If i import some goods from the US to the UK, repair the goods in the UK (increasing their value) then export them back to the US, at what stage would

[gbcv]

Ive seen a business opportunity where i can :

Buy some faulty goods from the US and import them to the UK, at this point the goods are worth c. £500.
Repair the goods in the UK, the repair would be c. £100
Sell the goods back to a new customer in the US for £1000.

The problem seems to be customs / duties at the import and export stage.

What ever profit there is could easily be eroded by this.

If it where a straight forward sale eg. selling UK goods to the US it would be simple to work out the customs / duties costs. But seeing as they are US goods in the first place, what would be the best way to calculate this ?

 

[Customs Geek]

Hi gbcv

Pretty much all customs authorities treat any import value as the price you sell something for so in your example you or your customer would need to declare the £1000 to US customs. Some countries such as the UK also requires the importer to add the cost of shipping and insurance .Most countries follow the WCO guidelines on customs value and you will find the US rules published on the US CBP website.

Customs also treat all imports as new imports unless you can prove otherwise.

The UK has a specific Return Goods scheme if you have the original proof of export so the US may have a similar scheme.

You should also look at the UK inward processing scheme for goods being temporarily imported for processing/ repair that allows you save the Uk import duty and VAT. If you are going to use the scheme for more than 3 times per 12 months then you need to apply to HMRC well in advance to use the scheme. If you only use it occasionally then you can apply with your customs declaration.

 

[DontAsk]

The UK has a specific Return Goods scheme if you have the original proof of export so the US may have a similar scheme.

Yes, I have used this a number of times by simply getting the customer to declare them as faulty and returned for repair.

In this case, however, there is no indication that these are returned goods. Quite the opposite, in fact, they are being purchased in their faulty state. Interesting business model that no one in the US wants to repair them locally.

I would be looking at the valuation. How do you value them when they are faulty? How do you know the exact nature of the fault? They could be worthless.

 

[Customs Geek]

To clarify. On the UK import the value for customs will be the price you pay for the faulty items plus freight costs and insurance if not already included.

 

[Customs Geek]

In this case, however, there is no indication that these are returned goods. Quite the opposite, in fact, they are being purchased in their faulty state. Interesting business model that no one in the US wants to repair them locally.

I was referring in my post to checking the possibility of the US equivalent to retuned goods being available. Goods purchased from the US and imported into the UK could never be declared as returned goods if they had never been exported from the UK in the first place.