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Starting To Export

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Monday 14th October 2019 No Comments »
Starting To Export

Overview

To export goods to countries outside the EU or send them to another EU country you have to:

  • Include the sale on your VAT return
  • Make sure you qualify so you won’t have to pay VAT
  • Find the correct commodity code for goods you export to countries outside the EU
  • Register with HMRC’s CHIEF system for exporters if you’re exporting outside the EU
  • Declare the goods you export using National Export System (NES) system which is part of CHIEF

Check if you need a strategic export licence for some controlled goods, eg military, defence or security related goods. This also covers Dual Use goods that can be used for both civil and military purposes, eg some software. If you do need a strategic export licence, read the guidance first then apply using SPIRE.

You can use a commercial agent or a freight forwarder if you don’t want to deal with export procedures yourself.

UK Trade & Investment and UK Export Finance offer help with various aspects of exports.

Sending goods to EU countries

You don’t have to pay duty and there are no customs checks when sending goods within the European Union (EU). The goods are in ‘free circulation’. This also applies to goods from outside the EU but only if duty has been paid on them. Exports within the EU are called ‘dispatches’.

Find information on doing business in individual EU markets on the UK Trade & Investment website.

Regulations and product standards are the same in most EU member states. If you sell products in the UK it’s likely that you already comply with standards in other EU countries (eg security for electrical goods).

Paying VAT on dispatches within the EU

You have to:

  • Record all the goods sold to EU countries on your VAT return
  • Fill in an EC Sales List
  • Fill in an Intrastat Declaration if your total dispatches are worth more than £250,000

Your customer is VAT registered

If your customer is VAT registered in their country, they’ll pay VAT for the goods at their country’s rate. You don’t pay any VAT. You’ll need your customer’s VAT registration number for your VAT return and paperwork proving that the goods have been sent within certain time limits (usually 3 months).

Your customer isn’t VAT registered

If your customer isn’t VAT registered, you’ll normally have to pay UK VAT on the goods you export. You’ll only be exempt from paying VAT if you’re responsible for the delivery of the goods and their value is above a certain amount called the ‘distant selling threshold’. In this case your customer covers the VAT. The threshold varies in each EU country.

HMRC has detailed VAT export information and information on international trade and VAT.

VAT Helpline
0845 010 9000

Paying duty on dispatches within the EU

Goods that have been produced in the EU and are then sent to another EU country are in free circulation and you don’t have to pay duty on them. This also applies to goods from outside the EU if duty has already been paid on them. For example, an importer brings bicycles from China into the UK and pays duty on them. They are now in free circulation. You can buy the bicycles and dispatch them to France without paying duty on them. If duty hasn’t been paid on goods arriving from outside the EU you have to follow the rules for importing goods from non-EU countries.

Commodity codes

You need a commodity code for goods not in free circulation. The code classifies your goods for duty, tax rates and regulations (eg licences).

Check if you need a strategic export licence for some controlled goods, eg military, defence or security related goods. This also covers Dual Use goods that can be used for both civil and military purposes, eg some software. If you do need a strategic export licence, read the guidance first then apply using SPIRE.

Exporting to non-EU countries

Exports to countries outside the EU are called exports to ‘third countries’. You need to submit an export declaration for these and may need an export licence. You might also have to pay custom duties and taxes in the destination country. Export regulations vary, depending on the country you’re exporting to.

Commodity codes

You need a commodity code for all exports outside the EU. The code classifies your goods for duty, tax rates and regulations (eg licences).
Export licences

Sometimes you might need a licence for exporting goods to a third country. For example, agricultural goods or valuable antiques often need one. You’ll have to get the licence from the relevant government organisation, eg Department for Agriculture.

Export declarations

If you want to export goods to a third country, you must submit an electronic export declaration. You do this by:

  • Registering for an Economic Operator Registration Identification number(EORI)
  • Registering for the Customs Handling of Import and Export Freight system (CHIEF)
  • Submitting your export declaration through the National Export System (NES) – which is part of CHIEF

Many businesses use an agent called a freight forwarder to handle these declarations for them.

Special rules apply if you’re moving goods via other EU countries before exporting them to a third country. This is called ‘indirect exports’.
There is more information on submitting declarations through NES.

Paying VAT on exports overseas

You have to account for VAT on your exports to non-EU countries. VAT for third country exports depends on how the goods are sent, eg if you send them directly or through an agent and if your customer collects the goods. HMRC has information on international trade and VAT.

Paying duty on exports to third countries

Duty charges are set by the country you export to and depend on the type of goods, where they come from and their value. The UK Trade Tariff lists the duty charges, tax, custom rules and paperwork for exports to third countries. You might be able to claim duty charges and VAT back or delay payments for some exports outside the EU. This is called ‘duty relief’ and there are a number of schemes you can apply for. Some countries have trade agreements with the EU that allow you to export at lower or zero duty rates. In these cases you must usually be able to prove where the goods originally come from.

Check if there are embargoes or sanctions against exporting certain goods (eg military, defence or security related goods) to individual countries.

Exporting via other EU countries

Moving goods through the EU to non-EU countries is known as ‘indirect exports’.

Indirect exports need special procedures and paperwork, which generally depend on the final destination of your goods:

  • You must fill in an export declaration – even though the goods are initially moving through an EU country
  • Export licences and other controls will depend on the destination of your goods
  • You won’t have to pay VAT on goods exported outside the EU, though you’ll have to show proof that the goods actually left the EU
  • You’ll need a trade control licence if you’re moving strategically controlled goods (eg military or defence) between 2 non-EU countries
  • You might need a transhipment licence if you arrange the shipment of goods through the UK
At Bizorb we aim to provide the most accurate and up to date information to you. This article contains public sector information licensed under the Open Government Licence v1.0. If you spot any errors in this article please let us know.

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