Import from the USA: Everything to know about bringing goods from the US into the UK

For generations, the US and the UK have been strong economic partners. Businesses on both sides have benefitted greatly from this alliance in terms of resources and talent share.

If you’re a business owner in the UK, chances are the US is one of your go-to international destinations for product sourcing. And quite rightly so. With the US-UK relationship, there’s a clear pathway for bringing goods into the UK.

However, in spite of the economic clarity and straightforwardness, importing goods from the US isn’t always an easy process. With the amount of paperwork and intermediaries involved, the entire process can be draining and overwhelming for business owners.

That’s why we’ve created this post to simplify certain aspects of the process.

Importing from the US to the UK: Finding a supplier or business partner

The first step of the process is finding an individual or brand in the US with whom you can strike a partnership. This person or company will be your go-to guy anytime you need to source for a certain type of product in the US.

The internet as we know it is crawling with many tales of cybercrimes and internet fraud. To avoid falling into the hands of impostors, you should travel down to the US to strike your deals. Many people search for product suppliers or business associates online, but we always recommend travelling to the US to strike deals in person.

Besides the issue of scams, there’s also the logistics part, which you may not really understand unless you go out there.

Luckily, the ESTA USA has made it extremely easy for UK business owners to travel to the US and get their businesses done. You can apply for an ESTA travel permit and get an approval within three days. And with your permit, you can stay in the US for up to 90 days. To be frank, that’s a lot of time to meet and build strong partnerships with US suppliers and businesses.

Once you’re certain you’ve found a good supplier, the next thing is to head back to the UK to get started with your importation. Mind you; your ESTA application remains valid for a period of two years. So, if you have a reason to visit your supplier in the future, you can use the same ESTA USA validity to return to the US.

Importing from the USA into the UK: Things to Know and Consider

Before you start thinking about bringing goods from the US into the UK, there are things you need to get familiar with. These include:

This is a code used by the Customs to identify imported goods. The code helps them calculate the right amount of tax and import duty due to be paid by the importer.

To understand what commodity codes to assign to your products, you can look up the UK government website. Therein, you will find commodity codes for different products

It is important to find out the commodity code for your goods because:

(A) It helps you label your goods properly to avoid mix-up

(B) It helps you find out whether there are any import duty waivers or VAT waivers for your goods

(C) It aids in the complete declaration of all you’re bringing in.

You’ll need to obtain a license for certain products before bringing them into the UK. These include products like explosives, livestock, medicine, pharmaceuticals, chemicals, art, tech, or hazardous materials.

You need the Economic Operators Registration and Identification number to bring goods from anywhere into the UK. You get this number by registering online with the UK tax authorities.

Tax Details: How much does it cost to import goods from the US into the UK?

Well, that depends on the quantity and type of goods you’re bringing in. So, as much as we’ll like to give you a number, we just can’t.

Besides, calculating the import taxes on UK importation can sometimes be complicated, which is why many business owners hire freight forwarders to help them calculate the overall cost of importation.

Can’t I get a rough estimation of how much I can expect to pay on taxes and duties?

Hmmm… Ok.

First of all, the UK customs department calculates import taxes and duties. And they base their calculations on the commodity codes assigned to your goods. So, if you’ve retrieved the commodity codes for your goods from the UK government website, as earlier discussed, you can get a rough idea of what your import duty will be.

Generally speaking, though, importation of clothing apparel from the US usually attracts duty at around 12%±. For vehicles (e.g., personal cars), duty can be 10% (give or take), while for electronics, you may be lucky not to pay any duty at all.

Is that all the cost involved?

Errrmmm… Not exactly. Besides import duty, you’ll also need to pay VAT. Known as Value Added Tax, VAT is usually charged on all the goods you’re bringing in.

So, if you’re bringing plenty of wares, your VAT will be calculated based on:

The sum of:

(Cost of goods + Cost of transport + Import duty paid) X 0.2

The 0.2 factor is the prevailing UK VAT rate, which is 20% as of writing.

Calculating duty and VAT for a Hypothetical US-to-UK import process

Please note that we’ve already assumed that the costs have been converted from dollars to pounds for the above illustration. In your case, you’ll need to do the conversion yourself. 

Conclusion

If you’re a UK business owner sourcing products internationally, the US is definitely a good place to look. The US is the third-largest import source into the UK, only behind Germany and China. With the clear importation pathway between the two countries, you shouldn’t have any glitches getting your products into the UK.

Interesting Related Article: “Importing Anything From Another Country? Here Are The Stages You Should Know“