I want to sell specialized micro-controller computers, made in the UK, to Australia. What duties and taxes are involved?
The devices are the key component in a voltage optimization system, for saving energy (electricity).
The devices are assembled in Sussex by a contract manufacturer, using electronic components sourced from all over the world. I would like to ship door-to-door.
What do I do about VAT?
What do I put on the "commercial invoice"
What duty and taxes are due, and can I pay them from this end?
Are there any "Green" subsidies, or tax exemptions, since these are energy saving products?
We at SIMPEX freight management can help with any worldwide freight movement.
Please feel free to send me any questions you may have below:
Darren Thomas / Business Development Manager
Tel: 0113 3970 461
***International Freight Services with Daily Departures from Leeds***
Simpex Freight Management Limited
4100 Park Approach
Tel: 01133 970 460 | Web: www.simpexfm.com
You need to take this step by step in order to achieve a smooth export process.
The first thing you need to do is consider if your item requires a UK export licence i.e. could it be used by civilian commercial companies and by the military? If it could it will be designated ‘dual use’ and may need a licence. See https://www.gov.uk/government/organisations/export-control-organisation for detailed guidance.
Next you need to consider your sales terms. Import duty and taxes can be paid in the UK but paying the tax (GST) is not tax efficient. It is better if the Australian customer pays this as there may be an opportunity for him/her to reclaim or offset the tax so it does not become a cost. You can still arrange the delivery door to door, just not pay the tax. It is best to use an INCOterm to express who is responsible for which actions and costs in your contract of sale. DAP named place would be recommended over DDP (sometimes referred to as door to door). See http://en.wikipedia.org/wiki/Incoterms for some discussion of the different terms.
Next you need to find the correct tariff code to describe your product – this will tell you what import restrictions apply and what the import duty percentage will be – see https://www.gov.uk/trade-tariff. Once you have the tariff code see http://madb.europa.eu/madb/indexPubli.htm for further help.
As you are exporting from the UK you do not need to charge UK VAT to your customer for the goods.
There is lots more to discuss but the above should get you started.
For more information on how to build up your export price take a look at the Open to Export Bootcamp webinar that I presented on export pricing.