By Fredrik Grönkvist
About to start importing products from China to the UK? Eager to know how the ‘Brexit’ will affect your business?
Read this guide to learn what you must know about product regulations, labelling requirements, import duties and VAT in the United Kingdom.
Important Note: As of now, this guide applies to importers in all EU member states. Thus, the UK is interchangeable with any other EU country. That is, of course, until we create an updated version of this country guide in 2018.
British Product Safety Regulation
As the United Kingdom is (still) part of the European Union, EU wide standards and directives are mandatory.
Below follows an overview:
REACH regulates chemicals in all consumer products sold within the United Kingdom, and all other EU member states.
Products covered by REACH includes, but is not limited to, the following:
- Clothing and textiles
- Product packaging
Importers don’t need keep track of which substances are regulated (new chemicals are added regularly).
Instead, you only need to refer to “REACH”, when communicating with both suppliers and testing companies.
While REACH compliance is always mandatory – third party testing is not. That said, a non-compliant product must be removed from the market.
The only way to be sure that your product does comply, is by submitting batch samples to a laboratory.
CE marking is mandatory for many product categories sold in the United Kingdom, including the, but not limited to, following:
- Medical devices
- Construction products
There is not a single “CE marking directive”. Instead, there are more than 25 different directives that all requires CE marking.
One or more CE marking directives may apply to one single product. Take a Bluetooth speaker, for example, which must comply with the following:
- R&TTE Directive
- Low Voltage Directive (LVD) Included in R&TTE
- EMC Directive (EMCD) Included in R&TTE
The CE mark itself is not enough to ensure compliance. If you are importing products from China to the United Kingdom that must be CE marked, you need to gather a full set of documents:
- Declaration of Conformity
- Test reports (although third party testing is normally not mandatory)
- Product photos, design drawings and BoM (Bill of Material)
- List of applicable directives and standards
- Risk assessment
Don’t expect much help from your supplier, as it’s not their job to ensure compliance with UK regulations.
RoHS restricts heavy metals, such as cadmium and lead, in electrical components and solder. Compliance is mandatory when importing electronics to the United Kingdom, and all other EU member states.
EN 71 is a toy safety directive. In fact, it’s part of the “CE marking directives”.
Compliance is mandatory for all toys, and often recommended by industry experts for all children’s products.
EN 71 is split up in more than 10 sub-parts, and covers chemical restrictions and physical properties (i.e., seams and sharp corners).
Food Contact Materials
Kitchen utensils and food packaging are regulated by Regulation (EC) No. 1935/2004.
UK based importers of FCM (Food contact material) products must issue a Declaration of Conformity, and are recommended to submit batch samples to a third party testing company.
British Labelling Requirements
As mentioned in this article, CE marking is mandatory for products that fall within one or more EU product directives.
The CE mark must be applied to the product unit, and its packaging.
WEEE marking is mandatory for electronics, and must be affixed to the product packaging.
The United Kingdom has a set of mandatory textiles labelling requirements, which covers the following:
- Fiber composition
- Care instructions
Most products imported from China to the United Kingdom are taxed by an import duty.
The import duty is normally paid upon arrival, either directly to the HM Revenue & Customs – or, through a freight forwarder.
You can click here to access the official UK database of all trade tariffs
The import duty is calculated as a percentage on top of the customs value:
Import Duty = Customs Value x X.X%
In the United Kingdom, and all other EU states, the customs value is normally based on the CF value, which includes the following:
- Product value (as paid to the supplier)
- Transportation cost to the United Kingdom (but not transportation costs within the UK or other EU states)
- Transportation insurance
The UK customs value may, depending on the situation, also include the following costs:
- Tooling costs (paid to the supplier)
- Design and other service fees (paid to the Chinese suppliers, but not domestic service providers)
- Product samples (paid to the supplier)
Value Added Tax (VAT)
The standard VAT rate in the United Kingdom is currently (2016) set at 20%.
When importing goods from China to the UK, VAT is paid to the HMRC – or through the freight forwarder – upon arrival.
The VAT rate is calculated on top of the sum of the Customs value and the import duty. Below follows an example:
VAT amount = 20% x (Customs Value + Import Duty)
Case Study: UK Import Duty and VAT Calculation
|Cost / Tax||Calculation (£)||Sum (£)|
|Customs Value (CIF)||1 x 20,000||£20,000|
|Import Duty (6.5%)||6.5% x 20,000||£1300|
|VAT (20%)||(20,000 + 1300) x 20%||£4260|
|Total||20,000 + 1300 + 4260||£25560|
The EORI (Economic Operator Registration and Identification) number is mandatory for all UK based importers.
You can apply for an EORI number directly on the HMRC website.
The EORI number application is free, and normally takes 2 to 4 working days. However, make sure to apply before you order products from Asia, including product samples.
Without an EORI number, the customs are likely to put a temporary hold on incoming shipments (both container cargo and product samples).
Hence, an “early” EORI number application can help you avoid delays.
Import Licenses and Permits
For most products, British importers don’t need any Import license or special permit. However, special requirements applies to products that fall within any of the following categories:
- Other medical products
- Agricultural products
- Live animals or plants
Hence, the average Amazon seller or Ecommerce companies don’t need to worry about obtaining any permit.
How will ‘Brexit’ affect product standards, customs duties and other import regulations?
We decided to put this article on hold until after the referendum – and here we are. The United Kingdom is set to leave the European Union.
The United Kingdom is fully integrated with the European Union, which has the following impact for importers:
- All EU product directives apply in the United Kingdom. As such, British importers can simply refer to well established EU standards and regulations.
- Import duty rates are harmonized throughout the EU. Hence, UK importers pay the same import duties as those based on other EU member states.
In addition, EU companies and individuals don’t need to pay import duties when buying products from UK sellers.
- VAT applies in all EU states, including the UK.
At the time of writing, it’s too early to say what this means for import businesses in the United Kingdom. The short term effect is felt by the rapid depreciation of the British Pound.
However, with at least 2 more years to go as an EU member state, the mid to long term prospects are still unclear.
That said, it is extremely unlikely that the United Kingdom would opt out of the EU product regulatory framework. The UK alone is too small of a market to support implementation of its own product standards.
In addition, the UK will most likely have access to the EU single market in the future, which means that customs duties and the VAT system will be aligned with the rest of Europe.
The more things change, the more they remain the same.
Fredrik Grönkvist is the co-founder of ScandinAsian Enterprise in Shanghai. Since 2010, he and his team have helped hundreds of companies worldwide, primarily in the EU and US, to develop and manufacture products in China. He is also the main contributor on www.chinaimportal.com/, a leading knowledge base for small- to medium-sized enterprises importing from Asia. For further questions, you can contact him on www.chinaimportal.com/contact-us/.