mean the price includes import duties & VAT, so I would check with your supplier to see whats included
DDP stands for Delivered Duties Paid, however normally also covers the cost of import VAT as well so you shouldn't normally have to pay either of these yourself if you have agreed DDP terms
Hiya! Brilliant video, but! I went to the HMRC, found my commodity code but there was no % next to it! Is it because HMRC have updated or is it because I'm looking on mobile? Thanks in advance!
Excellent Video. Question) We are US Seller trying to grow in UK. Would you recommend any specific company which has low hidden fee (administrative fee)? or Can hidden fee be waived if the seller are VAT registered or Duties are somehow pre arranged?
@@LucaDavenport Thank for your input. Not interested in deferment account. Would you recommend a company which charge reasonable fee and provide good service?
If you are not VAT registered you need to pay both import duties and import VAT. If you are VAT registered, you can claim the import VAT back from HMRC.
Right now, I don't see any EORI number requested, or any store charging VAT. If the EORI number does not matter, then why would I use it then? (especially if i can use the EORI number of my fulfillment center). Also, the chances that the HMRC is going to chase a Dutch company that is selling to the UK, is very little. I don't see how any import can be tracked by to my company. Is it needed to put a company name on the package? A url? A name of store? The bank account that paid for a particular order? (I don't believe a fulfillment center in China would have it that well documented). I am sure enough that most people in the industry would take the chance. Since no store charges VAT. This really puts me in a disadvantage. Can an import be tracked back to the point of sale at all times?
Hi Luca. Incredibly helpful video, thank you so much. I have a quick question... you mentioned the manufacturer/supplier in China not charging VAT, but for all of my samples I paid VAT, and for my bulk order soon, I am being quoted with VAT? Only way not to pay VAT through Alibaba is if I am VAT registered. I shouldn't have to pay VAT to supplier and also import VAT and duties should I? Thanks again, Josh
No worries, glad it was helpful! So things have changed quite a bit since I filmed that video. The UK government now forces companies like Alibaba to charge VAT at checkout and pass it on to HMRC. If you pay VAT at checkout, you shouldn't then also be charged the same import VAT again at customs, however if you do you can provide proof to HMRC and they will refund you for one of the payments.
@@LucaDavenport This video was amazing. But can you do an updated version since the changes on Alibaba? There appears to be a lack of info on this, which is quite huge that there is now the 20% VAT to pay at point of sale.
Would this all be predetermined/calculated before you commit to the manufacturing of your product? Then you’d recalculate your profitability per unit to see if it’s still viable?
Yep exactly! You need to get some rough shipping quotes in and work out what your import duties and VAT will be before negotiating on price with your supplier and committing to manufacturing.
Random question - say I've imported my goods to the UK from China and paid the import VAT and duties. What happens then if I import those goods from myself to Amazon in Germany - what value do I declare the goods have when importing to the EU?
You would need both a UK and EU EORI number and you would essentially be exporting the goods from the UK to the EU but you would retain ownership, therefore on the export/import declaration you would need to state that no import VAT or Duties is due as the products have not been sold. I would recommend working with a freight forwarder who can do this all for you.
What happens when you buy from E-Bay who charge vat at point of sale ? does as has suggested in the media customs charge VAT over and above that already collected by the seller in this case E-Bay?
If you are based in the UK and are VAT registered, then you are responsible for collecting VAT on Ebay sales. If you are based outside of the UK, then Ebay will collect VAT on your behalf
Hey Tom, glad it was helpful! If you’re not VAT registered then you will need to pay import VAT. If your company is VAT registered then you can claim that VAT back. I’ve got a video that explains this all in more detail here: th-cam.com/video/xpnz-hUlJvA/w-d-xo.html
This was super useful. I’m trying to buy something on ebay that’s roughly £35. When I go on the government website, they state that non-excise items less than £135 will not have any custom duties? Does this mean my item will have no tax added on it?
Hey, if the item is under £135 then you will not need to pay import duties, however will still need to pay VAT. Instead of import VAT, this VAT should be charged by eBay at checkout.
Yep you should always ask for your supplier/freight forwarder to use your company details and EORI number on the commercial invoice for customs purposes, however if shipping DDP they will be covering the duties and most likely VAT. That said I would recommend avoiding DDP as there are a lot of dodgy tactics used by Chinese suppliers to reduce their import duties and vat costs such as undervaluing the goods etc. I would recommend purchasing on EXW or FOB terms and using your own freight forwarder to be 100% safe.
I am going to courier my personal PC from USA to UK...AND IT LOOKS LIKE IM GOING TO HAVE TO PAY DUTIES!?!?!?! i should have paid extra luggage costs but was worried about it being chucked around by bagage handlers!!! Is their anyway i can just have it fedex/UPS/USPC to me with no duties?!?!?! It's crazy. Any help? Please?!
I am wanting to place an order of allibaba and in the shipping terms are DAP Express. And the agent in china is telling me they will ship directly to my door and all duty + vat is included. Is this correct ?
