Now one of the world’s biggest economies, China is the world’s largest exporter and the UK’s third largest import partner. China’s unrivalled ability to build and manufacture large quantities of goods quickly and cheaply means demand is only increasing for freight forwarding services for importing from China. Products typically exported from China include:
- Computers and electrical items
- Furniture and household items
- Construction materials and prefabricated buildings
- Clothing, footwear and accessories
- Medical equipment
It should come as no surprise that nine of the world’s top ten container ports are in China and the Far East. The busiest container port in the world, Shanghai, handles over 37 million TEUs (Twenty-foot equivalent unit) every year and with consecutive year on year growth, the region shows no signs of slowing down.
As China is outside the European Union, as a commercial importer, you have certain obligations. Even if you’re a seasoned importer from the EU, it’s important you familiarise yourself with the documentation you need to import from China and clearing customs goods without any issues.
1) Use the correct commodity code
Find the right commodity code for the products you’re importing. You can locate these by using the UK Government Trade Tariff, where you can look up commodity codes, duty and VAT rates. Commodity codes are required to classify your goods so you can:
- complete declarations and other paperwork
- find out if there is any duty or VAT to pay
- check if there are any duty reliefs
If you’re not sure what commodity code is right for your goods, you can email HMRC who will advise you on how to classify your goods. Simply send an email to email@example.com and include a full description of your product – what it is made from, its use and function, and how it’s presented or packaged.
2) Pay the required rate of VAT
When importing from China, importers must pay VAT on top of the total sum of the Customs Value and the Import Duty. The Customs Value is the total cost of the products, including any development costs you’ve paid to your supplier, the cost of shipping to the UK and any import duty.
Ensure you pay any VAT that is due. If you’re VAT registered, you must pay the VAT, but you can claim it back through your standard VAT return. You’ll usually receive a C79 certificate from HMRC to prove you’ve paid import VAT.
3) Register with the CHIEF system to declare your goods
The Customs Handling of Import and Export Freight (CHIEF) system allows importers, exporters and freight forwarders to input customs information electronically, calculating payable duties and taxes, and checking for errors automatically. CHIEF also identifies which consignments require examination of goods or documentation, allowing faster entry for low-risk goods.
If your freight forwarder is handling your shipment for you, they should have this covered, but if you’re managing this yourself make sure you register with CHIEF and declare the goods.
4) Pay any duty required
The majority of goods imported from China to the UK will be subject to the full rate of Customs duty. The customs duty is sometimes referred to as import duty, customs tariff, import tax and import tariff, and is a tax collected on some exports by China’s customs authorities.
Some goods manufactured in China may be subject to anti-dumping measures and could require payment of high additional duties, so be sure to double check.
5) Check your goods aren’t banned from being imported from China to the UK or require an import licence
Some goods are subject to import controls, so it’s important to check if any apply to the goods you need to ship. There are currently three types of controls:
- Bans – no import is allowed
- Quotas – the volume of goods is restricted
- Surveillance – the import of goods is monitored with licences
If your goods fall under the surveillance control, make sure you obtain a licence before trying to import your goods from China. Find out more about if you need a licence and how to get one from the Department for International Trade. Some items currently prohibited from being importing from China include:
- Animal skins / Furs
- Biological substances Category B, UN3373
- Dangerous goods, hazardous or combustible materials
- Firearms, or parts of
- Items that could be used as weapons
- Military equipment
- Precious metals & stones
7) Make sure you hold an Economic Operator Registration Identification (EORI number)
An EORI number is used by UK Customs to keep a record of imported and exported goods and is required by all businesses within the EU when importing commercial cargo from China. This number is needed for a commercial invoice, when submitting an electronic export declaration, and when using the CHIEF system. If you are using a courier or freight forwarder, they will need the EORI number too. It’s easy to apply for an EORI number online and usually, takes three working days to receive.
8) Organise a Customs Registration (CR) number and Power of Attorney (POA)
When importing from China, you’ll need a CR number and POA for non-document goods (except personal effects), regardless of their value. All importers and exporters in China have to register with customs authorities for an importer or exporter CR Number that must be detailed on the commercial invoice to clear customs.
A POA is a letter of authority given by the sender to the freight forwarding company to clear the shipment through customs on their behalf.
9) Include full details on all the labels and invoices
All the labels and invoices you use should contain details of the sender and receiver, the quantity of the goods, their value, the commodity codes and a complete description of the contents. Ensure the invoice is typed and don’t make any manual changes.
If you’re using a freight forwarding company, they’ll be able to advise you on all of the above, making the process of importing from China simple and hassle free. At Good Logistics, we have staff on the ground in Shanghai and provide a first class service at origin and destination. Whether it’s Ex Works, FOB or CIF, we offer a full turn-key service to handle FCL and LCL imports from China and the Far East from all the main ports.
Whether you’re a first-time importer, or you’re just looking for a better service from your freight forwarder, we’d love to hear from you to talk about how we can help make importing from China simple.