12% of the imports to the UK come from China, making it the UK’s third largest import partner. As the world’s largest exporter, China is a source of a vast range of goods that we all take for granted, from children’s toys to solar panels and everything in between. Much of UK trade requires the smooth movement of goods from China into the country.
If you’re looking to import goods from China you may be wondering how easy and cost-effective it is. What paperwork is involved and what extra costs will you incur over and above the costs of transporting the goods?
Here we’ll outline what’s required to import goods from China and how an international forwarding company can make the process easier.
Is it difficult to import from China?
China has an unrivalled ability to manufacture large quantities of consumer and industrial goods cheaply and quickly. It is the world’s largest supplier of computers and electrical items, furniture and household items, construction materials, clothing and footwear, toys, medical equipment and vehicles.
To facilitate this huge export economy, nine of the world’s top ten container ports are in China and the Far East. Shanghai is the world’s largest container port, handling over 37 million TEUs (twenty-foot equivalent units) every year. What’s more, despite global economic challenges, the port and the region continue to grow.
The Chinese economy is geared towards exports and the UK economy relies on them. For this reason, importing goods from China needs to be as trouble-free as possible. Although there is a range of challenges for any would-be importer, especially since Brexit, with the right advice and assistance, the import process can be relatively smooth.
The key to successful importing from China is to ensure that you have the right paperwork in place. To facilitate this, most companies that import from China will work with an international forwarding company.
Do I need a licence to import from China to the UK?
Some goods imported from China will require a licence because they are subject to import controls. These are designed to regulate certain markets and restrict the supply of dangerous, rare or other goods into the country. There are currently three types of controls:
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- Bans – banned goods are not allowed to be imported at all.
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- Quotas – the volume of goods that can be imported into the UK is restricted.
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- Surveillance – the import of goods is monitored with licences.
If the goods you want to import fall into the surveillance category, then you will need to obtain a licence prior to importing them into the country. Some of the types of goods that commonly need a licence in order to be imported into the UK are:
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- animals and animal products
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- plants and plant products
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- high-risk food
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- veterinary medicines
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- human medicine
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- controlled drugs
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- tissues and cells for human application
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- waste
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- products containing F gas
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- precursor chemicals
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- hazardous chemicals
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- nuclear material
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- guns, knives, swords and other weapons
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- weapons and goods that could be used for torture or capital punishment
You can find out more about licensing and how to get one from the Department of International Trade.
Some of the goods that are currently prohibited from being imported from China include:
● Animal skins / Furs
● Asbestos
● Biological substances Category B, UN3373
● Firearms, or parts of
● Ivory
● Military equipment
● Precious metals & stones
It’s the responsibility of the importer to ensure that they have the necessary licensing in place and that they understand the particular requirements for the goods that they are importing.
An international forwarding company can advise about the current regulations. At SSOIF, we provide a comprehensive import service to help take the complexities out of the importing process.
How much does it cost to import from China to the UK?
There are two principal means by which you can ship goods from China to the UK for importation. Sea freight and air freight both have advantages and disadvantages and give importers a range of options. The best choice for you will reflect the type of goods you are importing, their size, weight and value, as well as the speed with which they are required.
Sea Freight from China
Sea freight is the most common way to ship goods internationally, with vast amounts of products being transported across the planet by carrier ships on a daily basis. The goods are packed into containers before being loaded onto a vessel and beginning their journey. Sea freight rates from China can vary over time, and the Chinese port from which you are shipping your goods will also have an impact on the overall cost.
There are two ways in which you can ship goods via sea freight from anywhere including China – FCL and LCL.
FCL
FCL stands for Full Container Load and is usually used when you have larger quantities of goods. One or more containers are purchased for your sole use to send on a ship. It can be more cost-effective if your goods are likely to fill up at least three-quarters of the available space in a container. Another advantage is that it reduces the amount of handling that your goods will have during the shipping process.
LCL
LCL stands for Less Than Container Load. This is a shipping method where goods from different companies share the same container. This method is usually used when a particular shipment isn’t large enough to fill a container on its own. This shipping method is for importers who import smaller quantities of goods. While this can be cheaper than hiring an entire container, the cost per cubic metre is usually higher than FCL. Once the container reaches the destination, the container’s contents are divided and then continue on with their journey.
