We are a small start-up company that will be selling board-games in the near future. The games will be funded by Kickstarter and manufactured in China. Then they will be imported to UK and exported to USA.
Taking into account that we are UK based, I wonder what is the real condition of these imports/exports.
When the items arrive from China to UK, that counts as importing, right? But when shipping from China to USA… is that an UK export? How should it be treated regarding legislation? For instance, where should the VAT be paid, and what ammount? What other variables should we take into account?
I have just noticed that a previous question has answered my query.
Michelle@MKK Consulting: "As the goods are not physically in the UK, these can not be treated as UK exports, and will be treated as an export from the country from where they will be shipped from.
Presuming your supplier will act as the exporter of record from the despatch country, and the customer will act as the importer into their non-EU country, then you will be buying and selling whilst "in-transit" and therefore this would be outside of scope of VAT."
Could you elaborate a bit in this direction? I still have trouble figuring out our role in the process… if it does not count as an UK export… then what is the nature of our "exporting" to USA? How do we fit in the process as a Uk based company?
If shipping directly from China to customers in USA take care with the documentation – otherwise your customers will see your supplier and your buy-in prices and might seek to cut you out of the deal or at least renegotiate your sales price.
The Chinese manufacturer will have to be the exporter from China and will have to produce all the paperwork needed. Your buyer in USA will have to be the importer.
You need to ensure that the freight agent is given your paperwork (particularly the sales invoice) so that your paperwork is used for the import to the USA. Whilst this is perfectly possible it can be risky – it only takes one clerk to forget and use the wrong the document and the wrong import duty etc. will be paid and the customer will see all the Chinese information.
It is also important to tell the Chinese supplier not to put his documentation inside the packing boxes.
If you bring the items to the UK first you don’t have to pay UK import duty and VAT there are customs procedures that permit you to avoid that if you are going to re-export.
Let me know if you need further information or training.
If you are just landing the goods in the Uk and forwarding onto the USA I would think it can be classified as ‘bonded’. In other words it dosent enter the UK for tax reasons. Its quite possible you may be wanting to change something with the product like packaging or instructions etc. This is also possible to do this work in a ‘bonded’ warehouse. There are plenty in the UK especially at Heathrow and a good freight forwarding company could help you.
Good luck with your business,
Hartwell Smith Associates.