TAX | DE MINIMIS | ADMISSIBILITY | PROHIBITED/RESTRICTED | CUSTOMS VALUATION | SURCHARGES

De Minimis Thresholds, Tax Rates, Customs Valuation Methods & Calculation, Customs & Carrier Surcharges, Admissibility, and Prohibited Restricted Commodities.

Please note that import tax rates, de minimis thresholds, admissibility requirements, customs valuation  methods, prohibited & restricted commodity regulations, customs, and carrier surcharges are dynamic and may change without advance notice. Current regulations and rates for each topic must be queried and confirmed prior to shipment using the indicated official sources.

FlavorCloud recommends that our merchants use these tools as a reference and then verify at the national/provincial level and/or with your commodity- and country-specific expert before shipping.

† FOB — “Free on Board” – Incoterm and basis method for Customs Valuation 
§ GBP — Great Britain Pound Sterling
√CIF – “Cost of Goods + Insurance + Freight” – Incoterm and basis method for Customs Valuation

CUSTOMS SURCHARGES***

***Customs and Carrier Surcharges are carrier, destination, and time specific. Items in orange apply to all consignments, and other items applied ad hoc, if applicable. Surcharges are dynamic and subject to frequent change by carriers without prior notice.

CARRIER SURCHARGES***

***Customs and Carrier Surcharges are carrier, destination, and time specific. Items in orange apply to all consignments, and other items applied ad hoc, if applicable. Surcharges are dynamic and subject to frequent change by carriers without prior notice.

United Kingdom Notes

Import Duty/Tax De Minimis

In the United Kingdom, His Majesty’s Revenue and Customs (“HMRC”) has set separate duty and tax (VAT) de minimis threshold for imports: £135 for duty and £0 for VAT. These thresholds are FOB (see FOB note below), meaning that it only includes the customs value of your goods, and excludes any shipping charges. The customs value is generally the sales price- the actual price paid by the buyer, or would otherwise normally be paid, to import the goods. Please see FlavorCloud’s Guide to Declared Value & Customs Valuation for further education on customs valuation.

As of January 1, 2021, all imports, regardless of value, are subject to import VAT. There is an exception for gifts, but this does not apply to shipments sent via FlavorCloud (see Gifts notes below).

• If the value of the goods on your shipment to the UK is under £135 (and is not ineligible due to excise tax/duty), there is no import duty payable at the time of import.
• If the value of the goods on your shipment to the UK is over, import duty is applied at the commodity-specific rate and is payable at the time of import. You can check duty rates for your commodities using the UK Integrated Online Tariff tool.
• Import VAT is applied at the commodity-specific rate to all imports and is payable at the time of import.

FOB Customs Valuation Calculation Method Note

Unlike CIF, the customs valuation process does not include freight or insurance costs in transporting goods from the place of export to the destination when calculating customs value. However, any inland freight or insurance costs incurred by the purchaser/importer before the goods leave the place of export must be included in the customs value.

Gifts

https://www.gov.uk/goods-sent-from-abroad/gifts

HMRC has published the following specific thresholds that need to be met for your shipment to qualify as a gift:

• “described as gifts on the customs declaration
• for a birthday, anniversary, or other occasions
• bought and sent between individuals (not companies)
• intended for personal use.”

The £39 FOB limit only applies to gifts intended for personal use, bought, and sent between individuals, for a specific occasion. Even though the buyer may be a private individual, shipments through FlavorCloud include a business venture/company selling the goods and therefore do not meet the criteria HMRC established. As the established criteria are not met, shipments through FlavorCloud do not qualify for the benefit of a £39 limit for gifts

Excise Duty/Tax and De Minimis

Commodities subject to excise duty and/or excise tax do not qualify for de minimis duty-/tax- free importation, regardless of their value. Please review the Excise Duty and Excise Tax section below.

United Kingdom Customs Valuation Methods

General United Kingdom Customs Valuation

https://www.gov.uk/government/collections/working-out-the-customs-value-of-your-imported-goods
Import Duty and Import VAT are calculated CIF in the UK (See CIF note below)

Duty

https://www.gov.uk/goods-sent-from-abroad/tax-and-duty
https://www.gov.uk/guidance/paying-vat-and-duties-on-imports?step-by-step-nav=8a543f4b-afb7-4591-bbfc-2eec52ab96c2
https://www.gov.uk/guidance/tariffs-on-goods-imported-into-the-uk
CIF x Duty Rate (See CIF note below)

Tax (VAT)

https://www.gov.uk/goods-sent-from-abroad/tax-and-duty
https://www.gov.uk/guidance/working-out-the-vat-value-using-the-customs-value-of-the-imported-goods
CIF + Duty Amount x Tax Rate (See CIF note below)

CIF Customs Valuation Calculation Method Note

CIF = Cost of Goods + Insurance + Freight
+ Cost of Goods is the Transaction Value [actual price paid or otherwise would be payable by the buyer to the seller for the goods]
+ Insurance costs
+ Shipping charges

• Example: goods are being sold to the importer at $200 + $5 being paid for insurance + $20 for shipping by the buyer, then CIF value is $225 (converted to local currency by Customs).
  • If the duty rate is 10%, then the duty amount for this import would be $22.50
  • If tax rate is 25%, then tax amount would be $61.88 [CIF + Duty = $247.50 x 25% tax]

Import Tax (VAT)

Overview of the different import VAT rates in the UK: Standard Rate (20%), Reduced Rate (5%), and Zero Rate (0%)
https://www.gov.uk/vat-rates

Overview of VAT rates by product category, VAT conditions, and HMRC VAT notices
https://www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services

Import Tax (VAT) Exemptions

Examples are provided as a reference only. Please refer to the relevant legislation for full description and stipulations to determine if your products qualify for VAT exemptions: https://www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services.

