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Exporting goods from the UK can be complex with lots of different steps involved, so understanding the export process is crucial if you’re considering international trade. To help, we’ve put together this guide to outline the key things to think about.
 

Is exporting to other countries worthwhile?

What is the process for exporting from the UK?

What taxes will I pay if I export from the UK to abroad?

Every business is different, so it’s important to research what exporting opportunities are available and how worthwhile they might be to your business. For example:

Answering these types of questions will help you understand how exporting from the UK to abroad will actually look for your particular business. It can help you decide whether this is something worth pursuing for what you could expect to get in return.

Selling items abroad can open up new opportunities for a business, although there are lots of rules and requirements to be aware of first. We cover the main points below.

Apply for an Economic Operator Registration and Identification (EORI) number

An EORI (Economic Operator Registration and Identification) number is a unique reference which identifies the business as having permission to move goods between Great Britain (England, Scotland, Wales) and anywhere else.

An EORI is used by customs authorities to track and manage the transactions that go on across borders.

 
All businesses involved in international trade must have an EORI number, and export documents must show two EORI numbers:

This means you’ll need the EU EORI numbers of European businesses that you export to. If you’re exporting goods to your branch or warehouse in the EU, you’ll need your own EU EORI number as well as a UK one.

Classify goods with commodity codes

Your buyer must pay customs duties and tax on the goods that you export to them, so your export documents must include commodity codes to make sure they pay the right amount.

These codes describe what goods you are exporting. You can check which commodity codes to use for classifying goods with the government’s trade tariff checker.

Export licences

You might need export licences depending on the goods that you export. There are also rules for how some types of goods are transported, so check if you need an export licence.

Get your legal and regulatory compliance nailed down

Part of your research should include familiarising yourself with export regulations and compliance requirements for the target country or region you’re going for. For instance, obtaining necessary licenses, permits and certifications.

Find out if your product is subject to export controls or restrictions too, such as dual-use goods or military equipment.

Decide your pricing and payment methods

Knowing what to charge can be enough of a balancing act in a market that you already know, so setting your pricing in a less familiar territory can be particularly tricky.

Along with the usual analysis of production costs and research into market demand and competitor pricing, you’ll have additional costs to consider – such as shipping or excise duty.

It’s also a good idea to decide on the payment methods you’re willing to accept, such as letters of credit, bank transfers, or online payment platforms. Don’t forget about currency fluctuations and exchange rate risks when pricing your products too.

If you’re selling through an online marketplace such as Etsy then a lot of these calculations will be managed for you (just don’t forget about platform fees!).

Organise your logistics and shipping

Once you know which country, or countries, you want to export to you’ll need to arrange the transportation and logistics. This may include choosing a freight forwarder or shipping company to handle transportation, customs clearance and delivery for you.

An important next step is to determine the most cost-effective and efficient mode of transportation, whether by sea, air, road or rail. Make sure your goods are properly packaged and labelled, not only to avoid damage but also because the packaging will need to comply with shipping regulations.

Prepare your customs documentation

This is likely to include commercial invoices, packing lists, export licenses and certificates of origin. You don’t want any delays or fines, so make sure everything is complete and accurate before shipping. It’s worth choosing a freight forwarder or customs broker that you can work closely with to navigate customs procedures and requirements properly. Don’t go it alone!

Submit an export declaration

When exporting, you will need to submit an export declaration to HMRC using the National Export System (NES) or other approved electronic systems. You’ll need to give details about the goods you’re exporting, including their value, quantity, and destination.

Be clear on tariffs and duties

Check the applicable tariffs, taxes, and duties for your exports in the target market and factor them into your costs. Research any preferential trade agreements or free trade agreements that may reduce or cut out tariffs for your products too.

Get the right insurance

It’s a grim thought but if your exported goods are lost, damaged or stolen in transit you can easily lose thousands of pounds. That’s why many companies take out cargo insurance, marine insurance or export credit insurance to help mitigate the financial hit if the worst was to happen.
 

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UK businesses that export goods may be subject to various taxes and duties. Some of the key taxes and duties include:

Value Added Tax (VAT)

Export and import VAT can be very complicated! In some cases, it can depend on where you move goods to and from, or the shipment’s value (which you’ll need documentation for). The process might be simpler if you sell using an online marketplace (such as eBay or Amazon) which will perform these calculations for you.

Excise Duty

This applies to specific goods like alcohol, tobacco, and certain types of fuel. If it applies to your business, you can read up on this on the Gov.uk website.

Tax on your profits

As a registered business you’ll normally need to pay tax on the profits you make, and the money you make from exporting is another source of income that you will need to account for. The type of tax you pay depends on the business structure you operate, such as Corporation Tax if you run a limited company.

Environmental taxes

Depending on the nature of your business, you might need to pay certain environmental taxes such as the Climate Change Levy. Again, it’s worth getting professional advice if you’re not sure, as well as taking a look at the Gov.uk website.

Import VAT and customs duties in destination country

You should also be aware of any taxes and duties your destination country imposes. These vary widely depending on the country and the type of goods being exported.
 
Our friendly team are experienced in a range of accounting issues related to this subject and will be happy to help. Take a look at all the accounting services we offer or call us on 020 3355 4047. Alternatively, feel free to get an instant online quote.

About The Author

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.

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