With a population of 67 million people and a GDP of £2.27 trillion (2022), the United Kingdom is one of the world’s largest and most robust economies.
Despite the challenges of recent years – resulting from the UK’s exit from the European Union (“Brexit”), as well as global high inflation and ongoing effects of the COVID-19 pandemic – the UK remains a key market for international trade, known for its sophisticated consumer market, strong legal frameworks and significant global financial influence.
With an economic environment conducive to business and investment, trading with the UK presents lucrative opportunities for foreign nationals and entities across the global economy.
Underpinning this is a well-established regulatory framework covering everything from product standards and safety to data protection and intellectual property rights. This forms a critical aspect of the UK’s appeal, enabling trading partners to conduct business with confidence.
However, trading with the UK requires compliance with its complex import and export regime, comprising rules, tariffs, and regulations that govern the flow of goods and services into the country.
This guide provides a comprehensive overview of the key aspects of trading with the UK, including moving goods, specific import and export rules, taxation, data protection, and business travel considerations.
Whether you are a seasoned trader or new to the international market, understanding these elements will be critical to successful commercial engagements with the UK.
Section A: Overview of Trading with the UK
The United Kingdom is a pivotal player in the global trade arena, characterised by its strategic geographical location, robust infrastructure, strong legal frameworks, and long-standing commercial relationships across the globe. These factors make it an attractive hub for businesses seeking access to European and global markets.
1. Key Characteristics of UK Trade
The UK retains a prominent position within global trade, with defining features that include:
a. Trade Volume
The UK remains a significant global player among goods trading nations. It imports and exports a diverse range of products, including machinery, automobiles, pharmaceuticals, and food products.
b. Major Trading Partners
The United States, Germany, China, the Netherlands, and France rank among the UK’s top trading partners. This highlights the UK’s broad geographic trading relationships post-Brexit.
c. Trade Balance
The UK typically has a trade deficit, meaning it imports more than it exports. According to ONS figures, this deficit was £170.3 billion in 2022.
However, it also runs a significant surplus in service sectors, particularly in financial and professional services. According to the ONS, in 2022, the service sector accounted for around 80% of the UK’s total exports.
d. Post-Brexit Trade Agreements
The UK Government has actively pursued new Free Trade Agreements (FTAs) with various countries to diversify its trading relationships and potentially boost exports. As of April 2024, agreements are in place with over 70 countries. Work continues to secure additional deals to maintain the UK’s global trading position.
e. Investment
The UK is one of the leading destinations for foreign direct investment (FDI) in Europe, with significant inflows from multinational corporations looking to establish or expand their operations in Europe.
2. Importance of the UK as a Trading Partner
For any foreign entity considering entering the UK market, it will be important to have an appreciation of its strengths and opportunities as a trading partner:
a. Strategic Market Access
The UK serves as a gateway to the European market despite its exit from the European Union. Its strong linguistic and cultural ties to North America, the Commonwealth, and other English-speaking countries also enhance its role as a trade hub.
b. Economic Significance
The UK is a notable player in global trade. It ranks as the sixth-largest economy globally by nominal Gross Domestic Product (GDP) and the tenth-largest by Purchasing Power Parity (PPP). It also stands twenty-first in the world for nominal GDP per capita.
Accounting for 3.1% of the global nominal GDP, the UK’s economy represents 2.3% of the world’s total GDP when measured by PPP.
c. Consumer Market
The UK’s consumer market is large and diversified, offering significant opportunities for foreign businesses in sectors such as retail, luxury goods, and consumer electronics.
The strong demand for high-quality imported goods makes it a lucrative market for international exporters.
In addition to its large domestic market, the UK is also a major gateway to other markets around the world. The UK is a member of the G7, the G20, and the OECD, and it has trade agreements with over 150 countries. This gives UK businesses access to a global market of over 7 billion people.
d. Open and Liberal Economy
The UK has a long history of free trade and has a relatively open and liberal economy. This makes it easy to do business in the UK and to trade with UK companies.
The UK’s open and liberal economy is based on the following principles:
1. Free markets: The UK government does not interfere in the free market to a significant extent. Businesses are free to set their own prices and to produce and sell whatever goods and services they want.
2. Private property rights: Private property rights are strongly protected in the UK. This gives businesses and individuals the confidence to invest in the economy.
3. Open competition: The UK government encourages competition in the economy. This helps to keep prices low and drives innovation.
