Importing from the U.S to the U.K

nin73 · Feb 23, 2010

Hi Guys,

I am a partner in a clothing business. We currently buy blank T's and get our designs printed on them in the UK. We have recieved some quotes for supply of the same T's and printing out in the U.S and they are half as much as they are here.

We realise we will have to pay some kind of tax/duty on import. The cost to print each individual T shirt will be around £6 but once we have tagged them and packaged them we retail them for £26.99. Do we pay on the £6 or £26.99?

The invoice from the printer will be for the £6.

RAL · Feb 23, 2010

nin73 said:
We realise we will have to pay some kind of tax/duty on import. The cost to print each individual T shirt will be around £6 but once we have tagged them and packaged them we retail them for £26.99. Do we pay on the £6 or £26.99?

The invoice from the printer will be for the £6.

What do you pay on £6 or £26.99? Your question is not clear.

You pay import duty/vat on purchase price/cost of goods you import. So if you are importing from USA at £6.00 then you pay import duty / vat or both on this £6.00.

However if you are vat registered you can claim the vat you paid on import. But then you have to account for vat on your sales!

Vikas · Feb 23, 2010

You will have to account for output VAT on the £6 per t-shirt and then later on again when the sales is made.

3pic · Feb 23, 2010

The import duty and VAT wil be based on the total value of the consignment - so if you import from the US ready printed t-shirts that cost X, then the duty and VAT will be based on that value. This is your purchase/import value.

The duty sticks with you, but you can reclaim the VAT element as input tax to your business.

What you then sell the T-Shirt for is upto you and the VAT (no duty) you charge to your customers will be based on the higher price of say £26.99 (but if you have set the price as £26.99 then I assume this is a VAT inclusive price rather than £26.99 + VAT on top).

nin73 · Feb 23, 2010

Ok so if i have a total package valued at $1000 including shipping i would pay 17.5% VAT on this at £113.25??? Based at current exchange at .647

Does anyone know where i can find out about duty rates?

Wavecrest Ltd · Feb 24, 2010

nin73 said:
Ok so if i have a total package valued at $1000 including shipping i would pay 17.5% VAT on this at £113.25??? Based at current exchange at .647

Does anyone know where i can find out about duty rates?

Hi there - duty rates on clothing are usually around 12% but it depends on the customs tariff heading. The duty is calculated on the cost of the goods including shipping and marine insurance. The VAT is calculated on the cost of the goods plus shipping plus marine insurance plus the import duty and finally an HM Customs allowance for UK landing charges.

Depending how the goods are sent over from the States, you will probably have other costs in the UK for customs clearance, port handling, delivery to your warehouse etc to factor in to your costings.

Glen

3pic · Feb 24, 2010

http://ec.europa.eu/taxation_customs/dds/cgi-bin/tarquer?Lang=EN

You need to have a play with descriptions and drill down to the finest detail to get an accurate outcome but duty can be quite high for US clothing.

So your shipment will cost £1,000 + DUTY (eg 10%) = £100 and then VAT added on top of the duty at 17.5% = £1,100 x 17.5% = £192.50 VAT so a total shipment price of £1,292.50

You can reclaim the input tax (the £192.50) if you are VAt registered and charge VAt on the sale of the t-shirt. You cannot reclaim the duty of £100, that is just another cost/overhead.

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Importing from the U.S to the U.K

nin73

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Wavecrest Ltd

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