Startup importing from China advice please

[DWMB]

Hi there,
I have a startup company with a product manufactured in China. I’ve been through the prototype and samples stage and need to figure out shipping/importing now. I have a registered company and have an EORI number. Company is not VAT registered. The factory has given me prices for air and sea. One option is DDP which sounds ideal but I have googled and can see it can be tax evasion which isn’t ideal! If I chose the type of shipping without duty paid, what steps do I need to take?

 

[DWMB]

I would much rather do DDP but how do I make sure it is legit?

 

[AW-UK]

Have you looked at a service like Shippo?

We used to have electronic devices shipped from China, we used a local freight company who regularly went across for some of their other customers and we just got the Chinese company to send it to a port, the freight company took care of everything else.

Places like Shippo didn't exist back when we were doing it, and you could probably get away with a lot more, you don't have to use that particular company but their website might have some useful information, e.g. https://www.shippo.co.uk/faqs/what-chinese-port-should-i-import-from/

 

[MOIC]

If I chose the type of shipping without duty paid, what steps do I need to take?

This will depend on your incoterms with your supplier, whether it's FOB or EXW.

The benefits of air and sea, will depend on the size and weight of your shipment. Take on board that any sea quotes (if LCL) will likely attract additional costs, which can be quite high.

With regards to DDP, if they can supply you with all the correct paperwork, then that's fine, but it's a big IF.

 

[Larry Fong]

If your manufacturer is new on exporting to UK, it may make mistakes easily on custom clearance and tax on the British side. It may not a good idea to order on DDP terms.

 

[Luke KSC]

Hi there,
I have a startup company with a product manufactured in China. I’ve been through the prototype and samples stage and need to figure out shipping/importing now. I have a registered company and have an EORI number. Company is not VAT registered. The factory has given me prices for air and sea. One option is DDP which sounds ideal but I have googled and can see it can be tax evasion which isn’t ideal! If I chose the type of shipping without duty paid, what steps do I need to take?

We went with DDP terms but ensured the contract stipulated all duties paid included VAT and port charges. No hidden fees or costs.

 

[paulears]

The only snag is how somebody in China can actually do this, when they have to rely on us, levying duty and vat correctly. There will always be some risk.

 

[MOIC]

The only snag is how somebody in China can actually do this, when they have to rely on us, levying duty and vat correctly. There will always be some risk.

Simply put, they cannot issue any invoices related to VAT payments, as this must be shown to have been sent to HMRC (which does not happen).

 

[paulears]

Indeed - this morning I got a demand from fedex for just over 70 quid for a shipment. I paid it and as usual their system is rubbish and I forgot to click the receipt tab before clicking ok - and it vanishes for ever. My VAT invoice might arrive in a few weeks or maybe not? However when I opened the box, none of the documents remotely give me the figures I just paid, the item declared value has actually been rounded up, not down and the supplier had no idea of the actual VAT I would get charged. To be fair, I didn't really expect it - but it is always a gamble.