EXPORTING

Although your business may have an established UK market, there’s often no reason why it couldn’t successfully compete overseas too, growing your revenue and profit.

But before you start, you need to have sound knowledge of your would-be markets. You also need to consider whether your products are right for each target market and whether you have the necessary resources to start exporting.

 

HM Revenue & Customs defines an export as goods transported from the UK to a destination outside the European Union (EU). Countries outside the EU are known as “third countries”. Traders who export goods to countries outside the EU must make export declarations to customs through the National Export System (NES). You must also make sure that VAT, export taxes and duties in the destination country are paid where necessary, and follow transport procedures, many of which are now compulsory. When a third country receives exports, it may charge duty. A third country may also charge an equivalent of VAT or sales tax. Duties are based on the type of goods you’re exporting, the country they originate from and their value. Check with UK Trade & Investment or the destination countries about what taxes are to be paid and whether you, the exporter, are obliged to pay them.

First of all there has to be an early agreement on contract negotiations with the customer who will be paying each type of charge, as this can affect the final price of the goods. Also there has to be a provision of documents needed to import the goods into their country. As a minimum, there is a need to provide documents recording the exporter (yourself), the customer, the goods and their value, the export destination, how the goods will be transported and the route they’ll take.



VAT When export of goods takes place outside the EU it can usually be zero rates for VAT. To qualify, the goods must leave the EU within a set time limit, and the records must be kept of their sale and transport, and there must also be official evidence of export. Official evidence of export can either be the Goods Departure Message (GDM) for goods leaving the EU direct from the UK (direct exports) or, for goods leaving the EU via other member states (indirect exports), Travelling Copy 3 of the Single Administrative Document (SAD). This must be stamped by customs in the last member state where the goods exit the EU (also known as the ’Office of Exit’). Separate rules apply to goods that are moved through EU countries to other EU countries.