Building, construction and property services: international trade regulations
Regulations on the trade in construction sector goods and services, including temporary export or imports and VAT rules.
Introduction
Regulations, charges or other restrictions may apply to export goods in the sector as they leave the UK and when they arrive at their destination country. It is important that you research both sides of the transaction.
For more information, see the guides on dispatching your goods within the EU and exporting your goods from the EU to a third country, where ‘third country’ means a country outside the EU.
You need to be aware of procedures and rules for the temporary export of construction equipment and tools of trade, selling services overseas and the ‘CE’ quality mark.
Find commodity codes and other measures applying to imports and exports by accessing the online UK Trade Tariff tool.
Export regulations in the building, construction and property services sector
First, you need to classify your goods. Use of standardised classification codes makes it easier to check if any restrictions or charges apply. You can use the Integrated Tariff of the UK to classify your goods. For more information, see the guide on the classification of goods.
Remember that in general it is much simpler to trade with other EU countries than with countries outside the EU. This is because the goods are in free circulation. The EU is a single market and the UK is in a customs union, so you can trade with other EU countries without restriction (although some local charges may still apply).
HMRC runs the Authorised Economic Operator (AEO) scheme for businesses. While the scheme is not compulsory, companies that meet the requirements will be registered as AEOs and can take advantage of simplified customs procedures that relate to the security and safety of their goods in transit. Read the guide on authorised economic operators
Export licensing and certification
An export licence is required in order to export specified goods and technology that may have a dual use (in other words goods and technology which may have both civil and military applications). You may require an export licence for goods with a potential military use - such as steel tubes or some building plans. You may also need a licence to export services, such as fulfilling a contract to build a military installation abroad. To find out more about strategic export controls, see strategic exports: when to request an export licence.
Email the Department for Business, Innovation & Skills (BIS) Export Control Organisation for help at ECO.Help@bis.gsi.gov.uk
For information on export licences, read the guide on Do your goods need an export licence?
Controls apply to the brokering (which can include warehousing and shipping) of dual-use goods. For clarification, download guidance on trade of dual-use items from the BIS website (PDF, 168KB)
Export regulations for services
Services in this sector have different tax and export regulations. These rules depend on the country of export, and you may find that procurement and employment regulations also vary. You should check with your customer or the relevant authority representing the destination country. Find a list of international Chambers of Commerce in the UK on the British Chambers of Commerce website.
The EU Services Directive applies to service exports in Europe. While you have obligations, such as providing information about your business to consumers, the burden of other regulations has eased. For example, you typically will not need work permits for your non-EU staff working temporarily in another country as long as your non-EU staff already have work permits from one EU country.
Specific rules for exports
You must be aware of specific rules and procedures if you:
- sell services overseas
- undertake warranty or maintenance work
- export products that require a CE quality mark
A CE mark is a visible declaration by the manufacturer or trader that the marked goods comply with all relevant EU requirements. While CE standards are principally used within the EU, third (non-EU) countries may have their own standards and it is up to the exporter to check import requirements in each destination country.
International codes of practice for designing buildings (Eurocodes) are in place for buildings within the EU. Now fully launched, these standards will eventually replace national standards. Read about Eurocodes on the Eurocodes website. Building standards within third countries may differ.
The EU Services Directive applies to service exports in Europe, providing some obligations and many opportunities for firms across Europe. Other rules due over the next few years deal largely with environmental issues, including waste and landfill restrictions.
VAT and export declarations on warranty and maintenance work
Traders who need to export equipment for warranty and maintenance work outside the EU may need to complete part of the Standard Administrative Document (SAD) or C88. This post-shipment declaration allows HMRC to work out the duty you owe for individual consignments, as well as to gather statistical data on international trade.
For the purposes of charging VAT, the place of supply (where the goods or services are delivered), is the place where it is liable to any VAT. However, VAT rules in this area are complicated and traders must seek advice about what may be chargeable.
If the building on which you’re working is within the EU, you must charge VAT. If the building is outside the EU, you can zero-rate the work, which means that you don’t have to charge VAT. However, if the value of the work goes over the current VAT threshold in the country in which you’re working, you may have to register for and charge VAT or general sales tax in that country as well.
Leasing equipment to and from third countries
Generally, you must charge VAT on leased goods and pay VAT on goods that you hire in a third country. If you lease or hire equipment in the country where the job is taking place, you or your customer will be liable for any VAT due to the tax authorities of that country. Separate rules apply for leased vehicles.
Selling services overseas
If you send staff to work abroad, or use overseas subcontractors, you must comply with local employment regulations, including labour and tax laws, as well as ensuring they have the necessary visas or work permits.
There can be UK tax implications if you send someone overseas to work or provide a service on goods you have exported, eg sending an engineer to assemble a crane. Read the guide on how to work out your place of supply of services for VAT.
Temporary exports of construction equipment and tools of trade
You need to be aware of specific rules and procedures if you temporarily export construction equipment or tools of trade.
