The UK has long trading links with the US. It has always been a significant trading partner for the UK, and, depending on a deal, this is expected to grow following Brexit. A trade deal between the UK and the US is widely seen as desirable, helping to lower barriers to trade and support more economic activity between the two countries.
U.S. exports of goods and services to the UK reached $129.3 billion in 2021, up 7.6 per cent from 2020, ranking the UK in seventh place among export destinations for American goods and placing it in the number one spot for trading in services.
If you’re looking to import goods from the US for use or resale in the UK, what taxes might you need to pay and how are they calculated?
Is there an import tax from the UK to the US?
The UK does not currently have a trade deal in place to manage trade between the US and the UK, as it does with other countries around the world, including neighbouring Canada. While there is some desire to negotiate a deal on both sides, any agreement is unlikely in the immediate future. This means that UK businesses and consumers who import goods from the US will need to pay import taxes.
The number of duties and taxes that will be payable on your goods will depend on their commodity codes, the overall purchase price and the shipping value. Because the US has no tariff preferences with the UK, custom duties will be applied to all goods with a value of over £135.
Items will not clear UK customs until all duties and taxes have been paid in full. To ensure the quick delivery of goods to your customers it’s important to ensure any duties are calculated and paid.
To reduce the risk of complications and delays, most importers will choose to work with an international freight forwarding company that provides a comprehensive import service. They will be experienced in handling the technical and paperwork aspects of the importing process. They will also ensure that your goods are paid for on time and that they are freed up for delivery to their final UK destination.
Do you pay import tax on US goods?
If the value of the goods you are importing has a value over £135 and is not a gift, then you will be required to pay import taxes on any goods that you import.
The level of this duty will depend on the type of goods you are importing as well as the overall value of any goods.
The importation process, as well as the duties that may be applied, can be confusing and difficult to negotiate. As a result, most businesses that choose to import goods, either on a one-off or regular basis, may choose to work with an international freight forwarding company.
How much is the import tax from the USA to the UK?
Customs duty is assessed on the market value of the imported goods at the time they arrive in the UK. The import price for products that enter the UK is made up of a number of different components. This will usually include cost, insurance, freight and duty. A standard VAT of 20% is levied on the aggregate value of all these components.
VAT is reduced on some goods and services to 5%. This includes home energy and children’s car seats. In some instances, VAT is reduced to 0% for certain goods such as children’s clothing and food.
Any goods under the value of £135 will not be subject to import taxes. Any gifts with a value of £135 to £630 will be subject to import tax levied at 2.5%. Gifts above £630 and any other goods above £135 will have an import tax rate that depends on the type and value of the goods being imported. The exact percentage that any importer will pay is dependent on the commodity code. This can be checked on the government’s Trade Tariff website.
The responsibility for meeting these customs obligations at import falls on the importer of record. Incoterms – international commercial terms used for the cross-border movement of goods – establish the obligations of the seller and the buyer, including which party is responsible for import.
The commercial invoice value will usually be accepted as the normal price. This may not be the case if a preferential arrangement has been established between the US supplier and importer, or if an unrealistic value has been declared.
The duty becomes due at the time that the goods are imported. Established importers may be able to defer payment for an average of 30 days.
How SSO International Forwarding can help
SSO International Forwarding provides a comprehensive range of import services to help you negotiate customs and successfully trade across borders. We take the complexities out of the process, allowing you to concentrate on your core business.
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 make sure that you comply with HMRC guidelines and that any duties are paid. We take care of all of the necessary documentation and eliminate the risk of delays arising.
To find out more about the comprehensive import services from SSO International Forwarding, contact us today or call +44 01744 410178 or email sales@ssoif.co.uk