Air freight from China
Air freight is when goods are loaded onto a plane and then transported to their destination. This is considerably faster than sea freight but also more expensive. As a result, it tends to be used when goods are required quickly or are of high value. For smaller items of higher value, this can be a cost-effective means of getting goods to their destination.
Another aspect in favour of air freight is that goods can, in theory, be transported from one airport to another. This means that you have a much broader range of options when it comes to shipping your goods, both in terms of where they begin their journey from China and where they arrive in the UK. This can be important if you require your goods quickly.
At SSOIF, we provide comprehensive sea freight and air freight import services. We can help you make the right choice for shipping your goods from China and then take care of the logistics.
How much tax will I pay if I import from China?
If you are importing from China to the UK, you’ll usually need to pay both duty and VAT depending on your goods and the commodity code. The system can be complex, particularly if you’re encountering it for the first time, which is why many importers will opt to use the services of a freight forwarding company. They will help calculate the costs of importing as well as provide a range of other services to facilitate the smooth importation of your goods.
It is the Importers responsibility to obtain the correct commodity code for their products. They can find help from HMRC by emailing their dedicated address: classification.enquiries@hmrc.gov.uk with all information relating to the product. HMRC will then provide non-legally binding advice on classifying your goods.
You will be asked to confirm the commodity code for your goods when they are declared to customs. This will be used to calculate the amount of duty that you will need to pay. The amount of duty can vary considerably. Duty levels are also liable to change.
Your goods will then be held by customs until the duty and VAT have been paid in full. Once this has been paid, either by yourself or a freight forwarder, then they will be released.
How much is the customs tax from China to the UK?
All importers are required to pay UK Duty and VAT unless the goods are eligible for duty-free. In practice, this means that should you pay your supplier £5,000 for the goods and £500 for the shipping and the UK duty rating is 3.5%, then you will pay a duty of 3.5% of £5,000 which is £175.
VAT, on the other hand, is worked out on the basis of the value of the goods and the shipping cost. Currently, UK VAT is 20%, which means that in the example given above, you would pay 20% of £5,500 which is £1,100.
The total customs tax (Duty and VAT) on the example given below would be £1,275. The total cost of sourcing and importing the goods from China to the UK would be £6,275.
It’s important to understand how the customs tax will impact the profitability of importing your goods.
Do I have to pay VAT on imported goods from China?
Any goods imported from China will be subject to UK VAT which is currently set at 20%. What this means in practice is that not only will you be required to pay 20% on the value of your goods, but that will also be applied to your shipping costs.
This means that if your goods cost £3,000 and your shipping costs £400, you will pay VAT at the rate of 20% of £3,400, or £680.
This is in addition to any customs duties that you are required to pay. Your goods will be held by customs until the duty and VAT have been paid in full.
Another way of paying VAT is by declaring the VAT on PVA (Postponed VAT Accounting). This means the VAT is declared but is never physically paid.
How an international forwarding company can help
China has a huge source of goods available for import to the UK. It provides businesses with significant opportunities to purchase competitive goods for profitable resale in the UK.
Many companies consider importing goods from the UK but are put off by the amount of paperwork required or are confused about what it might involve. Smaller companies can find the import process onerous and time-consuming, taking them away from the core aspects of their business.
This is where an international forwarding company can help. They can negotiate cost-effective shipping on your behalf, and then take care of the customs process once your goods have arrived in the UK. They can ensure that all of the necessary paperwork has been taken care of and any fees have been paid in full.
Import services from SSO International Forwarding make it easy to import goods into the UK. We take the hassle out of importing all kinds of products for use or resale in the UK markets, simplifying the customs process and helping your business to grow.
We can handle the entire process, from finding the right method of international shipping for your goods to negotiating customs, collecting and delivering cargo from all major UK ports to destinations throughout the UK, and providing storage facilities at our headquarters near St Helens. We act as your partner in the whole process providing a single point of contact from collection to delivery.
Contact us today to find out more.