No that is not normally the case. Both will deliver the goods to your door / final destination. DDP means the seller will cover all import duties and taxes. DAP means you(buyer) are responsible for paying the import duties and taxes
Still a little confused. It's my first time importing goods. Am I required to pay 20 percent VAT on goods value, or goods value plus shipping plus insurance? I was under the impression it was just the goods value. Also do I prove value of goods through commercial invoice and separate invoice for shipping?
So you're required to pay 20% VAT on the total value of the goods which is (Value of goods + Shipping + insurance). HMRC will work this out using the commercial invoice and shipping invoice (Bill of lading / BOL).
@@LucaDavenport Many thanks. One last thing. Are they any recent changes to suggest VAT is paid at alibaba platform or is it still usually paid once it arrives at UK port? Will HMRC rely on just above documents or any further information?
Hello I just ordered goods from China and the delivery service provided is DDU. My item is going to be shipped next week. When should I pay VAT and customs? When it arrives or when they ship it ? Thanks. I have my supplier my Uk EORI number too. Hopefully you can reply back.
Hey, it will depend on what shipping / incoterms you have agreed to. Has your freight forwarder / shipping company not advised you on when the VAT & Duties need to be paid?
In most cases the freight company will pay the VAT & Duties on your behalf to get the goods through customs and then you will receive an invoice at a later date
Hi, I'm making bids for an item located in Belfast on eBay. Before I proceed I would appreciate if you could let me know whether I'll have to pay VAT and/or customs duty. I live in England. Cheers.
Alibaba is also charging me VAT. So I'm paying import VAT (via DDP) and also VAT to alibaba. I'm not VAT registered so i can't claim these back. Is there a way to avoid paying VAT to alibaba?
Nope, not unless you are VAT registered. But that is why I wouldn’t recommend using DDP. Instead use your own freight forwarder and they will be able to avoid you paying import VAT if you have already paid VAT on Alibaba.
After you find the vat for the total cost for the product you importing , then you mark up the cost by let’s say 30% to get your profit then do you have to add 20% to the selling price and then you get the final selling price ? Or do you just add VAT for the cost of the products like you explained and then mark up cost by 30% and that’s the final selling price ?
That will depend on whether you are VAT registered or not. If you are not VAT registered you will need to pay import VAT (input VAT) but you will not need to charge VAT on your sales (output VAT). Therefore you just need to work out your markup based on total landed cost of goods sold (which includes import VAT). No need to worry about adding 20% on top.
@@LucaDavenport but if the company is VAT registered,? So in my senario I am creating a spreadsheet for a company that imports cheese , I have the base cost based on exchange rate from euro to pounds and then from that I have to mark up the cost by 40% for my profit and times the average units sold per month , I’ve been told to add VAT in this scenario and I can’t get my head around it
If your company is VAT registered then you don't pay import VAT (input VAT) but will need to charge VAT on your sales (output VAT). If your business is VAT registered, you need to work out all profit margins on ex VAT prices. You might find this video helpful: th-cam.com/video/xpnz-hUlJvA/w-d-xo.html
@@LucaDavenport so it’s the VAT applied to the cost price + mark up which is selling price in my scenario or do I apply VAT on cost price and then markup the result to get my selling price
That means that no import duties are charged on that product when importing into the UK, which is great! You will still have to pay import VAT though, unless VAT is also 0%.
The 7.5% Flat Rate Scheme (FRS) is a type of VAT registration and applies to 'Output VAT' (the VAT charged on sales) not input VAT, such as import VAT. If you are not VAT registered, you will need to pay 20% import VAT.
So the VAT the government gets will be a lot higher when you become VAT registered versus paying during the import process, 20% on every unit means you'll need to readjust your profit margins
Yep, once you are VAT registered you will likely end up paying more VAT to the government and your profit per unit will go down slightly so it's important to plan for that.
Hi, what if I am importing two pallets of “samples” to introduce it to wholesalers. In this case do I still have to pay customs duty? Manufacturer is going to send it at no cost! I am only responsible for shipping and they arrive from an EU country into the UK. Do I have to provide an EORI number? Thank you in advance :)
That is quite a unique situation, so I'm not 100% sure I'm afraid! You do not need to pay import duties/VAT on 'commercial samples', however this normally relates to samples that factory send your company to try and win the business. It all depends on whether what you described still counts as a 'commercial sample'. I would speak with HMRC for clarity.
So when the duties are worked out by yourself is this just for piece of mind? Do customs work it out for themselves or do you tell them yourself what you owe? Also with EORI number and commodity code will the seller from alibaba automatically put this on the shipping label for you or is it your job to do the label? I'm confused if you buy something on alibaba and they ship it to you why you use a freight forwarding company? Is the shipping something you should organise yourself?
HMRC will work it all out for you but it's important to know how to do the maths so you can accurately do profit calculations beforehand. The seller should create a 'commercial invoice' for you and you should request that they add your EORI number onto that invoice. If you're just shipping one of two units or sample, then it's fine to get the sellers to ship it to you. If you're shipping large quantities, it's always better to use your own freight forwarder so that you have more control and a UK point of contact. There are a lot of things that can go wrong during shipping and the more control and visibility you have, the better.