Excise Duty

Excise Duty is a supplementary tariff applied to specific products in addition to any duty and tax already applied to the import.

In the UK, excise duty generally is imposed upon tobacco and products. Please consult current regulations to confirm if your goods are subject to excise duty prior to shipping.

https://www.gov.uk/tax-on-shopping/alcohol-tobacco

Customs and Carrier Surcharges

***Customs and Carrier Surcharges are carrier, destination, and time specific. Items in orange apply to all consignments, and other items applied ad hoc, if applicable. Surcharges are dynamic and subject to frequent change by carriers without prior notice.

Admissibility (Prohibited and Restricted Goods) Background

Many products are subject to specific import requirements such as import licenses, permits, certifications, inspections, product/business, and other labeling requirements. These requirements are generally referred to as admissibility or OGA/OGD/PGA requirements (“Other Governmental Agency” / (“Other Governmental Departments” / “Partner Governmental Agency”). In the United Kingdom, these are referred to as Prohibited and Restricted Goods and are administered by several federal agencies. While some Prohibited Goods may be imported after specific conditions and/or requirements are met (import licenses/permits, testing, etc.), other goods may not be imported under any circumstances.

These admissibility requirements are subject to frequent change without advance notice and are entirely dependent on the commodity (HTS code), country of origin, country of import, and time of import. It is advised to regularly verify and validate admissibility requirements to ensure there are no import delays and to ensure the proper administrative steps are adhered to prior to shipment. Certain products are prohibited from being imported unless the relevant requirements/obligations are met. Significant fines, fees, delays, and storage charges can be assessed when these regulations are not followed. FlavorCloud always recommends that our merchants verify import requirements at the national and local levels and/or with your commodity- and country-specific expert before shipping.

Admissibility (Prohibited and Restricted Goods) Resources

Certain commodities are prohibited or restricted depending on the country of import, country of origin, and the specific point at which the goods will be imported into the UK. Import requirements for your products can be assessed in the UK by consulting HMRC’s UK Trade Tariff: import prohibitions and restrictions. This repository offers interactive query functionality to search for impacted commodities by category, description, key words, as well as a list of items to check for potential import requirements.

An indication of impacted commodities is shown below. A current overview, along with direct links to the government department/agency responsible for ensuring that prohibited and controlled goods are not illegally imported into the UK, is available using this official resource:

https://www.gov.uk/government/publications/uk-trade-tariff-import-prohibitions-and-restrictions/uk-trade-tariff-import-prohibitions-and-restrictions

• Animals and Animal products
• Plants and Plant products
• High Risk Food
• Human Medicine
• Controlled Drugs
• Precursor Chemicals
• Hazardous Chemicals
• Guns, Knives, Swords, and Other Weapons

Labelling, Marking, and Marketing Requirements

In addition to prohibited and restricted commodities, certain products- usually food products and manufactured goods- imported into the UK are subject to labeling, marking, and marketing requirements. Please consult the following resource to confirm if your products are subject to UK Conformity Assessment (UKCA) requirements:
https://www.gov.uk/guidance/placing-manufactured-goods-on-the-market-in-great-britain
https://www.gov.uk/guidance/ukca-marking-roles-and-responsibilities#importers

Product Safety Requirements

https://www.gov.uk/guidance/product-safety-for-businesses-a-to-z-of-industry-guidance

Cosmetics

Comprehensive guide and resource repository for importing cosmetics into the UK: https://www.gov.uk/guidance/making-cosmetic-products-available-to-consumers-in-great-britain

https://www.gov.uk/guidance/product-safety-for-businesses-a-to-z-of-industry-guidance#cosmetics

Supplements (Dietary, Health, Medical, etc.) and Food Products

Import classification of vitamins, supplements, and herbal medicines
https://www.gov.uk/guidance/classifying-vitamins-supplements-and-herbal-medicines-for-import-and-export

Food Supplement Use and Labelling
https://www.gov.uk/government/publications/food-supplements-guidance-and-faqs

UK Food Standards Agency  – Importing food supplements and health foods guidance on labeling, contaminants, cautions, and other resources
https://www.food.gov.uk/business-guidance/importing-food-supplements-and-health-foods

Guidance and requirements on high-risk food and restricted foodstuffs:
https://www.food.gov.uk/business-guidance/importing-high-risk-food-and-feed-into-gb

Food Products and Beverages
https://www.gov.uk/guidance/importing-live-animals-or-animal-products-from-non-eu-countries (from outside EU)
https://www.gov.uk/guidance/import-or-move-food-and-drink-from-the-eu-and-northern-ireland-to-great-britain (from EU)

Medical Devices

https://www.gov.uk/guidance/regulating-medical-devices-in-the-uk

Conservation Controls and Endangered Species
Convention on International Trade in Endangered Species of Wild Fauna and Flora (‘CITES”)
https://www.gov.uk/guidance/cites-imports-and-exports.

These Prohibited and Restricted Goods Resources are published nationally, are non-exhaustive, and subject to a detailed legal notice. FlavorCloud always recommends our merchants use these tools as a reference and then verify at the national/local level and/or with your commodity- and country-specific expert prior to shipping.