RE: FN-FORUM: Import & Export Costs?

date posted 7th August 2004 12:25

>Okay at the risk at sounding stupid here but I am confused I guess from
this..
>"Purchase price $1,000.00
>Shipping costs $125.00
>Clearance costs $50.00
>Total landed cost =3D $1,175.00
>Sterling equivalent approx =A3640.00
>Duty =3D (e.g.) 6% =3D =A338.40
>Total for VAT =3D =A3678.40
>VAT =3D =A3118.72"
>I pay
>Duty 38.40
+
>VAT 118.72
>To give me a landed cost of =A3157.12 yes / no?


Landed cost is the cost of landing the goods in the this country BEFORE
Customs get involved. The correct term for the price on which Customs =
base
duty and VAT is actually the 'CIF' value of the goods (Cost, Insurance,
Freight) as this is what is perceived to be the cost of getting the =
goods to
this country. Duty is calculated on this value (CIF or landed cost), =
and
then VAT is calculated on the CIF value plus Duty. The calculation =
above
illustrates how this works. A lot of this will really depend on the =
method
of shipping that's used - if the goods are sent by courier (e.g. DHL, =
UPS,
etc)then the courier company will do all the work involved in importing =
the
goods into the UK and charge you the Duty and VAT on delivery. If the =
goods
are sent via Air Freight you would need to appoint a clearance agent in =
the
UK to process the import documentation.