@@LucaDavenport thanks man I really appreciate your response, I recently had a pay cut so I'm looking for some added earnings, I was struggling with the info I was getting elsewhere so thanks a lot for your time this is a big help for me
Is there a way to reduce import tax when sending small items to countries outside the UK (german, Latvia ect). I don't seem to need to pay any import tax when shipping to the US? Does anyone know why this is?
Hi Lucas, What happens if you are importing from China DDP and they are covering all costs, What happens when I sell my product in the UK how do I then claim my Vat back as this would mean Vat is being charged twice?
Hey Leon, if you're business is VAT registered you don't want to let your supplier ship your products DDP as they will usually use their own business or a partner business as the UK importer on paper. This means your business won't be the business paying the import VAT, you won't receive a C79 and won't be able to claim back the import VAT.
Hi this was very interesting, thank you. I have a question though. I am not a business or commercial Importer, I am buying a poster from a private seller within the United States, to be sent by courier to myself, here in the UK. The value of the poster is £250. Does everything in this video still apply to me? Grateful for your advice ✌️
Hey, glad you found the video helpful. Yep, everything in the video will apply to your order. You can find more info here: www.gov.uk/goods-sent-from-abroad/tax-and-duty
Hey, there used to be a £135 threshold, however since Brexit happened that has now been removed so you may need to pay import VAT and import duties on the product even if it is only $100
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If the sale has already taken place on Amazon, and I ship the product from my country to the final consumer in the UK, with VAT already collected and an EORI number in hand, what are my obligations? My intention is not to burden the customer with any additional costs. I wish to cover any potential import duties if customs imposes them. Will the presence of an EORI number facilitate the clearance of the package, allowing me to later invoice and pay directly to HMRC based on that record?
Thanks man, no one on internet could explain this more clearly than you. Big thanks
Happy to help!
hello sir i want to get cargoo from china to uk amazon fullfill center which the best and cheap way ?is it take supplair freight farwadar or get arrange third party freight farwader? how i get the cheap freight farwader ? so which is the best way plz explain
Hello sir, I am wanting to import leather shoes (Brogue) from India. CIF £3971. How do I work out duty & tax
Hello. Mam
My name is Kripalsinh .
I am from India. I am a exporter of Indian products
I am searching buyers . Are importing good from India
@@debrinchkdltd3684 hello i am from India and exporter of Indian products can we talk more about it
Thanks for this video!!!! The UK is so vague with charges! Even after lots of research I knew about the handling fee and VAT, but not tariff tax. So many thanks!
You have made things a lot easier by bringing all the info together.
I don't know why royal mail and DHL don't make this obvious so it is less of a shock to people picking them up.
It is quite scary paying a lot on an item from abroad, and not really know what else will be charged when it arrives.
This also gives people proof of what to challenge if it feels like they have charged extra for no reason.
Considering all these costs and looking at the competitive market a new comer small business would not have too much hope
Exactly where I find myself. Daylight robbery this
Wow, this is what I've been searching for days, finally got the info i wanted. Very helpful. Many thanks for this video Luca👍
I am only 2 minutes into the video is by far the most informative video out there. Thank you very much🙌
Please help. When he's talking about insurance. What insurance are we talking about?
Hey, I'm talking about cargo insurance
Hopefully by the end of this video you'll understand exactly how to calculate Duties & VAT when importing goods into the UK! P.S: It's important not to get confused between the incoterm 'CIF' and 'CIF Value' as these are two different things.
I did understand, I am about to start Amazon Fba , I’m learning everything step by step , i ordered sample of product, I paid for sample + shipping today got text message saying I have to pay £25 for import duties , sample cost me £30 including shipping , I was looking for information on import duties and I got lucky you just uploaded detailed video of Duties thanks a lot , But still I can’t understand why I been charged so much by dhl ,
Hey, did you want till the end of the video when I talked about hidden fees? It's likely they have charged you an admin clearance fee, which tends to be around 5% or £20, whichever is higher.
Luca Davenport yes I did watched whole video and I got that admin fee part as well they charged me £11 admin fee , Luca ur star very detailed video thanks a lot , you got new subscriber 👍🏼
Hi I just want to buy something from USA and the price is £73 plus £12 shipping so should I pay vat and duties for this item thanks
@@Soni-asghari do you know if i buy £112 total price which is small amount of clothes .do i have to pay tax
Hi been told no VAT & Duties if the product value includes shipping and tax in other country is less than £135. Could you confirm that please?
Thanks dear .
You have explained it such a nice way so that any one can understand easily.
Thanks, glad it was helpful!
Hello.
My name is Kripalsinh .
I am from India. I am a exporter of Indian products
I am searching buyers . Are importing good from India
Thank you for this video. I do not understand why sometimes we have to pay this and at others there is nothing to pay ?
Sometimes sellers will send shipments as 'commercial samples' of 'gifts' and these then won't incur any import duties or VAT.
