What is bonded warehousing and how can it help your business?
Brexit has brought with it more paperwork and processes to understand when it comes to the importing and exporting of goods. We know that goods being imported are often subject to taxes known as tariffs or duty and are immediately payable by the importer despite the goods not having been sold yet.
There are also additional taxes on goods such as alcohol and tobacco which are subject to ‘excise’ tax, meaning the tax is levied at the time of manufacture and not when the goods are sold. Customs duties are imposed on goods which become taxable once they enter the country whereas excise taxes are levied on goods as they are produced in the country of origin.
But there is a way in which businesses can delay the payment of such taxes and this is where Bonded Warehousing can be beneficial.
What is Bonded Warehousing?
Bonded warehousing offers a secure space in which goods liable for import duty and VAT can be stored, or otherwise known as ‘bonded goods’. This kind of warehousing allows you to defer the payment of duties and other taxes until the imported goods need to be distributed for sale. During this time the goods can also be sorted, repackaged and processed before they are distributed.
This means that a bonded warehouse is a ‘duty free’ zone with two types of storage, wet and dry. Wet bonded warehouses are places where alcohol and tobacco may be stored, food is also an example of other goods that are commonly stored in a bonded warehouse.
Most imported goods can be stored in a bonded warehouse for as long as you wish, however items covered by the Common Agricultural Policy (CAP), such as oils, fats, meat and sugar are subject to more specific regulations. When the goods do finally leave the warehouse the duties must be paid, unless they are moved to another bonded warehouse or they are exported.
What are the benefits of Bonded Warehousing?
Being able to store stock in this way has a number of benefits for sellers who are importing or selling goods that are liable for charges such as these. Some examples of suppliers who benefit from this system are wine merchants, food suppliers and tobacco importers.
There are numerous benefits associated with bonded warehousing, here are some of them:
The deferring of duty and tax payments
With payment only being due when goods leave the warehouse it provides some time and space in order to carry out any preparations needed prior to sale, and of course can have a positive impact on cash flow. If the goods are being exported then the costs can be avoided completely and it has been reported that people have made tax savings of 25-30% through the use of bonded warehousing.
Long term storage options
With the exception of perishable goods, products can be stored in bonded warehouses within the UK indefinitely. This means that goods can be stored until any paperwork, licensing requirements or restrictions are dealt with or the goods are exported again.
Stay ahead of demand
With long term storage options, the use of bonded warehouses means that goods can be stored in advance of peak demand periods such as Christmas or sales and promotions, ready to be distributed as and when required.
Preservation of goods
Bonded warehousing can house any kind of products for as long as necessary and they have the facilities to maintain the quality through temperature control, dry containers and freezers.
There will be the provision of CCTV as well as staff who will ensure the goods are cared for and every item is documented. In order to be a customs warehouse approval is given by HMRC and includes meticulous assessment and auditing, so you can be assured that your goods are well looked after.
Most bonded warehouses are located near major ports and airports which allows for ease of storage close to the port of entry and then again ease of distribution to major national road networks or international exporting when the goods are ready to be released for sale. This ensures a reduction in distribution times as well as lowering the cost of transport and therefore emissions.
Bonded warehousing can allow your business some breathing room in terms of time and cost, with the ability to defer import and excise duty payments you will gain some flexibility in order to store, repack and plan the ultimate distribution of your goods. With the advantage of storage without customs charges straight away, you may also be able to maximise on exchange rates and other factors which will determine the price of your goods.
Our warehousing logistics division operates over 80,000 sqm of warehousing throughout the UK and Romania, servicing customers within a number of sectors, including: technology, manufacturing, FMCG, automotive, agriculture, retail, fashion and eCommerce.
For more information on our bonded or general warehousing facilities please visit: https://xpediator.com/services/warehousing-logistics/