All countries and international trading blocs protect their internal markets by setting tariffs on goods that cross their borders and go on to be sold there. If you send something overseas, then it could well be subject to such a tariff which you will need to pay, even if your customer has already paid for the item. What are the rules on customs duties, international sales taxes and the other fees that are associated with international shipping today?
How Much Does it Cost to Send Items Overseas?
The cost of customs duty varies on the choice of your service provider to take care of it. Many moving companies who have international experience will either have their own freight forwarder who can undertake this work on your behalf. Or they may use an agent when they need one. While some customs brokers and agents charge a flat fee of as little as £30 for their services. The costs will mount up depending on the destination you are sending items to and the complexity of the tariffs that will apply.
Customs Duty Rate
For example, a mixed shipment of pharmaceuticals, electrical products and chemicals being sent to China is likely to involve many more hours work to declare that a single musical instrument being sent to Canada. That said, you can still expect to pay:
| Service | Approximate Cost |
|---|---|
| Customs Clearance Charge | £30 - £50 |
| Airline Handling Fee | £45 - £95 |
| Air Bond Transfer Fee | £15 - £25 |
| HMRC's Fee | A proportion of your goods sales value |
| Money Transfer Fees | £65 - £100 |
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Removals companies which regularly ship items overseas are a great place to turn to get you through this potential minefield. Not only do they have established customs experts, but they can help to minimise your fees by organising your shipments in the most cost-effective manner. Compare the prices of the sort of services offered by removals companies by simply filling out a single quotation request and you’ll obtain plenty of responses, all from our free and easy-to-use service.
Customs Duty Within Europe
While the UK remains part of the European Union – and during any transitional arrangement which may occur following its exit – there are no duties that you need to pay to ship items to its member states. In other words, you can simply arrange for your shipment to be sent with your courier at the most cost-effective price you can arrange to places like Germany, France and the Republic of Ireland.
Customs Duty Outside Europe
However, exporting certain items outside of the EU – and within it, once the UK has left – will mean that international tariffs will probably apply. The trouble is that each country in the world sets its own tariffs for importing certain goods from the UK so there is no way of determining exactly how much, if anything, you will need to pay.
Why Hiring the Services of an Agent?
Many businesses and individuals who are shipping items into a different trading territory use the services of an agent, such as a freight forwarder or a customs broker, to make the necessary declaration to HMRC on their behalf. This means hiring someone with expert knowledge in their field and it can make exporting simpler.
Electronic Declaration for Customs Duty
In addition, it can be quicker to go down this route because getting the declaration right first time tends to prevent hold-ups at ports and so on. It also means that an electronic declaration can be made, something that is not possible unless you have registered for such a service yourself.
What Is the Difference Between Customs Duties and Fees?
As previously mentioned, customs duties represent the tariff that a country sets on a certain class of goods entering its country. Think of it as a way that nations prevent their domestic markets from being swamped by cheap overseas imports which would ruin their economy. Only when you are shipping within a trading bloc or where a free trade agreement is in place do these duties not apply. However, they are not taxes. Any item you ship to a customer overseas may also be liable to a local sales tax, too, which will have to be charged.
Items Exportation Rules
You must make it clear that this tax has been applied if you are selling an item for export on your sales invoice or it may be applied again locally. Remember, also, that excise fees are not the same as customs duty. Excise is the term reserved for certain classes of goods, usually cigarettes, alcoholic drinks and certain types of fuel. Finally, customs fees are not the same as duties either.
They are usually charged at a flat rate for processing your shipment rather than as a proportion of the value of the goods you are sending.
What Is De Minimus In Terms of Customs Duty?
It might sound technical but de minimus is incredibly important to know about if you are shipping an item or two overseas which has a relatively low value. Under international de minimus rules, you can send items beneath a certain sales value without having to worry about customs duty at all. In other words, certain low-value items are exempt from all the associated paperwork.
Minimus Rates in Other Countries
The trouble is that each country sets its own de minimus rates. In the UK, for example, it is only £15. However, you can ship to the United States without duty being applied so long as it is less than $800 in value. In Australia, the rate is AU$1,000. Some countries – such as Indonesia, for example – set their de minimus rate in US dollars. In that country, the rate is a mere $50.
What Is the FOB Value of My Goods?
FOB is an abbreviation that simply stands for Free On Board. Essentially, this is the value of your shipment, in terms of its sales cost, added to the cost of shipping it and ensuring it during transit. All of the costs associated with moving and handling your item must be included to work out a FOB for customs officials which are another good reason to use a professional moving and handling company to work it out for you.
Why Do you Need a FOB?
Why you need a FOB value is because any local sales tax that might apply to your shipment will be worked out on the whole FOB value, not just the value of your sale. Furthermore, importation duty is only calculated once this has been completed. As you can see, the costs consequently soon mount up. This is especially so if you happen to be shipping to an international territory where the customs charges are relatively high, let alone what you need to pay out for in terms of customs duty.
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When shipping overseas, establishing the cost of the shipment is just as important as knowing the sales value of the items you are sending in order to make a full customs declaration. Therefore, obtaining the services of a removals company with experience in international shipping can be a big advantage even if you work out your declaration for yourself. Nevertheless, by completing our handy online form, you can obtain competitive quotations from removals businesses, many of which will be able to undertake the necessary customs duty declaration work on your behalf.
