Importing from China

[Karan1]

Hi,
I’m staring out and thinking about importing from China.

I have some questions.
I have got an EORI number. I assume I also need to register for a VAT number?
Also, is it advisable to use a freight carrier or do it myself? If I do it myself, what additional things do I need to do?

Once my goods are here. I sell them. Do I need to pay taxes on this too? What taxes? Tax on profit? Anything else? I’m trying to work out if this is worth while.

At what point do tell HMRC?

Thank you.

 

[Deleted member 302361]

As a starter look here - https://www.gov.uk/starting-to-import . and https://www.gov.uk/guidance/help-and-support-for-vat

At what point do tell HMRC? - - As soon as you start trading.

Some Chinese companies will tell you to give a lower value at import than the one you are charged to avoid paying duties - Before you go down this road, I'd read this - https://www.gov.uk/government/publi...l-penalties-for-contraventions-of-customs-law

 

[Mike Foulds]

Just to add to the above good/correct advice.

For importing, I would definitely suggest going through a freight forwarder, they should have accounts with most shipping lines, hauliers, etc, and be able to get you better rates than you would be able to directly, as they handle larger volumes.

For payment, you will pay any duty/vat applicable on arrival of the cargo in a UK port/airport, and most companies will ask for full payment of this prior to release/delivery of the cargo.

Hope that helps.

 

[Paul Kelly ICHYB]

I would also suggest you speak to an accountant.

You should understand all of the ramifications of importing and selling before starting out, otherwise you will meet the fate of too many others....

 

[Mr D]

Hi,
I’m staring out and thinking about importing from China.

I have some questions.
I have got an EORI number. I assume I also need to register for a VAT number?
Also, is it advisable to use a freight carrier or do it myself? If I do it myself, what additional things do I need to do?

Once my goods are here. I sell them. Do I need to pay taxes on this too? What taxes? Tax on profit? Anything else? I’m trying to work out if this is worth while.

At what point do tell HMRC?

Thank you.

If you register for VAT then you'd charge your buyers VAT on relevant sales and collect the money for HMRC as an unpaid tax collector.
Until you reach the VAT threshold or store stock in a foreign country you don't need to register for VAT.

If you don't register for VAT then you don't charge your customers VAT.

If your business is a sole trader then you pay personal taxes on profits at personal tax rates. The profit is your income.
If your business is a limited company then the company pays corporation tax on its profits.

 

[QPLAST]

You definitely need to pay hmrc either way. Corporation tax or personal income tax on profit.

If you register for vat, then you collect the vat from your customer and pay the difference ( of what you have paid during the import). If you are not registered, then you can't collect vat from your customer and the vat paid during the import is your additional cost/duty.

You must discuss with a qualified accountant from the same field to avoid unnecessary notices from hmrc.

All the best,

Cheer's, Deepak

 

[Karan1]

Thank you. This is all very useful

 

[CHUKTC]

I think the tax implications and registering with HMRC are well covered by the above contributers.
Regarding freight it partly depends on what you are shipping, and how much. For small quantities you may chose to ship by air as the best option. For larger quantities a part container load (LCL) may be the best option. This is where you need to be very careful. Many sellers in China will offer 'free shipping' or very low cost. You need to be aware of this and avoid at all costs. You will be liable to pay all port costs on arrival, customs clearance and onward delivery. You wont know the port costs until the goods arrived and the cost is stacked high by the seller to pay for shipping! Fr LCL therefore you need to arrange the shipping yourself and most people will use a freight forwarder for this. If UK based they should be able to quote you a price delivered to your door.

For full containers its a little more transparent but generally you will get better rates if you buy the goods FOB and then shop around and arrange shipping yourself.

If you need help with any of this let me know - we do this everyday of the week! The other thing you should consider is which suppliers to use - careful choice is important to get the right quality and the best price.
.

 

[paulears]

If you have an EORI number, then HMRC have you tagged as a business already - so you need to register with them properly. The date on your EORI will need to match of course!

 

[SamPEL]

Surely you need a VAT number to get an EORI number?

 

[paulears]

I don't think so - your EORI number uses your VAT number if you have one, but I'm pretty sure VAT registration is not required. it just means that the couriers who bring goods here know you are legitimate and some cannot do the collection and delivery without the number, so while China Post probably doesn't require one, UPS and others do.

 

[Import Expert]

Surely you need a VAT number to get an EORI number?

Nope, VAT number not needed. You still need an EORI number to import/export whether you are registered for VAT or not (Provided goods are not for personal use).

 

[Nick Garnett]

If you are importing from China I would always recommend using Alibaba, I've done it many times and never had any problems at all. I've also always used shippo dot co dot uk, brilliant service. Just need an EORI number.
All the best with your business venture