What is it? 

When the Brexit transition period finished UK Customs and VAT legislation was updated. This means all overseas sellers that make any taxable sales in the UK, must register for VAT and account for UK VAT to HMRC. You are considered an overseas seller if you do not have a business established in the UK and make taxable sales of goods to customers in the UK. How VAT is charged depends on whether the trader is selling directly to their customers in the UK or through an online marketplace, the location of your goods at the point of sale, and the total value of the consignment you are shipping.

*Importing Stock to sell

If you are importing goods to the UK and sell through an online marketplace e.g., Amazon, ebay, etc. you will be liable for any Customs Duty & Import VAT when the goods are first imported into the UK. You can register for VAT to reclaim any Import VAT you paid. The normal rules about what VAT can be reclaimed as input tax will apply. UK registered businesses can use Postponed VAT Accounting (PVA). A UK established business must have a permanent physical presence, be registered at Companies House, and employ local staff. A serviced or virtual office is not enough to create an established business. For example, if you sell all goods using an online marketplace and you only have a fulfilment centre in the UK, then you are an overseas seller.

*Overseas Selling through Online Marketplace

If goods are located outside the UK when sold through an online marketplace, they will be liable for UK VAT on sales. The online marketplace will charge and collect this at the point of sale when the goods are sold.

**Selling Direct to consumer – NOT through an Online Marketplace

Any goods sold directly to a UK customer, for example through a trader’s website and not through an online marketplace based in Great Britain, will attract Import VAT and UK Duty if the total order value is over £135. Consignments containing goods with a value of £135 or less, that are outside the UK when sold, will attract UK Supply VAT. Supply VAT should be charged and collected at the point of sale. The £135 limit applies to the total value of items contained within a consignment/parcel. The consignment value should be based on the intrinsic value, which is the price of the goods when they were sold, excluding any transport and insurance costs. This is unless they are included in the price and not separately shown on the commercial invoice and any other identifiable taxes and charges. Unless sent individually, the seller must add the individual values of all items in a consignment together to get the total value of the consignment.

What type of business could benefit?

If your business is registered for VAT in the UK, you can use PVA and account for Import VAT on your VAT Return for goods you import into the UK. If you are a retailer, online trader or manufacturer importing goods from outside of the UK – your business could benefit from improved cash flow when importing goods.

***Want to use an agent to help import goods on your behalf?

You can appoint someone to import goods on your behalf such as a freight forwarder or customs agent. You will need to appoint them, provide written instructions, and advise them on how your business wants to account for its VAT.  These instructions are vital so the correct VAT can be paid and accounted for when making your VAT return to HMRC. This ensures all VAT records match the goods that have been imported and you remain compliant.

Want to know more…

If you think your business could benefit from Postponed VAT Accounting or eCommerce Managed Returns & Duty Reclaim, why not email our Sales team at info@ukpworldwide.com.

Disclaimer: 
The information provided in this article is for general informational purposes only and is based solely on our experience in that field. It should not be considered as expert legal, financial, or tax advice. We do not provide VAT advice, and any information provided should not be relied upon as a substitute for consulting with a qualified professional. VAT regulations and laws may vary by jurisdiction and can be subject to frequent changes and updates. Therefore, it is essential to seek the guidance of a qualified professional tax advisor who can assess your specific situation and provide appropriate advice based on current legislation. Businesses importing to Northern Ireland are still considered part of the EU VAT area and have different requirements.

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You may have read a recent news report of one of the largest discoveries of counterfeit goods worth a record £87m found in shipping containers in Manchester*.

This is clearly not only illegal but also damages well-known brand identities due to poor quality, impacts on their revenues as well as unpaid duty and taxes to central government. There is also other criminal activity that is undertaken from the proceeds of these crimes.

This is why it is important, that when you are choosing your customs clearance broker you look to work with a reputable company that is AEO accredited, this is a good sign for supply chain and customs compliance as they have stringent administrative procedures in place. UKP Worldwide (UKPW) has been AEO accredited since November 2016, this not only ensures that you are compliant with current customs legislation for declaring the correct duty and taxes but that they are the first line of defence in ensuring that counterfeit goods are not flooding the streets and undervaluing your brand.

UKPW uses its in-house developed software to perform a number of validation checks on the data it receives from its customers to ensure that not only are the goods manifested correctly but the origin and value of the goods also stands up to scrutiny.

Lee Bucktrout, CEO and founder of UKP Worldwide, explained, “In the infancy of our customs brokerage business, we were approached by overseas 3PLs and retailers who could not provide the level of detail we required. Dealing with this type of trader would have led to many shipments being placed on hold and subject to customs inspection, and impacted on our other clients who were compliant. As a business, we decided very early on that we would only work with those customers that were looking to ensure a seamless transit of goods over borders by making the correct declarations. This allowed us to keep our operational costs to a minimum at the same time as ensuring a high level of quality of service. Online shoppers want their goods delivered without delay, so UKPW feels that it is playing an important part in the customer journey at the same time as ensuring that duty and taxes are collected.”