What a video, you explained it so simply and precisely!
If you buy an item from USA and then want to return it what happens to the custom charges? Especially if the items wasn’t delivered on time… thanks!
Hey, in that situation you can claim that back. If your product was shipped via a courier then you should be able to claim a refund through them or alternatively directly with HMRC.
You're the man! Thanks, really appreciate this video I was super confused until I watched this!
Glad it helped!
want to import from India ? I will be happy to help you
Hello.
My name is Kripalsinh .
I am from India. I am a exporter of Indian products
I am searching buyers . Are importing good from India
Hi Luca, very helpful video, thank you! I have a question, how do we calculate VAT and customs duty when we have different types of products in the same container that have different custom duty %?
Hello.
My name is Kripalsinh .
I am from India. I am a exporter of Indian products
I am searching buyers . Are importing good from India
As a side note, HMRS are Сunts
Everyone gets ripped off in business
Hi Luca, thanks for the video! I am a seller based in Australia, and I am trying to figure out the costs (VAT etc.) for when I ship my products from Australia to the UK. As you explain in your video I will have to pay Import Duties and VAT when my products enter the UK. As an overseas business I will also have to pay VAT on my sales and I won't have the VAT free threshold. Does this mean that I will have to pay VAT when I import and also when I sell my products? Does this mean I would be charged VAT twice? Just trying to wrap my head around the cost implications to see if selling in the UK is actually viable for me, as this would be a huge expense. Thanks!! :)
want to import from India ? I will be happy to help you
Just what I needed to know brilliant thank you.
Hello.
My name is Kripalsinh .
I am from India. I am a exporter of Indian products
I am searching buyers . Are importing good from India
A million likes for this video. You did such a good job of breaking it down for me. Double thumbs up!!
Hello.
My name is Kripalsinh .
I am from India. I am a exporter of Indian products
I am searching buyers . Are importing good from India
Are we going to calculate VAT 20% on Selling price of Amazon as well or not? Please guide
Thanks mate, just one question, So we need to register VAT for our business before importing?
Nope you don't need to be VAT registered until your business hits £85K in annual revenue. I've your business is not VAT registered you need to pay import VAT and VAT on all business expenses, however don't need to charge VAT on your sales. If your business is VAT registered you can claim back import VAT and VAT charged on business expenses, however need to charge VAT on sales. You might find this video helpful: th-cam.com/video/xpnz-hUlJvA/w-d-xo.html
Very informative video. What documents we need to have ready and how to prepare it for non business person to ship about £350 pounds value parcel by train? New to this, just need 200 jars for candle making and can't get my head around it.
Very useful, thanks!
When do you pay those though?
You will normally pay this to your freight forwarder when the goods arrive in the UK / just before they are imported into the UK.
Found this video very informative indeed. Thank you
Hi Luca. Great video. I'm still a little confused however. I just ordered my first shipment which was my supplier did through UPS. It made it through customs and has been selling for a month on AMazon so I believe that UPS paid the customs and VAT on my behalf. The UK gov people I spoke to on the phone said that unless I used Royal Mail or Parcel Force that I would always have to pay this kind of extra commision to the company. What I'm wondering is where your process in this video comes in? I have my commodity code but I don't understand when and how I'm meant to use it. Is there a particular form I should fill in and if so to whom should I send it to? Also, should I ask my supplier to use Royal Mail or Parcel Force? Not too sure if they go from China. I'm basically very confused and while I would like to use your process above I'm missing the steps to do it. Any help would be really appreciated. Many thanks, Seb
Hey, so it's not really a process that you need to do, this video is just to help breakdown and explain import fees. Normally either your freight forwarder or courier will pay the import duties and VAT on your behalf and then invoice you some time later and as mentioned at the end of the video they will normally charge you a small fee for paying up front on your behalf. You may still receive an invoice from UPS, give it a few more weeks. Also RM and Parcelforce don't ship from China.
@@LucaDavenport Hi, if you order through ups, fedex etc. you do not need to fill any forms before or after the shipping as you do when ordering bigger qty's?? just wait for the invoice and pay? if you ship directly to amazon how will they know as to where to send that invoice? thanks!
If your shipping your goods via express air shipping using a courier such as TNT, DHL, UPS etc, you/your supplier will need to attach a commercial invoice to the shipment. This invoice will include information about your supplier, the goods being shipped and you as the importer. It should include your EORI number and this is how the import is connected to your company. Of course if you book the shipping with a freight forwarder they know to invoice you as you are the one who's booked the shipping.
I have just watched the video which was fantastic and made the whole process much clearer. Just one query, we are VAT registered so I presume that the VAT that we are charged on the good imported, we can then claim back at the end of our VAT quarter? This would then reduce the unit cost of each item. Regards
Glad it helped! Yes exactly, if you pay import duty at the time of import, you can claim this VAT back when you do your VAT returns. Alternatively you can join the governments new "PVA" (postponed VAT accounting) scheme, which means you won't have to pay the import VAT at the time. This option is better for cashflow. Give it a Google. Hope that helps!
can you tell please how to pay vat and duties?
