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A small business owner’s guide to international trade and taxes

Online retail is growing at an alarming rate. Not only are sales increasing in the UK, but the latest numbers show that the rest of Europe also increased around 20% year on year while North America grew by 15% for a combined total of around £370bn.

This isn’t even including fast emerging markets like China, India, and Brazil. Many small business owners are now seeing the benefit of exporting their goods overseas, but if the proper research isn’t conducted beforehand the consequences can be severe. Here are the risks of internal trade and how you can avoid them.

Exporting in the EU

Fortunately, importing to the rest of Europe is relatively simple, though this could potentially change with the looming EU referendum on June 23. At the moment, though, you won’t be required to pay any extra duty or customs fees due to the nature of the open market. This means that the only potential slip up that could occur is from VAT.

It’s crucial that you record all of your sales to other EU countries on your own VAT return and on an EU Sales List. If dispatches ever add up to more than £250,000, you’ll also be required to fill in an Intrastat Declaration. If you’re client is VAT registered in their own country, however, it will be them that’s required to pay rather than you. You just need to ensure you have their VAT number for your own return in the future.

Exporting Outside the EU

When dealing with countries outside of the EU, things can become much more complicated, especially dealing with VAT and duty. The amount of duty you’ll pay will be set by the country you're exporting to and be dependent on the type of goods and its value. You can find more information about particular products on the GOV.UK website.

Perhaps the main reason to consider exporting outside the EU is the potential to tap into the Chinese market. Over the last three decades China has grown to become a global superpower with urbanisation levels now well over 50%. Not only does China have its own unique laws and regulations, but large parts of the economy are still closed to foreign businesses and establishing networks can be difficult. This is why partnering with businesses like Inxpress that already have a reputation of dealing with the country is highly recommended.

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