UKPW specialises in the bulk import and export of low and high-value eCommerce goods as well as offering a managed returns and duty reclaim solution. Come and talk to one of our Sales team to see how we can help keep your business growing sustainably.

*Source: Sky News

In June’s issue of Boutique magazine, we discuss the difficulties retailers face exporting goods into the UK since Brexit.

Do you think this sounds familiar to you and your business? 

Read the full article here: https://issuu.com/bpm008/docs/boutique_june_2023/42

Over the years, we’ve exhibited at various Triangle events, with the last being in Hong Kong, October 2019, pre-covid.  Triangle’s, World Mail & Express events have taken on a new direction in line with industry changes, previously focused on international mail, whereas now they’re very much concentrating on all things eCommerce covering the latest industry topics and innovations.

This year’s Europe event was held in Tallinn, Estonia with over 200 delegates registering to attend. The event offered two packed days with 30+ speakers, networking breakout sessions and a variety of exhibitors, including UKPW.

During the event, Lee, Guy and Paul spoke with delegates on our exhibition stand about customs clearance and returns management including duty reclaim service. In between attending seminars and manning our exhibition stand, they caught up with familiar faces, whilst also connecting with new industry and customer prospects.

Guy Cliffe, Sales Director says: “The audience for this show has changed since we last exhibited pre-Covid, as it has had to adapt as the industry has moved from post to parcels (just like UKPW!), so it was a great opportunity to network with some new companies and find out more about future trends in the eCommerce market. We also picked up some useful leads, so watch this space as we now try and onboard some more new customs clearance customers”.

Paul Taylor, Business Strategy & Finance Director says: “Whilst there were some familiar faces amongst the attendees there were lots of new suppliers and customers who we were able to engage with. It was great to see some of the new innovative solutions being employed around the world with a lot of focus on sustainability which can only be a good thing. A special mention needs to be made for the Ukrainian Post led by Igor Smelyanski for keeping mail and parcels moving in probably one of the most challenging environments in the world”. 

Triangle’s European event is also home to their World Post & Parcel Awards ceremony, presenting our team the opportunity to don their tuxedos and unwind with fellow exhibitors.

Our next planned exhibition is Triangle, Kuala Lumpur, 18-20th September.

Want to improve cash flow and customer journey? Come and talk to UKPW about their fully managed returns process and duty reclaim.

As an online retailer returns are inevitable. As many have come to realise returns are an additional cost of sale to the business. Managing the returns process as well as repackaging and returning items to stock can be quite a costly process. On top of this, high-value goods (>€150.00) where duty has been paid as part of the outbound journey means that cash is tied up for an extended period of time.

UKPW has been managing the client returns process for a number of years and has automated the duty reclaim process with its in-house developed customs clearance software. Guy Cliffe, Sales Director of UKPW explained “With UKPW handling the imports to the UK from internationally based clients means we are able to receive return items, verify and confirm contents of parcels to our international clients thus initiating the refund process. This improves the customer journey knowing that the retailer has an efficient returns process in place. The automated process of reclaiming duty of high-value items where applicable is also started at this point. Duty is normally refunded within 90 days of submitting the claim.  This improves the cash flow of the retailer as they usually effect the refund when UKPW has advised that the goods have been returned to their UK facility in satisfactory condition.”

Many organisations are missing out on reclaiming the duty as the process is seen as being quite difficult. UKPW can manage the whole process from start to finish on your behalf. Contact our sales team to start improving your cash flow today.

After a great post-COVID 2022 for UKPW, we have had a fantastic start to 2023. After attending the Berlin Expo last year as delegates we took a leap of faith in February and exhibited at the show for the first time. Four senior members of the team attended the show including Lee Bucktrout Founder and CEO, Guy Cliffe Sales Director, Marie Pay Head of Client Services, and Kelly Hudson Marketing Manager. Donning their matching outfits they were very excited about the day ahead.

It turned out to be an amazing event surpassing all expectations with customers and suppliers alike making an effort to attend this one day event. There were no usual quiet spells, the team were nonstop from start to finish. As well as meeting up with some of our existing customers we also met with Austria Post, Emolog and Direct link Germany to name just a few. Having discussed our proposition with many prospects we left the show with over 50 prospects who have all subsequently been contacted.

We would like to thank everyone that attended the show and gave UKPW the opportunity to explain how we can help EU based retailers, 3PLs, customs agents and freight forwarders export low and high-value eCommerce products to the UK. With UKPW’s in-house bespoke software, we are able to manage the full customs clearance process ensuring correctly paid tax and duties and compliance to HMRC regulations. UKPW also offers a fully managed returns service including reclaiming any duty on returned goods over £135.00.

If your eCommerce market expansion has been interrupted by BREXIT and the new customs regime, come and talk to UKPW and let us demonstrate how we can get your international development back on track.

We are already in the process of booking our spot for 2024 and look forward to meeting many more potential clients.

Thank you Berlin Expo it was a great show.