Very informative, I'm assuming this is EXW purchases and not DDP, I normally purchase DDP but want to start claiming the VAT back rather than getting the supplier to pay the taxes.
Correct! This is for every other incoterm (EXW, FOB, etc...) that does not include duties & VAT in the price, like DDP does.
thank you, thats great, what documents do I need from my supplier and shipping company?
You need a commercial invoice from your supplier and a bill of lading from your shipping company
What if you buy at an online auction ? previously used product...
My forwarder will pay everything ddp to amazon so when i file VAT to hmrc can i claim back our VAT on import ?
Hello.
My name is Kripalsinh .
I am from India. I am a exporter of Indian products
I am searching buyers . Are importing good from India
Hey Luca just to confirm as a vat registered business you claim the vat you paid back right?
Yep, that's right!
Who should I contact to claim the VAT i paid back? Will they return the VAT to me. @@LucaDavenport
Hello, we have not registered for VAT as do not reached to the threshold. Alibaba will charge VAT on purchase. I am dealing a DDP shipment from the supplier to UK. Will I be paying VAT once again when goods will enter in UK?
The courier admin fees do my head in. I dont want my customers getting a surprise fee to pay, and it seems SO MUCH when only buying lesser priced items. I still dont have the hang of it all, but this part feels make or break for importing from the eu to the uk.
Is there somewhere i can get more info to understand this better?
Yep! The best place to find more info is on the Gov.Uk website or help articles on your couriers website.
Our company have rigistered in uk And we have vat and eori aswell
Hello.
My name is Kripalsinh .
I am from India. I am a exporter of Indian products
I am searching buyers . Are importing good from India
Thank you so much Luca, you nailed it, best explanation you can find in youtube
OMG Amazing Video. Thanks a lot for sharing this valuable information.
Do we still need to pay VAT on goods from China if we are not VAT registered in the UK? Our revenue has still not hit the 85k mark
Yes you do. Once you become VAT registered you don't have to, so you can claim it back.
Hi Luca, can we do alibaba tax exemption without vat register ? if yes please leave some information that will be appreciated thanks
How come I wasn't asked to pay any VAT or customs duty when I bought a belt on Amazon, which was delivered from China in 2016, or was it because it was prior to Brexit, or has it got to do with the price of the item? Thanks you for shedding a bit of light on this, as I want to order an item again on Amazon sent from China.
Hey, like you said that was several years ago and since Brexit things have no changed. If you were to buy a belt from China now, you will likely be charged VAT and import duties by Amazon at checkout.
@@LucaDavenport Thanks a lot, mate. Will let you know how it goes.
@@LucaDavenport You're right, Amazon charges them at checkout. Thanks Brexit and all the fuckers who voted for it, Boris - the embarrassing buffoon - in the first place.
Very easy to understand! Thanks Luca
Hi Luca, your video is really helpful. I registered the Vat when I set up the limited company, but I have not sell anything so far. Can I degregister for the VAT?
Yep, you can deregister for VAT as long as your turnover is below the £85K threshold
U dont even need to VAT register even if ur an ltd business only if ur buisness makes more then 85k a year
How do you determine the insurance value?
I'm curious if you still have to pay VAT if you don't plan to sell on your items?
Yep you do. If you are VAT registered and you sell them, you can then claim the VAT back but if you are just an individual buying personal products from abroad, yes you have to pay import VAT and can't claim it back
@@LucaDavenport ah, thanks for telling me
Hi ordered a watch from aliexpress and I am an international student in UK and I don't have a vat number and etc. I heard that I have to pay a tax and etc can you help ?
I have paid for a tester on alibaba do u get charged for this already paid VAT on check out am I expecting anything else to pay ? Even thow it was a low cost tester Item
Quick question please, do I need to do this if I have a freight forwarder and they are offering DDP service? Or I need to regardless.
DDP shipping will normally include import VAT & Duties in the shipping price, however it's always best to double check with your freight forwarder.
does DDP not cover these costs?
Yep, if you ship DDP but most professional businesses do not purchase / ship on DDP terms. Instead they will purchase on EXW or FOB terms and use their own freight forwarders.
Useful video. If I have paid for a DDP price leaving my supplier to arrange door to door delivery. Will I need to pay VAT separately?
Hey so technically DDP means Delivered Duties Paid, so import VAT may still need to be paid but the import duties should be included in the price. That said, when suppliers say DDP, they sometimes mean the price includes import duties & VAT, so I would check with your supplier to see whats included
i am beging u my shipping is ddp shipping so do i need to still pay tax and vat
DDP stands for Delivered Duties Paid, however normally also covers the cost of import VAT as well so you shouldn't normally have to pay either of these yourself if you have agreed DDP terms
Hiya! Brilliant video, but! I went to the HMRC, found my commodity code but there was no % next to it! Is it because HMRC have updated or is it because I'm looking on mobile? Thanks in advance!
