Contracts, licences, declarations and documents needed to import and export goods and services.
When importing or exporting, the right paperwork is crucial. Missing or inaccurate documents can increase risks, lead to delays and extra costs, or even prevent a deal from being completed.
Whether you are importing or exporting, you need to understand what paperwork is required. Even if you use a freight forwarder or an agent, it’s still up to you to make sure the right documentation is available.
This guide explains the key documentation you should be aware of. It outlines what should be in your contracts and what paperwork you need for customs, transport and payment.
Key documentation for international trade
Making sure you have the right documentation is a vital part of international trade. Thorough, accurate paperwork minimises the risk of problems and delays.
- There should be a clear written contract between buyer and seller, including details of exactly where goods will be delivered
- Specific documents may be needed to get the goods through customs and to work out the right duty and tax charges. There may be requirements both for the country the goods are being exported from and the country they are being imported into
- Documentation is needed to cover the transport of the goods and insurance during the journey
- The right paperwork can be an important part of the payment mechanism
It’s important to co-operate with your counterpart on getting the paperwork right. For example, if you’re shipping goods to a customer overseas, they should tell you what paperwork they require at their end. If you are dealing with a non-English speaking country, it can be a good idea to provide one set of commercial documents in the local language.
You may want to get help with handling paperwork. Many businesses use the services of a freight forwarder or import agent. The British International Freight Association (BIFA) may be able to identify a suitable freight forwarder. Find a freight forwarder on the BIFA website.
However, you should remember that you are ultimately responsible for making sure you have the correct documentation.
International trade contracts and Incoterms
Different countries have different business cultures and languages. It’s a good idea to make sure you have a clear written contract to minimise the risk of misunderstandings. The Incoterms rules or International Commercial terms are a series of pre-defined commercial terms widely used in international commercial transactions.
The contract should set out where the goods are being delivered. It should cover who is responsible for every stage of the journey, including customs clearance, and what insurance is required. It should also make it clear who pays for each different cost.
To avoid confusion, internationally agreed Incoterms should be used to spell out exactly what delivery terms are being agreed, such as:
- where the goods will be delivered
- who arranges transport
- who is responsible for insuring the goods, and who pays for insurance
- who handles customs procedures, and who pays any duties and taxes
For example, an exporter might agree to deliver goods, at the exporter’s expense, to a port in the customer’s country. The customer might then take over responsibility, arranging and paying for customs clearance and delivery to their premises. The exporter might also be responsible for arranging insurance for the goods until they reach the port, but pass this cost on to the customer. See the guide on International Commercial Contracts - Incoterms.
As well as including delivery details, the contract should cover payment. This should include what currency payment will be made in, how much will be paid, when payment is due and what payment method will be used.
Trade in services
With no physical delivery of the product, contracts in services cannot use Incoterms. Instead, the key issue tends to be defining exactly what services are being provided and to what standards. Rules on the international supply of services changed on 28 December 2009. You may be required to supply extra information to customers including how your services work, how you handle complaints, and how you apply principles of non-discrimination. For more information, see the guide on international trade in services.
You may need an import licence to import goods into the UK. There are import controls on a range of different goods including firearms, food and textiles. Whether you need a licence may also depend on where the goods are from. See the guide: Export and import licences for controlled goods
Goods from EU countries can generally be brought into the UK with minimal paperwork, though it’s good practice to ask your supplier to send a copy of the invoice with the goods.
In very rare cases, where you have supplied no import or export declarations, you must complete an Entry Summary Declaration or an Exit Summary Declaration.
For imports or arrivals, see the guide to the Import Control System.
If you are importing from outside the EU, you generally need an invoice and a copy of the transport documentation, such as a Bill of Lading, for customs clearance. For goods worth over £6,500, a valuation statement is also normally required.
Goods from some countries can be imported with a reduced or zero rate of import duty. If you want to claim this, you need documentary proof of origin showing that the goods were manufactured or produced in the preference country in accordance with preferential rules of origin. See the guide on using trade preferences.
You can declare the imports to customs using a Single Administrative Document (SAD), also known as form C88. You must give details of the goods using a ‘commodity code’ which determines what the rate of import duty is. Most importers use a freight forwarder or customs agent to handle customs clearance. Find a freight forwarder on the BIFA website.
For more information on completing and submitting form C88 see the guide on declarations and the Single Administrative Document.
You pay VAT on imports from outside the EU to HM Revenue and Customs (HMRC) at the same rates as UK goods. If you are registered for VAT you can reclaim this VAT in the same way as for goods purchased within the UK. Instead of having a VAT invoice from your supplier, HMRC provides a form C79 showing the VAT paid. See the page VAT on goods from EU countries in the guide on imports and purchases from abroad: paying and reclaiming VAT.
If you buy goods from a supplier within the EU, you account for VAT on your VAT return. See our section on international trade, international visits and VAT.
If your purchases from EU countries exceed an annual threshold you must also complete an Intrastat arrivals (EU imports) declaration. Imports from countries outside the EU do not count towards the Intrastat threshold and do not need to be included. Intrastat thresholds are reviewed annually. The thresholds for arrivals is £1.5 million. See the guide on Intrastat - reporting the value and volume of intra-EU trade.
See the guide on an introduction to Intrastat.
