Today’s article is about something quite simple, but still hugely important – import duty and VAT on goods bought from outside the EU.
I receive countless emails every week from people asking me about import taxes; how much they are, when do they apply, how to calculate them etc.
And although once you start importing it becomes second nature and incredibly simple, it is something that can be off-putting initially and as a result; some people continue ordering from local wholesalers at much higher prices than they could get importing directly from places like China or the US.
So today I’m going to go over import taxes and give you a guide to use when importing goods to the UK from outside the EU.
First things first; what taxes do you have to pay on imported goods?
In general, you need to pay VAT (Value Added Tax) and import duty.
VAT is a set amount (currently 20%) whereas import duty varies depending on the type of product, with many being duty-free.
Import duty is calculated as a percentage of the customs value of the goods you are importing, which means:
- The price paid for the goods.
- The shipping cost.
- The insurance cost.
As mentioned above, the duty rate depends on the product type and many are actually duty free. I won’t list them all here but some popular duty free products include:
- Computer Software
- Desktop PCs
- Mobile Phones
- Video Game Consoles
So as you can see, a number of products actually have a ‘nil’ rate of duty, even when imported from outside the EU. [Read more...]