Thanks! If you're on mobile , make sure you click on the coloured numbers and go onto the commodity code page. You shiuld see it there!
If i choice the items to be shipped DDP still i have to pay something in uk? Thank you 😊
I am looking for the answer of this question
thus was an awesome video, thanks so much.
Thank you for the video. For discounted/sales items, please let me know if import VAT is paid at the price that we actually pay or full price?
Its based on the price you paid for the item
@@LucaDavenport Thank you :)
Excellent Video. Question) We are US Seller trying to grow in UK. Would you recommend any specific company which has low hidden fee (administrative fee)? or Can hidden fee be waived if the seller are VAT registered or Duties are somehow pre arranged?
Hey, glad you enjoyed the video! The only way to avoid those hidden 'admin fees' is to create a 'deferment account' with HMRC.
@@LucaDavenport Thank for your input. Not interested in deferment account.
Would you recommend a company which charge reasonable fee and provide good service?
My pleasure. Woodland group, Unity logistics & westbound global all provide competitive shipping rates and don't have high admin fees.
Your information is really useful,thank you so much
What about those who are not VAT registered at the moment?
If you are not VAT registered you need to pay both import duties and import VAT. If you are VAT registered, you can claim the import VAT back from HMRC.
Right now, I don't see any EORI number requested, or any store charging VAT. If the EORI number does not matter, then why would I use it then? (especially if i can use the EORI number of my fulfillment center).
Also, the chances that the HMRC is going to chase a Dutch company that is selling to the UK, is very little. I don't see how any import can be tracked by to my company. Is it needed to put a company name on the package? A url? A name of store? The bank account that paid for a particular order? (I don't believe a fulfillment center in China would have it that well documented).
I am sure enough that most people in the industry would take the chance. Since no store charges VAT. This really puts me in a disadvantage.
Can an import be tracked back to the point of sale at all times?
Hi Luca. Incredibly helpful video, thank you so much. I have a quick question... you mentioned the manufacturer/supplier in China not charging VAT, but for all of my samples I paid VAT, and for my bulk order soon, I am being quoted with VAT? Only way not to pay VAT through Alibaba is if I am VAT registered. I shouldn't have to pay VAT to supplier and also import VAT and duties should I? Thanks again, Josh
No worries, glad it was helpful! So things have changed quite a bit since I filmed that video. The UK government now forces companies like Alibaba to charge VAT at checkout and pass it on to HMRC. If you pay VAT at checkout, you shouldn't then also be charged the same import VAT again at customs, however if you do you can provide proof to HMRC and they will refund you for one of the payments.
@@LucaDavenport This video was amazing. But can you do an updated version since the changes on Alibaba? There appears to be a lack of info on this, which is quite huge that there is now the 20% VAT to pay at point of sale.
@@LucaDavenport please do an updated version thank you ❤
Many thanks! You are great! Really good explained point by point. Much LoVe! 👌
Would this all be predetermined/calculated before you commit to the manufacturing of your product? Then you’d recalculate your profitability per unit to see if it’s still viable?
Yep exactly! You need to get some rough shipping quotes in and work out what your import duties and VAT will be before negotiating on price with your supplier and committing to manufacturing.
Random question - say I've imported my goods to the UK from China and paid the import VAT and duties. What happens then if I import those goods from myself to Amazon in Germany - what value do I declare the goods have when importing to the EU?
You would need both a UK and EU EORI number and you would essentially be exporting the goods from the UK to the EU but you would retain ownership, therefore on the export/import declaration you would need to state that no import VAT or Duties is due as the products have not been sold. I would recommend working with a freight forwarder who can do this all for you.
Really helpful Luca thank you!
Very informative video thanks!! Can anyone confirm if DDP Shipping the manufacturer will pay customs & VAT?
That is correct
What happens when you buy from E-Bay who charge vat at point of sale ? does as has suggested in the media customs charge VAT over and above that already collected by the seller in this case E-Bay?
If you are based in the UK and are VAT registered, then you are responsible for collecting VAT on Ebay sales. If you are based outside of the UK, then Ebay will collect VAT on your behalf
hello, I bought an order from China 2 months ago but I still haven’t received a VAT invoice from my freight forwarder etc, should i be worried?
Thanks for beautifully explained
I’m importing shoes from the US to the UK and the shoes r valued at £850 (7 pairs) how much would the import tax roughly cost
Very roughly £250 based on the assumption the duties are around 10% and the shipping fee is included in that £850 value.
Great video, thanks! Luca, about the VAT if I am importing from China do I need to pay it even if I am not VAT registered?
Hey Tom, glad it was helpful! If you’re not VAT registered then you will need to pay import VAT. If your company is VAT registered then you can claim that VAT back. I’ve got a video that explains this all in more detail here: th-cam.com/video/xpnz-hUlJvA/w-d-xo.html
@@LucaDavenport Great, thanks!
Thank you this was big help, may I ask what is the fastest shipping method you recommend when it comes to shipping from China to UK?? Thanks
Hey, express air shipping is the quickest but is very expensive at the moment due to the pandemic!
