What are Customs Charges?
Customs regulations are continuously evolving, so understanding the customs charges applicable to your shipment is very important. In the current cost-of-living crisis, avoiding unnecessary customs charges is just one of the many crucial steps you can take to securing your business financially.
Our intuitive logistics platform can help arrange and facilitate your customs clearance process, providing step-by-step guidance, local experience and global expertise. When it comes to customs charges, we’ll also ensure you’re paying the right amount and lowering costs wherever possible.
What are customs charges when shipping internationally?
Customs charges are payments imposed on goods imported from one customs union to another. The EU is one customs union, the UK is another (post-Brexit), Norway is a third, and other countries outside Europe are also customs unions.
There are various types of customs duty including:
Basic Customs Duty (BCD)
Excise Duty
Counter-vailing Duty (CVD)
The duties your shipment is subject to depends onvarious elements, such as:
The nature of the goods you’re importing
Customs regulations of the country you’re importing into
Value of your goods
Country of origin of your goods
Shipping and insurance costs
Below we have detailed the customs charges imposed on some of the more common trade routes across the world – Twill’s customs clearance services are available for all of these routes and more than 150 countries around the world.
Customs charges from the USA to the UK
When importing goods from the USA to the UK, your shipment may be liable for customs duty. The actual customs charges payable depend on the specifics of the goods you’re importing and is calculated by your shipment’s HS code. The USA has no tariff preferences with the UK, so import duties are applied to any goods worth over £135. The specific import duty charges will depend on:
The goods themselves
Their country of origin
The mode of transport used to import them
On top of this, 20% VAT is charged.
Customs charges from the EU to the UK
Post-Brexit, the regulations regarding the transportation of goods between the UK and EU have changed. As the UK is now no longer part of the EU, goods imported from the EU to the UK may be subject to customs charges.
Customs charges can be avoided using the current Free Trade Agreements that exist between EU and UK. The usage of the Free Trade Agreement is dependent on the origin of the goods. If the goods qualify as European Origin, the Free Trade Agreement can be applied and no customs duties apply upon importation.
Goods with a value of more than £135, or excise goods below this value, may be subject to import duty. This charge ranges from 0-25% of the value of the goods, depending on:
The value of the goods
The material from which they’re made
The goods themselves
The Origin of the goods
This is calculated by the HS code. On top of this, normally 20% VAT is charged.
Customs charges in India
Customs duty is levied by the Indian government on all imports into India and some exports leaving the country. The specific customs charges depend on the goods you’re shipping and their value.
The different import duties your shipment is subject to also depend on the nature of the goods you’re importing. There are variousother types of import duties when shipping goods into India, including:
Additional Customs Duty (also called Countervailing Duty)
Protective Duty
Education Cess
Anti-dumping Duty
Safeguard Duty
Customs charges in Australia
All imports into Australia are liable for customs duty and Goods and Services tax(GST), unless they have an exemption, such as concession schemes.Customs duty is calculated based on the type of goods, along with exemptions or preference schemes.
The average customs duty paid for goods imported into Australia is 5% of the goods’ value, converted into Australian dollars. Customs value of imports must be expressed in Australian currency.
Customs charges in the Philippines
Like most countries, all imports into the Philippines are subject to import duties. Customs duty is calculated based on the shipping value, which includescost of goods, freight and insurance. The average customs duty for goods being imported into the Philippines is 10.5% of the goods’ total value.
Imports into the Philippines are also subject to a sales tax of 12%.
How to avoid customs charges: is it worth it?
There’s no real way to avoid customs charges without providing false information, which comes with a major risk, including delays, potential fines and your shipment being denied entry. When it comes to clearing customs, honesty is the best policy. It’s good business practice to pay all customs charges required.
However, in some cases your shipment might be applicable to reduced customs charges, for example, when you’re:
Re-importing goods
Importing goods temporarily
Importing goods covered by preference agreements
Importing goods to process or repair them
Importing educational or cultural goods
Importing media or scientific goods
Importing printed or promotional goods
Importing goods eligible for end-use relief
Importing goods for industrial or commercial research
Importing sea produce or goods manufactured at sea
Another legitimate way customs charges can be avoided is through a Free Trade Agreement (FTA). FTAs are rules agreed between two or more countries implemented to reduce barriers to imports and exports between these countries.
Under an FTA, goods can be transported across borders with substantially reduced or even no tariffs or duties. For example, there is an FTA between the UK and the EU that provides no duties or tariffs on shipments that comply with their European origin rule. You can find out more about the UK’s Free Trade Agreements at the gov.uk website.
There are also numerous duty relief schemes that enable you to pay less, or even zero tax or duties on your imports, for example the Generalised Scheme of Preferences (GSP) scheme. You can check if your shipment is eligible for any duty relief schemes by contacting the local government of your destination.
Twill can also provide expert guidance on navigating these schemes when you sign up to our digital logistics platform.
Customs Clearance Services with Twill
Leave your goods in safe hands when you choose to ship with Twill, using our digital platform to arrange and facilitate your customs clearance. This includes managing customs charges andensuring you’re paying the right amount. We can also check if you’re eligible for any duty relief schemes or reduced customs charges.
Find out more about the custom clearance services Twill provides, from import and export clearance to hiring a customs broker. Sign up today and enjoy an efficient, secure and hassle-free customs clearance procedure with Twill.
