Christmas is coming, and we understand how difficult it can be for the UK’s migrant communities to fully enjoy the festivities without their native cuisine. Luckily, thanks to globalisation and the internet, nowadays anyone can export and import whatever they want from all over the word. In this vein, this week This Foreigner Can is focusing on import trade. So, if you want to start an import business, you better get reading!
As the economist D. Ricardo explains in his theory of “comparative advantage”, no country can sustain itself. In other words, a country needs to trade with another country if it needs specific goods that it can’t produce itself. An import business is one which brings foreign products into the domestic market. Import trade can often present a good business opportunity, as a trader can bring in and sell produce his country perhaps doesn’t provide. There could even be the potential of a monopoly.
Before starting your import business, you need to demarcate the territory where you want to trade, because rules vary.
Since Europe was created, it’s easier to import goods because circulation is free. That’s why we prefer the term “movement of goods” to the word “import”. When trading in the EU, the only thing that you need to consider is:
- VAT payment
- the commodity code which qualifies your good and consequently the tax attached to that good
Importing from non-EU countries is a little more complicated in terms of the documentation. Here are the different aspects that you need to take into account when importing:
- the declaration of custom – a document that you have to prepare and declare to HMRC
- the import duty that is attached to the goods you import are importing
- like import duty, some goods have a VAT that you have to pay directly to HMRC
Establishing your business is not an easy task; a lot of things need to be considered including the Licence, the Customs Freight Simplified Procedure (CFSP) and the Import Control System.
There are two types of Licence; the automatic import licence verification between the Department for Business, Innovation & Skills (BIS) and the HMRC, and the automatic Licence Verification between Defra/RPA and HMRC. The first one is an automatisation that will cut down on the time spent doing administrative tasks. The second licence is only for horticulture, plants, animal products and high-risk food. These type of products are regulated and require a verification system called ALVS.
The CFSP is an electronic system that will speed up your import to non-EU countries. If you want more information about how it works, visit this website for help. (https://www.gov.uk/guidance/customs-freight-simplified-procedures-cfsp)
The last thing is the Import Control System. This process ensures the safety and security of good circulation. For more information, we advise that you visit this page: https://www.gov.uk/guidance/import-control-system
A lot of resources are being set up to help you with your import business.
The most popular is the UK Trade and Investment (UKTI). This website was created to develop international trade in the UK. In this website, you will find explanations and support to help expand and run your import business all over the word. (www.uktradeinvest.gov.uk/)
‘Business’ is also an excellent website that will help you with the necessary regulations and processes for your import business (www.businesslink.gov.uk)