Import Finance

Paperwork

You must have the right documentation to enable you to import goods.

Goods in free circulation within the EU generally require minimal documentation.

However, if your annual imports exceed £270,000, you must provide Intrastat declarations to Customs for statistical purposes (visit www.uktradeinfo.com).

• It is good commercial practice to accompany goods with a commercial invoice that quotes the VAT numbers of all the parties involved.

• Certain goods (eg goods subject to excise, agricultural or chemical goods) require special documentation.

For goods from outside the EU, your supplier must provide you with some of the documentation you need. This may include:

• An original invoice (plus three copies).

• A copy of the transport document.

• Any documentation required to prove the origin of the goods.

You will need this if you are claiming preferential entry (reduced or zero rates of import duty for certain goods imported from certain countries).

For imports worth more than £6,500, a valuation document is normally required.

This is a declaration by the importer (ie you) or sometimes a third party.

For goods from outside the EU, you may also need an import licence.

Contact your trade association to find out which government department issues licences for your type of goods; for example, the Rural Payments Agency (RPA) issues import licences for agricultural products and plants and some food and drink.

Foreign Currencies

An established exporter will almost always be able to quote and invoice you in pounds sterling.

• You may want to negotiate payment in a foreign currency, if it results in other concessions from your supplier.

• If you agree to pay in a foreign currency, you will be exposed to a foreign exchange risk.

You can fix the pounds sterling cost by entering into a forward foreign exchange contract with your bank.

• You agree to buy the foreign currency at a fixed price at an agreed future date.

The cost of the transaction will be included in the rate you are quoted and depends on the current exchange rate and relative interest rates.

A euro bank account will give you flexibility in sourcing products from the countries that use the currency.

• If you export to and import from the eurozone, euro sales can fund euro purchases and cut your exchange risks.

• Converting into and out of the euro remains an exchange risk as the value of pounds sterling fluctuates against the euro.