Japan once dominated the world's electronics industry. The value of production in 1990 was almost £97 billion. Since then, emerging economies such as South Korea have challenged this dominance. Japanese electronics makers now focus on high-end products that are unique from those of their competitors. To import such electronics from Japan to the UK requires an understanding of issues such as sales contracts, international payment mechanisms, logistics, import duty, value added tax (VAT) and relevant paperwork.
- Skill level:
- Moderately Challenging
Do not try to negotiate a sales deal with a Japanese electronics company under the terms of the CISG (Contracts for International Sales of Goods), a convention sponsored by the United Nations. Japan is a signatory to the CISG but the UK is one of the few countries that is not. Instead, speak to a commercial law solicitor about a contract drawn up under English common law.
Arrange a means of sending money to Japan to pay for the electronics. Specialist companies, operating in partnership with banks, can transfer money online or by phone. Transactions usually take between one and four days.
Contact the Baltic Exchange in London to arrange for a shipbroker to organise the carriage of the electronics from Japan to the UK and the insurance. Alternatively, speak to air companies that handle cargo from Japan. An online air company directory can provide contact details.
Calculate the amount of import duty payable on the electronics. Individuals and companies must pay duty on electronics imported from Japan when the value of the goods is above a threshold amount. This amount is relatively low. The value of the goods is the cost of the products plus shipping and insurance expenses.
Calculate the value added tax (VAT) for the electronics. The percentage of VAT payable is the same as the standard UK rate in force at the time of importation (See Resources 4). HM Revenue & Customs refers to VAT on imported Japanese electronics as Input Tax. An individual or company registered for VAT can reclaim Input Tax (See Resources 4).
Declare the imported electronics to HM Revenue & Customs. Use the C88 form, also called the Single Administrative Document (See Resources 5). The quickest way to arrange processing of the form is to submit it electronically through the CHIEF (Customs Handling of Import and Export Freight) online system (See Resources 5). Pay HM Revenue & Customs the import duty and VAT (See Resources 5).
Tips and warnings
- Check with the Japanese company that it issues an international warranty with the imported electronics.
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