What are importing and exporting?
In business, importing is the practice of bringing goods or services from one country into a second country to sell in that second country. For example, if goods made in the USA are shipped to the UK and sold in the UK, they’ve been imported into the UK. Conversely, exporting is the process of transferring such goods out of a country. In the USA to UK example above, the goods have been exported from the USA. To import goods into or export goods out of the UK, a business must abide by certain legal rules.
When dealing with UK exports and imports with connections to the European Union (EU), it’s important to know that, since Brexit, different, often complex rules have applied to imports and exports to, from, or via Northern Ireland. For more information on the Northern Irish rules, read the government’s guidance on moving goods in and out of Northern Ireland.
How can a business import goods?
A business can import goods by purchasing the goods from a business abroad and having them transported into the UK. The business purchasing the goods is generally considered to be the importer regardless of which business (ie the buyer or the seller) organises and pays for (or carries out) the actual international transport.
The business purchasing the goods is usually responsible for completing the import paperwork and meeting other requirements relevant to the import. Exactly what’s required depends on the nature of the import. Moreover, businesses can choose to have somebody else deal with most of the import process on their behalf. It’s quite common to engage a customs agent or similar to submit customs declarations and facilitate payment of various duties.
As an outline, the import process usually includes the following:
Making sure your exporter is ready
The rules applicable to an export (eg which declarations must be signed and which duties must be paid) depend on the country from which the goods are being exported. To ensure a compliant import process, an importer should liaise with their exporter to make sure they’ve done everything they need to from their end (eg by obtaining any necessary export licences or making any necessary export declarations).
Obtaining an EORI number
To import goods into Great Britain, you must generally have an Economic Operators Registration and Identification (EORI) number. Your number should start with ‘GB’. An EORI number is a unique identification number that a business holds, which helps customs authorities to track and monitor its import shipments. The number is required to enable the business to, for example, make customs declarations.
You can apply for an EORI number online. You’ll need certain information about your business, which will differ depending on your business type. For example, you may need your Unique Taxpayer Reference (UTR), VAT number, and/or National Insurance number).
Getting information ready for your import declaration
You’ll generally need to establish:
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what the relevant commodity code is - ie a reference number that is internationally recognised as describing a particular type of product. You can find your commodity code online
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the value of your goods
Working out which customs duty you must pay
The rate at which you must pay customs duty depends on factors like:
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the country that your goods are coming from - eg duties are generally less for goods coming from countries with which the UK has a trade agreement
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what goods you’re importing what you’ll do with them
Checking the marking, labelling, and marketing rules
Certain types of goods need to abide by specific laws to be legally sold in the UK. For example:
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marketing standards for particular types of food
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the requirement to hold a correct conformity marking (ie the UKCA marking or the CE marking), which demonstrates conformity with certain legal requirements (eg ecodesign rules or product safety rules)
If any such rules are applicable to your goods, you should make sure your goods comply before they’re imported and then sold within the UK.
Obtaining any necessary licences, certificates, or registrations
Certain categories of goods are held to pose more risks to the UK’s safety, health, environment, or similar. If you’re importing any of these, you may need to obtain specific licences, certificates, or registrations before you can import them. For example, for certain medicines, fresh produce or seafood, or weapons. For details of which products are included, see the government’s guidance on importing. It’s quite common for this step of the import process to be managed by a customs agent or similar.
Getting the goods through customs
The key step of the process - getting goods through customs - is often managed by a customs agent or similar. At this stage:
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an inspection should be arranged and carried out for certain goods (eg plant or animal products)
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the import declaration should be submitted - this often needs to happen before the goods are placed onto their means of transport into the UK
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customs duty and import VAT must be paid - once your declaration is submitted, HMRC will let you know how much must be paid and when
If too much customs duty or VAT is paid, you may later be able to claim this back. It’s important that all records and documents (eg VAT certificates) are kept for this reason, and so that the importer can demonstrate compliance with import rules if necessary.
For more information on this process, read the government’s guidance on importing goods.
How can a business export goods?
The process to follow when exporting goods out of the UK (either those your business has made or those which it’s purchased from another business) involves similar steps to the import process.
As for importing, exactly what’s involved depends on the nature of the business, its goods, and the manner of transport involved (eg different processes apply to moving goods by post). A business may engage another party (eg a customs agent) to deal with much of the process for them.
In general, the export process includes:
Obtaining an EORI number
As for imports, a business must have an EORI number starting with ‘GB’ to export goods from England, Scotland, or Wales.
Obtaining any necessary licences
The export of certain products (eg dangerous or biologically complex products) from the UK requires the exporter to hold a certain specific licence or certificate. For example, the export of medical devices, firearms, or diamonds. A list of applicable types of goods is available on the government’s website.
Checking your arrangements at the other end
Before exporting:
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check which import/export duties are due, which declarations are necessary, and which other rules are applicable - this will largely depend on the country that you’re exporting to. You can use the government’s online export duties and customs procedures checker tool to do this. This tool will tell you:
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which duties must be paid (eg depending on whether the UK has a trade agreement in place with the country you’re exporting to)
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whether you need an EORI number and other documentation requirements for getting your goods out of the UK, and
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what needs to be done at the other end to get your goods through the destination country’s customs processes
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make sure that the business receiving the goods in the destination country has all necessary arrangements in place (eg any import declarations or licences)
Establishing your commodity codes
As for imports, you need to classify your goods using the correct commodity code. This will be used in various documentation.
Making sure all necessary documentation travels with your goods
You should ensure that copies of any necessary documentation (eg that are obtained following the steps above) are transported with your goods. For example, any licences and a completed invoice. Other documentation may be needed, such as proof of origin documents. Make sure you also include any documentation that your destination country requires.
Getting the goods out of the UK
This step is often largely managed by a customs agent or similar.
You’ll need to make an export declaration to get your goods across the border. You’ll need the reference number from this declaration at the UK border.
Make sure you keep a record of all invoices and paperwork, and ensure you include your export details in your VAT accounts.
For more information on this process, read the government’s guidance on exporting goods.
Are there different rules for importing from and exporting to the EU?
Following the UK’s EU exit, imports from and exports to EU countries have been broadly subject to the same rules as those from and to other countries. Some requirements may be lesser or may not apply to EU imports and exports, but the broad steps set out above are generally still applicable.
What is a freeport?
UK freeports (or ‘special economic zones’) are zones within UK borders that allow businesses within the zone to operate outside of usual UK laws and which offer customs and tax incentives to businesses active in these locations. These zones facilitate the import and storage of goods by reducing tax and regulatory procedures that might delay or impede trading activity.
There are roughly 3,500 freeports worldwide, mostly located in Asia. A UK new freeport initiative followed Brexit, and there are now various freeports operating throughout England, Scotland, and Wales (12, as of December 2023).
What are the advantages of freeports?
Freeports make use of tax reliefs, deregulation, and simplified customs procedures to facilitate trade into and out of the UK, giving the area surrounding the freeport an economic boost. Freeports additionally help to drive local economies by generating new employment opportunities and promoting local businesses.
Free trade zones are also a useful means of attracting foreign investment to the UK, as international businesses seek to benefit from the lack of customs duties and regulations applicable when transporting goods into and out of the freeports.
For more information, read the government’s guidance on UK freeports.
Importing or exporting goods to or from the UK can be a complex process that carries various legal risks. If your business is undertaking these processes, consider Asking a lawyer for assistance with any aspects you’re unsure about.