Great video! Do I still have to pay VAT if I am a individual seller buying from China or is it only limited companies who pay? Thanks.
Cheers! No I'm afraid everyone has to pay import VAT
This was super useful. I’m trying to buy something on ebay that’s roughly £35. When I go on the government website, they state that non-excise items less than £135 will not have any custom duties? Does this mean my item will have no tax added on it?
Hey, if the item is under £135 then you will not need to pay import duties, however will still need to pay VAT. Instead of import VAT, this VAT should be charged by eBay at checkout.
@@LucaDavenport is this rule of not paying custom duties if under £135 applicable to all countries? The books I’m trying to get are from Japan?
Yep
Can I use this rule if I order goods under 135£ but I am going to sell them on UK eBay? What if I make this low value order a few times during a year.
What if I have a uk ltd company and not VAT registered My supplier send goods ddp. Should I pay VAT or apply eori? Really need help..
Yep you should always ask for your supplier/freight forwarder to use your company details and EORI number on the commercial invoice for customs purposes, however if shipping DDP they will be covering the duties and most likely VAT. That said I would recommend avoiding DDP as there are a lot of dodgy tactics used by Chinese suppliers to reduce their import duties and vat costs such as undervaluing the goods etc. I would recommend purchasing on EXW or FOB terms and using your own freight forwarder to be 100% safe.
I am going to courier my personal PC from USA to UK...AND IT LOOKS LIKE IM GOING TO HAVE TO PAY DUTIES!?!?!?!
i should have paid extra luggage costs but was worried about it being chucked around by bagage handlers!!! Is their anyway i can just have it fedex/UPS/USPC to me with no duties?!?!?!
It's crazy. Any help? Please?!
I am wanting to place an order of allibaba and in the shipping terms are DAP Express. And the agent in china is telling me they will ship directly to my door and all duty + vat is included. Is this correct ?
No that is not normally the case. Both will deliver the goods to your door / final destination. DDP means the seller will cover all import duties and taxes. DAP means you(buyer) are responsible for paying the import duties and taxes
I am importing parcel from india . How do i pay for customs and vat . Do i need to pay before the item arrives or after please help.
Hey, your courier / freight forwarder will likely pay on your behalf and then invoice you after delivery.
Still a little confused. It's my first time importing goods.
Am I required to pay 20 percent VAT on goods value, or goods value plus shipping plus insurance?
I was under the impression it was just the goods value.
Also do I prove value of goods through commercial invoice and separate invoice for shipping?
So you're required to pay 20% VAT on the total value of the goods which is (Value of goods + Shipping + insurance). HMRC will work this out using the commercial invoice and shipping invoice (Bill of lading / BOL).
@@LucaDavenport Many thanks. One last thing. Are they any recent changes to suggest VAT is paid at alibaba platform or is it still usually paid once it arrives at UK port?
Will HMRC rely on just above documents or any further information?
Define the concept customs duties
very informative and well explained
Hello I just ordered goods from China and the delivery service provided is DDU. My item is going to be shipped next week. When should I pay VAT and customs? When it arrives or when they ship it ? Thanks. I have my supplier my Uk EORI number too. Hopefully you can reply back.
Hey, it will depend on what shipping / incoterms you have agreed to. Has your freight forwarder / shipping company not advised you on when the VAT & Duties need to be paid?
Are the goods held awaiting payment at a depot or do they just turn up and then you receive an invoice?
In most cases the freight company will pay the VAT & Duties on your behalf to get the goods through customs and then you will receive an invoice at a later date
Hi,
I'm making bids for an item located in Belfast on eBay. Before I proceed I would appreciate if you could let me know whether I'll have to pay VAT and/or customs duty. I live in England. Cheers.
Nope you shouldn't have to as Belfast is in the UK
@@LucaDavenport Thank you for your prompt reply. The special arrangements for Northern Ireland after the damn Brexit was voted for were confusing me.
Alibaba is also charging me VAT. So I'm paying import VAT (via DDP) and also VAT to alibaba. I'm not VAT registered so i can't claim these back. Is there a way to avoid paying VAT to alibaba?
Nope, not unless you are VAT registered. But that is why I wouldn’t recommend using DDP. Instead use your own freight forwarder and they will be able to avoid you paying import VAT if you have already paid VAT on Alibaba.
Excellent information, thank you
Hi if I want to import from China to UK for online business . Do I Need import licence
No you don't need a license, you just need an EORI number which is free and easy to apply for online
After you find the vat for the total cost for the product you importing , then you mark up the cost by let’s say 30% to get your profit then do you have to add 20% to the selling price and then you get the final selling price ? Or do you just add VAT for the cost of the products like you explained and then mark up cost by 30% and that’s the final selling price ?
That will depend on whether you are VAT registered or not. If you are not VAT registered you will need to pay import VAT (input VAT) but you will not need to charge VAT on your sales (output VAT). Therefore you just need to work out your markup based on total landed cost of goods sold (which includes import VAT). No need to worry about adding 20% on top.
