What is customs clearance?
Customs clearance is a compulsory process for any goods entering or leaving a country. It requires the submission of various export and import documentation, as well as the payment of duties, VAT and any additional costs such as storage and testing by customs agents.
How long does customs clearance take?
Customs clearance should be completed in minutes or hours, but it can extend to days or weeks if documentation is missing or the goods needs to be inspected. In such cases the goods will be held until the necessary documentation has been provided or customs agents have completed their checks.
How are customs charges calculated?
Customs charges are determined by the following:
Duty – This is a tax levied by a country on all imported goods. It is charged as a percentage of a product’s value, as determined by its commodity code and associated duty rating. UK commodity codes can be found on the government’s Trade Tariff website. https://www.gov.uk/guidance/finding-commodity-codes-for-imports-or-exports
VAT – The ‘taxable import’ on which VAT is payable is the amount that you pay for your goods, plus the shipping cost, plus the Duty. You are effectively paying VAT on everything that it costs for you to buy the goods and get them into circulation. The rate of VAT differs by country – it is currently set at 20% in the UK.
Additional costs – Customs charges also include any costs accrued as a result of goods being held by customs. Importers can be charged for any tests or X-Rays conducted to check whether a product is safe to enter the country and/or complies with trading or quality standards. They may also need to pay for storage should goods be held for longer than the allotted free-time period.
Anti-dumping duty – is an import duty charged in addition to normal Customs Duty and applies across the UK and the whole EU. It allows the UK and EU to take action against goods sold at less than their normal value, to protect the domestic manufacture of certain products and deter the import of it at a lower cost than the supplier’s native market rate. Importers can find out if their goods carry anti-dumping duty (ADD) through the Trade Tariff website.
How do you pay customs charges?
Most importers and exporters will have a freight forwarder or customs broker that pays customs charges on their behalf, which saves them the trouble of paying it themselves. If the importer manages their own shipments, they’ll typically be sent an invoice detailing the charges once the goods arrive in the country. These will need to be paid before the goods are released for onward transport.
In certain circumstances, the importer won’t be liable for the payment of import charges. It will depend which incoterm has been agreed between the importer and supplier (exporter).
UK importers can also apply for a duty deferment account through HMRC. A duty deferment account lets you make one payment a month through Direct Debit instead of paying for individual consignments. You can apply for a duty deferment account if you’re an importer, someone who represents importers or you’re releasing goods from an excise warehouse. A freight forwarder or logistics partner can help manage the application process, or simply provide guidance on whether it’s worth applying for.
Can customs duties be claimed back?
Import duty can’t be claimed back, but VAT-registered businesses are able to claim VAT back on all of their imports. With VAT accounting for 20% of the entire process cost for UK importers, it makes for a considerable saving. HMRC provides further guidance on how to claim back VAT payments for imports.
Customs duty relief schemes
There are various duty relief schemes available that allow importers to legally pay lower or in some cases no customs duty. Viability for a duty relief scheme depends on a number of variables including the type of product, intent for product’s use and the country of origin.
The main duty relief scheme available to UK importers is the GSP (Generalised Scheme of Preferences), this allows goods purchased from suppliers in certain countries to be lower-rated or exempt from customs duty. It is designed to help businesses in developing countries trade globally.
The easiest way to find out whether you can claim an exemption is to check your commodity code through the Trade Tariff website. The relevant product page will detail any import measures and restrictions, including duty exemptions for certain countries.
There are a number of other duty relief schemes that provide exemptions based on how a product will be used and the length of time it will be in the destination country. These include:
Temporary admission – for goods brought into the UK for designated, short-term use (e.g. an exhibition)
Inward processing – for goods imported from outside the EU to be processed and then exported (either to outside or inside the EU)
Outward processing – allows the export of goods to another (non-EU) country for processing and repairs, with full or partial duty relief when they return to the UK
Bonded warehousing – is a building or other secured area in which dutiable goods may be stored, manipulated, or undergo manufacturing operations duty and VAT free. Using a bonded warehouse means you can deliver your goods closer to their final destination. It also means that duty payments can be postponed until the product has been moved.
Duty suspensions and tariff quotas – relief is available on products that are imported to finish or use as raw materials in the UK (if the goods or materials can’t be bought in sufficient quantities from within the EU).
The amount of documentation required for customs clearance will vary by country, but the following documents are required in the majority of countries:
- Purchase order from the buyer
- Sales invoice
- Packing list
- Bill of lading or air waybill
- Certificate of origin
Any other documentation as required by the buyer, or as outlined in a letter of credit from a financial institution
- Purchase order
- Sales invoice from supplier
- Bill of lading or air waybill
- Packing list
- Certificate of origin
All other documentation as required by the buyer or the terms of a letter of credit
Certain items will also require an import or export licence, which place limits on the amount of goods that can leave or enter a country over a certain period of time (typically a year). Licences are handed out by different government departments, depending on the nature of the goods.
Customs clearance with TPS Global Logistics
Here at TPS, we offer a dedicated customs clearance service as part of our full range of freight forwarding and logistics solutions. Our team can assist with customs documentation and all other formalities to ensure the smooth transport of our customers’ goods.
Whether you’re seeking a long-term partner to look after your logistics and customs clearance, or require support for a one-off shipment, please contact us to discuss your requirements +44 (0)1622 237979 firstname.lastname@example.org
Do I need a customs clearance agent UK?
You can hire a transporter or customs agent to make the import declaration on your behalf and get your goods through UK customs. Your business must be ready to import the goods before you can get customs clearance.
How much is customs clearance UK?
You’ll be charged Customs Duty on all goods sent from outside the UK (or the UK and the EU if you’re in Northern Ireland) if they’re either:
- excise goods
- worth more than £135
If you’re charged Customs Duty, you’ll need to pay it on both:
- the price paid for the goods
- postage, packaging and insurance
|Type and value of goods||Customs Duty|
|Non-excise goods worth £135 or less||No charge|
|Gifts above £135 and up to £630||2.5%, but rates are lower for some goods – call the helpline|
|Gifts above £630 and other goods above £135||The rate depends on the type of goods and where they came from – call the helpline|
You pay Customs Duty on excise goods (for example, alcohol and tobacco) of any value.
For advice call the HMRC helpline – 0300 322 9434