Importing from China to UK with Neil Curran of Regional Express -
Importing from China to UK with Neil Curran of Regional Express

Importing from China to the UK can get tricky at times. Today we learn from Neil Curran about the pros and pitfalls of the logistics industry.

What do you do at Regional Express?

Door to door logistics

Freight forwarding

Eg:  Manufacturer China, India

To the US or UK

Our own warehouse too 

Airfreight, Ocean freight etc. 

Core services are to help US sellers expanding to Europe.

Freight Forwarding

Door to door logistics

Freight forwarding

Eg Manufacturer China, India

To the US or UK

Our own warehouse too 

The core of clients are US-based companies

Typical supply chains from China – pros, pitfalls of each

Manufacturer China-US

Manufacturer China – UK/Europe

What are the potential pitfalls?

Not knowing costs for a new marketplace when importing from China to the UK. 

Especially in Europe – a big marketplace.

Know your tax – and duty.

Shipping and freight forwarding costs.

Import duty and VAT

Import taxes and VAT often not taken into account

Sales tax in the online marketplace.

They have a tax department at  the Regional Express

VAT and Americans

It is a tricky subject! Overseas companies don’t really understand VAT. It scares them off with expansion to Europe. 

But it’s not as tricky and scary as it seems. 

It is just about understanding about what value you have to declare coming into Europe

Then when selling it to end-user, ensure you’re putting enough VAT. 

This is because tax returns for VAT in the UK only filed once every 3 months

In Germany and France, it’s monthly. 

Top 3-4 facts about VAT in the UK that Americans don’t know

  1. When importing from China to the UK, you have to pay import VAT. That’s generally paid by freight forwarding company on your behalf. 
  2. The amount is effectively the manufactured amount from say China

If importing from the USA to UK additional factors: 

  • Any charges from China to the US initially (that can be discussed case by case)

Import duty 

A lot of people miss this.

The VAT is 20% but import duty is product specific.

So know your HTS codes especially as they vary from 0 to 20% 

VAT zero-rated

Depending on the type of product VAT can be different when importing from China to the UK.

This is because children’s clothing is VAT zero-rated.

A lot of food products

Always worth checking the HTS code – look at government platforms

HTS code will always tell you: 

  • Import duty %
  • VAT (whether it’s zero-rated)

How are import duty and VAT calculated

Example:

Importing 2000 mugs, weigh 200g each

Landed costs

Value of goods (manufacture) eg £0.75

Shipping cost eg £0.25

insurance eg: zero adds up to “Dutiable value” eg 6% duty for plastic items 

Eg: 6% of £1.00=0.06

Landed cost+duty+landing charges = VATable value

Landing charges are based on the size of consignment NOT value of the consignment

The VATable value

VAT adjustment factor 

Airfreight shipment of 400 kilos of that would effectively be 40p a kilo “VAT adjustment factor

=£160

The VATable total of 2220 

VAT @20% =£444

Per unit = 22p per unit VAT

The VAT is a cash outlay- that money does get refunded/offset against your sales tax. 

 So that is a cashflow issue vs. Profit and loss issue. 

Be wary of deals with “free ocean freight” from China

Often you get stung at the destination. 

You get consistency in pricing from the freight forwarder.

Be very careful with Chinese manufacturers randomly changing things. 

How do people explore working with Regional Express?

Please feel free to get in touch with him at:

neil@regionalexpress.co.uk 

You can also visit their website: https://www.regionalexpress.co.uk/

Or call via the site +44 1794 516515

**Special deal for 10K Collective Listeners**

When you email/contact/call Regional Express, if you use the Promo code of “10K” you’ll get these bonuses: 

Bonus 1:  VAT registration free of charge; 

Bonus 2: discounted rates on VAT filing;

Bonus 3:  any freight bookings 10% discount till the end of 2019 (from Sept 1 -Dec 31 2019).

Other Freight/Importing help from Neil Curran:

e-commerce shipping

FBM for e-commerce