@@LucaDavenport but if the company is VAT registered,? So in my senario I am creating a spreadsheet for a company that imports cheese , I have the base cost based on exchange rate from euro to pounds and then from that I have to mark up the cost by 40% for my profit and times the average units sold per month , I’ve been told to add VAT in this scenario and I can’t get my head around it
If your company is VAT registered then you don't pay import VAT (input VAT) but will need to charge VAT on your sales (output VAT). If your business is VAT registered, you need to work out all profit margins on ex VAT prices. You might find this video helpful: th-cam.com/video/xpnz-hUlJvA/w-d-xo.html
@@LucaDavenport so it’s the VAT applied to the cost price + mark up which is selling price in my scenario or do I apply VAT on cost price and then markup the result to get my selling price
Hello, please what does it mean when trade tariff commodity code says 0.00%?
That means that no import duties are charged on that product when importing into the UK, which is great! You will still have to pay import VAT though, unless VAT is also 0%.
Oh great, please how do I find VAT for a product that’s 0.00%?
Thank you for your response
you explained this too well thanks!
Hello I have a question I ordered something off DHgate for a total of £41 and it’s coming from China would I have to pay import tax
Yep import VAT and Duties!
@@LucaDavenport thank you
Is there any other option available for VAT 7.5%?
Is this a good idea if I ask my supplier for DDP?
The 7.5% Flat Rate Scheme (FRS) is a type of VAT registration and applies to 'Output VAT' (the VAT charged on sales) not input VAT, such as import VAT. If you are not VAT registered, you will need to pay 20% import VAT.
So the VAT the government gets will be a lot higher when you become VAT registered versus paying during the import process, 20% on every unit means you'll need to readjust your profit margins
Yep, once you are VAT registered you will likely end up paying more VAT to the government and your profit per unit will go down slightly so it's important to plan for that.
@@LucaDavenport is it possible to be Ltd company and not pay vat?
Hi, what if I am importing two pallets of “samples” to introduce it to wholesalers. In this case do I still have to pay customs duty? Manufacturer is going to send it at no cost! I am only responsible for shipping and they arrive from an EU country into the UK. Do I have to provide an EORI number? Thank you in advance :)
That is quite a unique situation, so I'm not 100% sure I'm afraid! You do not need to pay import duties/VAT on 'commercial samples', however this normally relates to samples that factory send your company to try and win the business. It all depends on whether what you described still counts as a 'commercial sample'. I would speak with HMRC for clarity.
So when the duties are worked out by yourself is this just for piece of mind? Do customs work it out for themselves or do you tell them yourself what you owe?
Also with EORI number and commodity code will the seller from alibaba automatically put this on the shipping label for you or is it your job to do the label?
I'm confused if you buy something on alibaba and they ship it to you why you use a freight forwarding company? Is the shipping something you should organise yourself?
HMRC will work it all out for you but it's important to know how to do the maths so you can accurately do profit calculations beforehand. The seller should create a 'commercial invoice' for you and you should request that they add your EORI number onto that invoice. If you're just shipping one of two units or sample, then it's fine to get the sellers to ship it to you. If you're shipping large quantities, it's always better to use your own freight forwarder so that you have more control and a UK point of contact. There are a lot of things that can go wrong during shipping and the more control and visibility you have, the better.
@@LucaDavenport thanks man I really appreciate your response, I recently had a pay cut so I'm looking for some added earnings, I was struggling with the info I was getting elsewhere so thanks a lot for your time this is a big help for me
Is there a way to reduce import tax when sending small items to countries outside the UK (german, Latvia ect). I don't seem to need to pay any import tax when shipping to the US? Does anyone know why this is?
Hi Lucas, What happens if you are importing from China DDP and they are covering all costs, What happens when I sell my product in the UK how do I then claim my Vat back as this would mean Vat is being charged twice?
Hey Leon, if you're business is VAT registered you don't want to let your supplier ship your products DDP as they will usually use their own business or a partner business as the UK importer on paper. This means your business won't be the business paying the import VAT, you won't receive a C79 and won't be able to claim back the import VAT.
Do we need an EORI number to import goods into the UK?
Yep, you will need a UK EORI number to import goods into the UK. It's free and easy to apply!
@@LucaDavenport Yes! i've just applied for it and i got it straightaway, Thank you so much!
useful information .. Thank you so much
Hi this was very interesting, thank you. I have a question though. I am not a business or commercial Importer, I am buying a poster from a private seller within the United States, to be sent by courier to myself, here in the UK. The value of the poster is £250. Does everything in this video still apply to me? Grateful for your advice ✌️
Hey, glad you found the video helpful. Yep, everything in the video will apply to your order. You can find more info here: www.gov.uk/goods-sent-from-abroad/tax-and-duty
You are a star ! Thank you
I want to buy a $100 product from alibaba but shipping term is DAP and suppliers are say I might need to pay custom tax. Do I really need to ?
Hey, there used to be a £135 threshold, however since Brexit happened that has now been removed so you may need to pay import VAT and import duties on the product even if it is only $100