Temporary exports of construction equipment
Construction projects often involve temporary export of construction equipment. Simply exporting and re-importing these items can be complicated and involve the risk of paying duty, both overseas and when bringing the goods back to the UK. Special procedures can be efficient ways to avoid being taxed twice.
Special rules apply to using leased equipment overseas, and may reduce the capital allowances you can claim. Read about overseas leasing on the HMRC website.
Temporary exports and tools of trade
Traders can use an ATA carnet or a temporary import declaration for some types of temporary imports and exports, including tools and some equipment. But remember that the ATA carnet is not an export licence for controlled goods. For more information, see the guide to ATA and CPD carnets.
The Duplicate List procedure also helps workers who take tools abroad to cut red tape. Workers need two copies of a list of the goods and their description, quantity, and value on business stationery. The list must declare the type of goods, eg tools, the reason why you’re taking them abroad and, if known, your return date. Workers must also complete customs form C&E 1246 and take the form and both copies of the list on their journey.
When leaving the UK, the goods must travel with you. You must also show customs officers the paperwork. Officers will endorse it and give you back the C&E 1246 and one copy of the list to be kept with the goods. When you come back to the UK, present the C&E 1246 and the list with the goods to the Red Point (or in the Red Channel) on passing through customs. If you have left any goods in the country you have visited, you must declare this to the customs officer, who will let you know about further proper procedures. Read about the Duplicate List procedure scheme in the guide on temporary exportation from the UK.
Customs procedures for sending equipment to third (non EU) countries in separate containers follow the same principles as those for single consignments. Even if the equipment travels by separate means of transport, the consignment is still treated as one entry.
Once the goods arrive in the destination third country, you, your freight forwarder or your customer will have to make an import declaration. In some countries, duty payment may be suspended for temporary imports. You should check with your customer or the consulate of the destination country for specific arrangements, which vary from state to state.
Returned goods
Traders may also be able to claim returned goods relief on exported tools and equipment returned to the country within three years. Traders must keep paperwork to prove that the goods have left and been returned to the UK.
Outward Processing Relief - split consignments
If you export goods for processing or manufacturing outside the EC, you may be eligible to claim outward processing relief (OPR). Often your products will be re-imported in more than one consignment, or to different locations. So that HMRC can track the goods, importers are normally required to produce a copy of the export declaration and/or a copy of the departure message. When the products are re-imported, HMRC check that the correct amount of duty is declared and that the re-imported goods are deducted or ‘exhausted’ from the quantity exported.
When compensating products are re-imported in more than one consignment, a balance of exported goods will remain on the export declaration after the first consignment is cleared. HMRC keep the declaration to check that ineligible goods are not being imported. Traders must also give HMRC one completed INF2 form for the balance of each type of product.
Traders authorised under the Customs Freight Simplified Procedures (CFSP) scheme can reduce paperwork using the self-certification arrangements. OPR users who import split consignments on a regular basis may agree simplified arrangements with their supervising office. To qualify, traders must prove to HMRC that the exported goods are actually used to produce the compensating products. Traders must also be able to maintain accurate tracking records. HMRC can then authorise a ‘globalised’ INF2 procedure, which avoids producing individual INF2s.
Researching your export destination
You should thoroughly research your export destination country when planning to export.
There are a number of issues that you ought to consider. As a starting point, you may wish to seek advice from UK Trade & Investment (UKTI). Find your local international trade team on the UKTI website.
There are also various ways that you can research a potential export destination. These include trade associations.
Find commodity codes and other measures applying to imports and exports by accessing the online UK Trade Tariff tool.
Key things to check include:
- prohibitions or quotas on your products
- import licensing restrictions
- rates of duty payable when your goods enter your export market
You should also consider product safety and other technical standards in your export market. Your goods may need to be adapted to comply with these. Rules in your export market may be less or more strict than in the UK.
You can ask for information about your export destination country from a range of organisations, including:
- your local UKTI trade team
- your UKTI team within the commercial section of the UK embassy in your destination country
- building, construction and property services trade associations
- the Chambers of Commerce in the UK and in your destination country
UKTI is a government organisation that supports UK businesses trading internationally and overseas enterprises seeking to set up or expand in the UK. UKTI has an impartial global presence in countries throughout the world and helps businesses realise their international potential through knowledge transfer and ongoing partnership support.
Tariffs and duties
A range of import-specific regulations must be complied with by all businesses in this sector. Key issues relate to the Tariff, preferential duty rates and import duty reductions.
The rules for VAT on selling services have changed. The services you provide to other businesses are now charged VAT where your customer is based, not where your business is established. If you are supplying services to private customers, the rule continues to be that VAT is charged where the customer is based. Specific rules apply to the VAT treatment of certain types of construction businesses and services. Download guidance on changes to the place and time of supply of services rules for construction firms on the HMRC website. (PDF, 73KB)
Using the Tariff
A common customs tariff is applied across all EU countries on goods imported from outside the EU. Details of specific tariff duties and measures are contained in the Integrated Tariff of the United Kingdom.