You may need an export licence to export goods. For example, there are controls on exports of chemicals and military technology. Licence requirements may also depend on which country you are exporting to. See the guide: import and export licences for controlled goods
If you are selling goods within the EU, most goods are in free circulation and can be freely moved from the UK to other EU countries without customs controls or charges. It’s good practice to accompany shipments with a commercial invoice and a packing list if appropriate.
If you are selling to customers outside the EU, you need to declare your exports to HMRC. This is generally done electronically, using the National Export System. The declaration includes details of the classification of the goods being exported and which country they are going to. See the guide on export declarations and the National Export System. Alternatively, an authorised agent or freight forwarder can handle the customs declaration for you.
The services you provide to other businesses are charged VAT where your customer is based, not where your business is established. If you are supplying services to private customers, VAT is charged where the customer is based.
In most cases, you and your customers can use the current VAT reverse charge procedure to get your VAT back.
If you aren’t sure if your customer is in business, ask them for a VAT number. If the customer is not VAT registered, then you can use other evidence, such as letters from their tax authority.
For VAT purposes, exports of goods are generally zero-rated. You need to keep copies of your VAT invoices and proof of export. This helps you prove that the goods left the country and that you do not have to pay any output VAT on them.
If your sales to EU countries exceed an annual threshold you must also complete an Intrastat dispatches (EU exports) declaration. Exports to countries outside the EU do not count towards the Intrastat threshold and do not need to be included. Intrastat thresholds are reviewed annually. The threshold for Dispatches is £250,000.
See the guide on an introduction to Intrastat.
You should check what documentation is required for import into your customer’s country. Typically, you need a commercial invoice and shipping documents such as an Air Waybill. Other requirements can include a certificate of origin.
International transport documentation
Transport documentation is needed to provide instructions to the carrier on what should be done with the goods. They can be used to pass responsibility for, and sometimes ownership of, the goods during their journey.
- If you are exporting goods, you typically complete an Export Cargo Shipping Instruction giving the freight forwarder details of the goods and how they are to reach their destination.
- You also normally complete a Standard Shipping Note, telling the port how to handle the goods.
- The carrier should provide you with documentary evidence that they have received the goods, eg a bill of lading or a waybill. You should keep any documents as evidence in case of later problems with the shipment.
- A CIM Consignment Note gives details of the goods being transported. If you are shipping dangerous goods, you must also complete a dangerous goods declaration. See the guide on moving dangerous goods.
- You may need to insure the goods, and you may also be required to provide proof of insurance to your customer, particularly if you are passing on the costs. You should discuss what documentation is required with your customer and your insurer. See the guide on transport insurance.
Read an overview of how to complete key transport documents in the guide on transport document completion.
For more information on transport issues, see the guide on international transport and distribution.
International trade documentation and payments
The right paperwork plays an important part in making and receiving payment.
Documentary collections and documentary credits are payment methods often used in international trade. By using special paperwork, the risks of the customer failing to pay or the supplier failing to deliver are reduced:
- With a documentary collection, the exporter prepares a bill of exchange stating how much is to be paid and when. Once the customer accepts this bill of exchange, they are legally liable for payment. Only then does the exporter, usually through the bank in the overseas country, allow the customer to have the transport documents needed to take possession of the goods.
- With a documentary credit, the customer arranges a letter of credit from their bank. The bank agrees to pay the exporter once all the right documentation - such as transport documents showing the right goods have been despatched - is received. The exporter must provide the required paperwork within the agreed time limit and with no discrepancies.
See the guide on getting paid when selling overseas.
If you are using one of these payment methods, it’s important to understand what documentation is required and ensure it is accurate. Payments under letter of credit can be particularly problematic as the exporter must provide exactly the right documentation in order to get paid.
Regardless of what payment method you agree, you should have a clear written contract stating what amount is due, in what currency, and when. The contract should also make it clear who is responsible for any bank charges.
See the guide on International Commercial Contracts - Incoterms.
International trade documentation: special cases
In some cases, international trade requires special documentation.
- If you are importing goods, you may need proof of which country the goods came from. For example, some imports into the UK are entitled to preferential rates of duty but require a form EUR1. See the guide on using trade preferences.
- Similarly, if you are exporting, your customer may require a certificate of origin from you. Your Chamber of Commerce can issue these.
- There are special UK requirements for some controlled goods, such as firearms, medicines, plants and animal products - for example, a licence may be required. See the guide: do you need an export or import licence?
- If you are exporting, you should check whether any special documentation is required overseas to satisfy local regulations. For example, you might need documentary proof that your goods meet local product standards. Research overseas markets on the UK Trade & Investment website.
- Dangerous goods must be accompanied by appropriate special paperwork. Read the guide on transport document completion.
- There are simplified processes for temporary exports, eg if you are taking samples to an overseas exhibition. See the guide on temporary exportation from the UK. If you have any doubts about the documentation you need, you should take advice. Many businesses get help from freight forwarders or import agents.
HMRC Tariff Classification Service
BIS ECO Helpline
020 7215 4594
BIFA Enquiry Line
020 8844 2266
Published: 1 August 2012
Updated: 6 April 2017
- Rates, allowances and duties have been updated for the tax year 2016 to 2017.
- HMRC Tariff Classification Service updated.
- Rates, allowances and duties have been updated for the tax year 2015 to 2016.
- Intrastat threshold updated to 1.5 million
- VAT threshold rates have changed.
- Fixing references to specialist guides
- First published.