smallbusiness.co.uk: Helping your business think big

Handled well, importing can make a significant contribution to business success. For some businesses, using overseas suppliers is a key part of controlling costs. Others have built their whole business on the unique products importing allows them to provide.

Importing products is relatively straight forward once you have sthe basics in place. Ensure your delivery logistics are resolved such as confirming if the buying contract is based on delivery to yourself or are you responsible for collecting products from the manufacturer. If the latter is the case you will need to organise a contract with a transport or courier company and agree terms.

Payment is another area you need to finalise before you begin. When must the supplier be paid, and is there a retention option? What currency will your supplier be expecting to be paid in? Most likely this will be in either Canadian or US dollars but the manufacturer may have UK or European banking which may allow you to pay in Pounds Sterling or Euros. You may want to consider forward purchasing currency or hedging to minimise translation losses as you exchange pound sterling for another currency.

Who is responsible for import duty, how is it to be paid and when? The import duty rate will be dependent upon the nature of the products you plan to import. It is also worth remembering that any VAT liability will be calculated on the cost of the goods plus duty.
HMRC have created a basic guide to help anyone get started in importing or exporting. Go to www.hmrc.gov.uk and follow the links to importing and exporting. This will address the above points as well as point you in the right direction for advice and support.

Business Link for London have a factsheet to help people who have decided to import to develop an import strategy. An effective import strategy must take into account all the factors you would consider in any form of purchasing, and the steps you should take to ensure that everything runs smoothly. Go to www.businesslink4london.com and follow the links to Importing and Exporting.