How to Use Free Zones

Trading in international markets will mean your business will import from countries abroad. When the goods you are trading in come into the UK, they can be stored at facilities called Free Zones that are based near airports and a ports of entry. The practical reasons for storing goods in these special locations is that any goods your business imports into the UK will have their VAT and/or customs duty (for goods imported from outside of the EU) suspended. You can also store goods in a Free Zone if they would normally come under the Common Agricultural Policy.
Your business can ask for authorisation from HMRC (HM Revenue & Customs) to use Free Zones, or you can hire a company to handle your Free Zone goods for you. If your business imports goods from countries abroad that it will need to manufacture items it will then export abroad, you can apply to the HMRC to move your imports to a Free Zone where a limited number of processes can be carried out on the goods.
Operating a Free Zone
The practical application of using a Free Zone in your trading business is to enable your enterprise to better manage its cash flow. Your business should be aware of how VAT is handled on goods that you bring into the UK from countries abroad that are outside of the EU. Any VAT that would normally be due is suspended, but will then become payable as soon as you move the goods out of the Free Zone.There are six Free Zones your business can use in the UK:
- Tilbury
- Isle of Man
- Liverpool
- Sheerness
- Southampton
- Prestwick
Goods and Free Zones
When trading internationally, the use of Free Zones makes it much more convenient for your business to bring consignments into the UK from countries abroad. You must, however, ensure that the goods you are trading in and consequently importing from abroad can be stored in a Free Zone. There are two types of goods that can be stored in a Free Zone. They are:Community Goods
These are goods your business is trading in and has bought into the UK from an EU country abroad. Note that you can also store goods sourced in the UK in a UK based Free Zone.
Third Country Goods
Any country that is outside of the EU is called a Third Country. As the goods you are trading in are moving into the EU, that is they are coming into the UK, these are referred to as imports. These goods are usually referred to as none Community Goods. More detailed information about the types of imports can be bought into the UK and stored in a Free Zone are in the HMRC Notice 334, section 4. Note that any restricted goods such as firearms or controlled drugs will require a licence to be present when the goods arrive at the Free Zone.
How to Become a Free Zone Operator
If you want to operate a Free Zone as part of your international trading business, you need to write to the controller of the Free Zone you want to use. You can get all the information you need on the HMRC website. Once you have made your application, and this has been accepted, you will be contacted and sent a letter of authorisation. The letter will set out any conditions your business must meet to become a Free Zone manager.How to use Your Free Zone
The type of goods and any customs relief that may be attached to them will govern how you operate your Free Zone, or use the services of a Free Zone within your international trading business. Your business must comply with what are called transfer procedures that will be specific to the goods your business is trading in with countries abroad. You can read more detailed information about transfer procedures in volume 3 of the Tariff.To bring goods into a Free Zone from a country abroad, the goods must be accompanied with the appropriate customs declarations. These usually take the form of a fully completed SAD (Single Administrative Document) that is otherwise known as form C88. If your business has been trading for some time and it has set-up the Customs Freight Simplified Procedures (CFSP), this can also be used for imports into the Free Zone you want to use.
Business Energy With a Difference
If you are looking for business energy or need advanced solutions like remote energy monitoring, new supplies, downgrading or upgrading capacity, have a no obligation chat with Purely Energy.
To find our more get in touch here. or call 0161 521 3400.
- How to Receive Payments from Foreign Customers
- How to Chase Payment from Overseas Customers
- Checking Credit Rating of Overseas Customers
- Writing Payment Terms and Conditions for Overseas Trade
- Understanding Currency Exchange
- How to Manage Time Differences with Multiple Office Locations
- How to Use VoIP with Multiple Office Locations
- Using Virtual Office Technology in Multiple Office Locations
- Taxes and Your Overseas Office
- Managing Overseas Suppliers
- Your Business Website and Multiple Office Locations
- Veterinary Certificates when Exporting Livestock
- Locating Premises for Your Overseas Office
- VAT and Excise Paperwork
- How to Use Free Zones
- How to Integrate your UK and Overseas Offices
- Regulations and Permits for Your Foreign Office
- Recruiting Staff for Your New Office
- Using an Agent to Setup an Overseas Office
- How to Use Customs Freight Simplified Procedures (CFSP)
- Using Trade Control and Expert System (TRACES)
- Using Customs Handling of Import and Export Freight
- Understanding and Using National Export System (NES)
- Understanding Export Supplementary Declarations (SDs)
- Understanding the Single Administrative Document (SAD)
- Using the New Computerised Transit System (NCTS)
- Understanding Incoterms
- How to Complete the Intrastat Form
- The Basic Documents for Overseas Trade
- The Importance of Understanding the Tariff
- Penalties and Fines for Customs and Excise Infringements
- Zero Rate VAT and International Trade
- How Excise Warehousing Operates
- Excise Duty and the USA
- Excise Duty and Cross Border Trading
- Excise Duty and Selling Within the EU
- Using an Agent to Help with VAT and Excise Arrangements
- How to Use Simplified Import VAT Accounting (SIVA)
- How to Classify Your Goods for Export
- How to Use Customs Warehousing
- How to Defer Excise Duty
- Excise Duty and International Trading
- VAT and Export Trading
- Moving Goods by Road and Rail
- Moving Goods by Sea and Air
- Customs and Temporary Storage
- How to Transport Dangerous Goods
- How NCTS (New Computerised Transit System) Operates
- Understanding Community Transit
- How to Choose the Right Transport for Your Export's
- Understanding Transport Insurance
- How to Choose and Use a Freight Forwarder
- Using the Postal Service for Exporting
- Packaging Your Goods for Transport
- Locating Overseas Markets to Sell to
- How to Use an International Trade Adviser
- Logistics and International Trade
- Researching a New Overseas Market
- Trading with the USA: A Beginners Guide
- Trading with Europe: A Beginners Guide
- Using the Passport to Export Programme
- Finance and International Trade: An Overview
- Do You Need an Export License
- Preparing Your Business for International Trade
- Risk Management and Overseas Trading