Find commodity codes and other measures applying to imports and exports by accessing the online UK Trade Tariff tool.
The Tariff is used to determine the specific classification code of your goods and to find:
- any licensing requirements that apply
- rates of duty and import VAT that apply
- any additional charges, such as anti-dumping duties
- any reductions in duty that may be available
Preferential duty rates
The Generalised System of Preferences allows products from many countries to be imported within the EU at a reduced or zero duty rate. See the guide on using trade preferences.
The EC has a number of other trade agreements with third countries, as a result of which goods may attract preferential duty rates. Find out if your goods qualify for a preferential duty rate and meet appropriate rules of origin on the HMRC website.
Intrastat
If you are VAT registered and the goods you acquire from or supply to VAT-registered businesses in other EU countries reach the Intrastat exemption threshold for the year, you must submit monthly supplementary declarations to HMRC. Intrastat thresholds are reviewed annually. The thresholds are £600,000 for Arrivals and £250,000 for Dispatches.
Intrastat is the method of collecting information and producing statistics on goods traded between EU member states. See the guide on Intrastat - reporting the value and volume of intra-EU trade. Intrastat is only applicable to VAT-registered traders.
Intellectual property (IP)
Ensure that imported goods don’t breach IP rights of other businesses - watch out for counterfeit goods and design infringements. Infringing goods can be seized and destroyed by HMRC. If you suspect IP fraud of your goods, you can ask HMRC to check for imported counterfeit versions of your goods. Read how HMRC can help protect IP rights on the HMRC website.
Equally, ensure that you have the necessary patents or design registrations in place for each destination country before you begin exporting.
Import regulations in the building, construction and property services sector
As the EU is a customs union, you can buy most goods from other member countries without restrictions - although VAT and excise duty can still apply. For more information, see the guide on trading in the EU.
If you import from outside the EU, you may have to comply with import licensing requirements and with common customs tariffs that apply across the EU. See the guide on importing your goods from outside the EU
Import licences
Import restrictions can be product-specific or trade-specific. Many products are subject to product-specific standards and need to be supported by applicable certificates, product-specific licences and documentation.
Restrictions or limitations and anti-dumping duties may apply to certain imported commodities - see the guide to protecting EU businesses against cheap imports
For help identifying whether you require an import licence see the guide: do you need an export or import licence?
Use the Tariff for classifying your goods in order to find out which duties and measures apply.
HMRC operates the AEO scheme. While the scheme is not compulsory, companies that meet the requirements of the scheme will be registered as AEOs and can take advantage of simplified customs procedures that relate to the security and safety of their goods in transit. Read the guide on authorised economic operators.
Industry standards in the UK
Goods imported to the UK must comply with domestic business standards. Find out which regulations and licences apply to the building, construction and property services area in the UK in your business sector. You can also find guidance on building regulations on the Communities and Local Government website.
Property management standards
Standards also exist for property management:
- Fire safety standards cover issues such as maintenance, planning for emergencies and installation and design of suitable systems. Find out about fire safety on the Fire Protection Association website.
- Security standards cover all the key aspects of securing premises. Download a guide to securing premises from the British Securities Industry Association website (PDF, 1.12MB).
Using overseas service providers
Overseas construction and property service providers must comply with HMRC’s Construction Industry Scheme (CIS), which applies to payments made by contractors to subcontractors for construction operations carried out in the UK. Read about the new CIS on the HMRC website.
Overseas service providers may also need work permits to operate in the UK. You can find out about work permits on the UK Border Agency website.
Import relief schemes for traders
HMRC run several schemes that offer traders relief of duty, suspension of duty, or repayment of duty. These may be particularly useful when planning logistics in the sector.
Sources of help and support
As an importer or exporter in the building, construction and property services sector, you can turn to a range of bodies for help and information.
The government organisation with primary responsibility for providing trade support on export marketing and procedures is UKTI. You can find information on the services they offer to exporters on the UKTI website.
You can also find details of your local trade team using a postcode search on the UKTI website.
For imports, contact the relevant foreign embassy. You can find a list of foreign embassies on the Foreign and Commonwealth Office website.
Government sources of help and information
In addition to UKTI, other government bodies that provide business support in the building, construction and property services sector include HMRC - you can find information about importing and exporting on the HMRC website.
Further information
BIS ECO helpline
020 7215 4594
HMRC CIS helpline
0845 366 7899
UK Trade & Investment enquiry line
020 7215 8000
HMRC Tariff Classification Service enquiry line
01702 366 077
International trade team search on the UKTI website
Trade data information on the uktradeinfo website
Export restriction checker on the BIS Goods Checker website (registration required)
Overseas leasing advice on the HMRC website
Download the harmonised construction standards list from the Europa website (PDF, 93KB)
Eurocodes guidance on the Eurocodes website
Tariffs and import procedure guidance on the HMRC website
European trade requirements explained on the Market Access Database website
CIS guidance on the HMRC website
Building, construction and property services sector information on the UK Trade & Investment website