How to start exporting… outside the EU
So we've looked already at how to get started exporting within the EU – but what about exporting with companies outside the EU? Markets such as America, China and India are absolutely huge, and can be well worth expanding into. Here’s our guide on getting started on exporting outside the EU.
The basics
Countries outside of the EU are known as ‘third countries’, and in order to export to them you must be aware of any appropriate licenses you need, and you must make export declarations to customs.
You must ensure that VAT, import taxes and duty (custom fees) are paid in the destination country where necessary, and ensure that you follow transport procedures (or that the importing person or company does).
Just as sales to another country within the EU are called ‘dispatches’, sales to a country outside the EU are called ‘exports’. And you must have a commodity code for anything you export or import to and from the UK.
Taxes to be aware of
Do I need to pay VAT?
Unless you’re exporting outside of the EU, VAT isn’t charged – it’s a tax on goods used in the EU. If you keep evidence of the export (such as invoices, shipping receipts, etc) and supply it within three months from either the day you send the goods to your customer or the day you receive payment for them (whichever is earliest) you can zero-rate the sale, aka, pay no tax.
As with exporting within the UK, it’s important that you keep all proof of export for six years, and show it to HMRC if asked. Bear in mind that if the customer asks for it to be delivered to the UK it can’t be zero-rated.
When a third country receives your goods, they may charge duty (customs fees), or additional fees. Fees vary from country to country – find out more about specific countries with this guide.
Common Agricultural Policy
Think you don’t need to think about this because you’re not exporting products which strike you as agricultural? Think again! If you’re exporting a foodstuff, even if processed, you may well need a licence, or have to pay a levy (or receive a refund, which is nicer). Find out if you need a license or to pay here. If you’re not sure what to do about your processed food items, this document is useful.
Origin rules
Even when your customer is responsible for paying custom fees in the destination country, it’s your responsibility to provide correct documentation. This is so you can prove where it’s from - in some countries your products might be classed as duty free or have a reduced rate, so you save money. You might be noticing a common theme by this point: SAVE YOUR DOCUMENTATION. ALL OF IT. LOOK AFTER IT LIKE YOUR FIRSTBORN.
The Tariff
The Integrated Tariff of the UK (otherwise known as the Tariff) is the official HMRC guide to the taxes and duty you need to know about when exporting. It has all the codes and customs requirements you need for import and export paperwork. There is a really handy tool that can help you figure out what you need to be doing and what codes you need to use – find it here.
Licences and controls
Exports of some goods may require special licences, or to comply with specific regulations – and if they pass through more than one country, you’re likely to need a licence for each one.
You’re probably not surprised to learn that weapons and goods or technologies with a potential military use may require an export licence from the Department of Business, Innovation and Skills. As mentioned above, agricultural products and foods will require a license, and live animals, meats and plants will need licensing and health inspection – find out more here.
To find out if your goods need a license, check here.
Export declarations
When you permanently export goods out of the EU, you must submit an electronic export declaration via the National Export System (NES).
The NES allows you to send documentation to HMRC electronically, which is awesome, as it makes exporting much quicker. The NES is part of the CHIEF system (Customs Handling of Import and Export Freight).
To make the declaration, you’ll need an Economic Operator Registration Identification number and to register for NES, which you can access through email, web form, and even a paper declaration in exceptional circumstances. Declaring allows HMRC to check that you’re complying with export controls.
Trades have to classify their goods as part of the declaration, including a commodity code and a Customs Procedure Code, which basically just gives information about the exports’ movements. You can find this in the Tariff, above.
If you’re taking commercial goods out of the EU in your luggage, you have to declare these goods electronically as proof of export. And if exporting by post, you’ll have to fill out paperwork depending on the goods’ value – find out more here.
Moving goods through the EU to outside the EU
How exports moving through the EU to outside the EU are dealt with depends on their final destination. You have to complete an export declaration, controls and licensing depend on the final destination, and goods can be zero-rated for VAT – as long as proof of the departure of the goods from the EU is supplied. Goods have to be accompanied by an EAD, a document which you can find out more about here.
You must complete an export declaration, so that indirect exports are marked ‘Arrived’ on CHIEF before they leave the EU – otherwise you won’t get permission to progress, and your shipment will be rejected or returned. Again, do this electronically via the NES.
For safety and security reasons, there are minimum time limits for filing export declarations ahead of departure, and these are:
- for ‘deep sea’ containerised cargo, at least 24 hours before the goods are loaded
- for ‘short sea’ containerised cargo, at least 2 hours before leaving the port
- for air traffic, at least 30 minutes before departure from an airport
- for rail and inland waters traffic, at least 2 hours before departure
- for road traffic, at least 1 hour before departure
- for supplies for ships and aircraft at least 15 minutes before departure
Duty reliefs
Depending on item, destination and other factors, you might be entitled to a duty relief discount or rebate. Find out whether you can benefit here – there are lots of different schemes available.
Preferential trade agreements
Some non-EU countries have preferential trade agreements in place with the EU, which can mean you pay less duty. To benefit from this you need to provide your customer with proof of the origin of the products. To find out more about how trade preferences work, have a read of this.
Further information
- There can be a truly bewildering array of documents to get your head around when exporting. Find out more information about the ones you might need here.
- Confused by something? Try asking a UKTI adviser – it’s free.
