The United Kingdom is a the leading market for Canadian companies. Trade to the UK is made stronger by the UK -Canada Trade Continuity Act. Yet, free trade to the UK often does eliminate import fees. All consignments to the UK are subject to duty, value add tax and other import fees.
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Consignments with a value over £135 (around $200 CAD) can import duty free.
All imports to the UK, regardless of value, are subject to the British value add tax.
Carriers charge a fee when payment of duty and VAT is necessary. The fee is commonly around 2.5% of the amount paid the UK Customs with a minimum fee.
If your goods meet to the "rules of origin" under the the terms of the CUKTCA, they can benefit from preferential duty free import. The rules of origin can be complex but fundamentally the goods have be be made in Canada. Simply ship from Canada does not qualify the goods as being of Canadian origin.
This Guide Provides a Complete Understanding of UK Import Fees
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Additional Useful information: Secure your shipping to the UK
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Import fees to the UK refer to the duties and taxes apply on goods that import into the country. These fees regulate trade and protect domestic industries. They typically are on the value of the goods.
There are several types of import fees that may be applicable to UK imports:
It's important to note that the specific import fees that apply to a particular shipment will depend on the type of goods, the country they are coming from (Read more: Certificate of Origin), and other factors. It is import to confirm compliance and likely import fees with the consignee/ importer prior to shipping.
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UK customs uses the following elements to calculate import fees: Assessment Value ,Commodity/ HS Code and Country of Origin. The final imports fees often also include a carrier disbursement fee. See below.
Example: Calculating UK Import fees £2000 import subject to a 9% duty
Example: Calculating UK Import fees for a consignment £2000 benefiting from preferential duty free import via UK TCA
While the list of potential import charges can seem exhaustive, the most common items companies should consider when shipping to the UK include duty, VAT,import processing or carrier disbursement fees.
Read More: Understanding import duty
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The basis of most modern free trade agreements is the duty free import of goods made or obtain in whole from a specific country. Simply shipping from Canada does not automatically grant preferential duty free import. The goods have be made in Canada.
For example, goods sold from a Canadian online site that were made elsewhere are Canadian origin for purposes UK import.
Useful information regarding the difference between shipping from Canada versus Canadian origin goods.
Valuation is a key data point that UK customs looks at closely. Valuation can be complex but for most imports it is simply the transaction value. For example, if the goods were sold online for CA$100, the declaration value should be CA$100. The H.M.Customs converts currency to UK Pounds as a first step. H.M. Customs follows the prevailing currency market exchange rates.
Useful information on ensuring the correct value.
To more accurately determine the potential duty rate, it is helpful to obtain the harmonize code (HS Code). If not known, a specific product description can assist in making the correct classification. Verifying and finding the correct HS Code.
The Canada UK TCA (CUKTCA) do not require a separate certificate of origin. A list of necessary data elements in necessary but not in a specific format. An origin declaration can be part of the commercial invoice. To ensure goods enter correctly, it can be helpful to include both a separate certification of origin as well as a statement on the invoice.
See sample form to declaration of origin (Fillable PDF to download)
Value add tax , VAT, is often the biggest import costs as it applies to all consignments to the UK. Businesses often can claim back the VAT but final consumers are subject to the cost. For online sellers, it is necessary that the VAT be paid upfront at time of checkout.
Useful information for online retailers regarding VAT requirements to the UK
The vast majority of imports to the UK arrive via couriers including FedEx, UPS and DHL. To facilitate the clearance process, carriers often pay duty and taxes on behalf of the consignee. To account for this cost of prepayment, they add a fee. This “disbursement fee” and averages 2.5% of the total import fees. The minimum fee is between £12 and £17.
When choosing a shipping method, important factors include the size and weight of your freight. Necessary transit time, nature of the goods are also important.
Reminder: Always confirm compliance prior to shipping.