This customs value is the basis to calculate the customs duty and Import VAT owed. This correct amount to pay is what you need to include within the pricing of your stock to ensure a margin.
Most of the time we see companies use the sales price (transactional value) for customs valuation – which is the first method of valuation (of six). However, consider:
- What about imports where there is no sale (i.e., samples, items for testing, import for call-off stock which is “sold” when dispatched in country, etc)?
- Are you including “free gifts” with purchase? Or adding in samples to try? For example, in gift sets.
- Does transfer pricing affect your customs value?
- What is included within that sales price other than the value of the stock (i.e., shipping, proceeds for resale, etc)?
- Do you provide intellectual property or product to have your stock manufactured?
- Are there commissions, royalties, or licence fees?
- Are there compliant opportunities to reduce the customs value?
You cannot manipulate invoicing or your customs value just to pay less – you must analyse the regulations and apply them correctly to determine whether there is an opportunity!
It’s important to get this right as it impacts your pricing determination as well as is your legal obligation to declare the correct value. Stay on Santa’s nice list and check if you can make savings. For more information….contact our experts 0161 813 1987 or email info@customsconnect.co.uk