The UK’s open and liberal economy has a number of benefits for businesses that trade with the UK. It is easy to start and operate a business in the UK. The UK government has a number of programmes and initiatives in place to support entrepreneurs and small businesses.
There are few restrictions on foreign investment in the UK. Foreign businesses are free to invest in any sector of the UK economy and to establish their own operations in the UK.
There are also relatively few tariffs and other trade barriers in the UK. This makes it easy to import and export goods and services to and from the UK.
When businesses are free to compete and to innovate, they are more likely to develop new products and services and to create new jobs. This helps to grow the economy and to improve the standard of living for everyone.
e. World-Class Infrastructure
The UK has world-class infrastructure, including ports, airports, and roads, making it easy to transport goods and services to and from the UK.
Businesses have the choice and flexibility to transport their goods by sea, air, or road.
Major ports include the Port of London, the Port of Liverpool, and the Port of Southampton. These are able to handle a wide range of goods, including containers, bulk cargo, and vehicles. The UK also has a number of smaller ports located around the country.
Major UK airports include Heathrow Airport, Gatwick Airport, and Manchester Airport, which together are connected to over 500 destinations around the world. The UK also has a number of smaller airports located around the country.
The UK also boasts a well-developed network of roads, including motorways, A-roads, and B-roads. The UK’s motorways are high-speed roads that connect major cities and towns, while A-roads are major roads that connect smaller towns and villages. The UK’s B-roads are smaller roads that connect rural areas.
f. Skilled Workforce
The UK has a highly skilled workforce, which is a major advantage for businesses trading with the UK. UK workers are well-educated and productive, and UK companies are known for their innovation and creativity.
The UK’s skilled workforce is a result of a number of factors, including a strong education system and a diverse and multicultural workforce bringing a wide range of skills and perspectives to the workplace which help drive innovation and creativity. UK businesses also invest heavily in training and development for their employees to ensure that UK workers have the skills and knowledge to be efficient and successful.
g. Established Legal System
The UK has a strong legal system that protects the rights of businesses and individuals, making it a safe and reliable place to trade.
The UK’s legal system is based on the following principles:
1. Rule of law: The rule of law is the principle that everyone is subject to the law, including the government. This ensures that businesses and individuals can be confident that their rights will be protected.
2. Fair trial: The right to a fair trial is a fundamental right in the UK. This ensures that businesses and individuals can have their case heard by a fair and impartial judge.
3. Enforcement of contracts: Contracts are legally binding in the UK. This gives businesses the confidence to enter into contracts with other businesses and individuals.
4. Intellectual property protection: The UK has a strong intellectual property protection regime. This protects the rights of businesses and individuals to their intellectual property, such as patents, trademarks, and copyrights.
In effect, this means businesses can be confident that their contracts will be enforced, that their intellectual property will be protected and that they will be treated fairly in the event of a dispute.
h. Competitive Trade Framework
The UK has competitive trade rules which promote free and fair trade. These rules are based on the following principles:
1. Open markets: The UK government is committed to open markets and free trade. This means that businesses and individuals are free to trade with other countries without facing excessive tariffs or other trade barriers.
2. Fair competition: The UK government is committed to fair competition. This means that businesses are free to compete with each other on a level playing field. The UK government also has laws in place to prevent anti-competitive practices, such as price-fixing and cartels.
3. Transparency: The UK government is committed to transparency in trade policy. This means that businesses and individuals can understand the UK’s trade rules and can have their say in the development of new trade agreements.
These bring a number of benefits for businesses that trade with the UK.
Businesses can access a wide range of markets for their goods and services. Businesses can also compete on a level playing field due to the country’s competition laws, while clear and transparent trade rules offer certainty and predictability when planning for the future.
Section B: Moving Goods into and out of the UK
Trading goods with the UK involves compliance with specific processes for importing and exporting. The UK’s customs regulations are designed to control goods coming in and going out of the country, ensuring safety, security, and proper taxation.
1. Global Trade Rules Under Incoterms
When trading with the United Kingdom, grasping the concept of International Commercial Terms, commonly known as Incoterms, is crucial.
Incoterms define the responsibilities of buyers and sellers involved in the shipping and transportation of goods.
Developed by the International Chamber of Commerce (ICC), these terms are standardised three-letter trade terms used in sales contracts to clearly communicate at what point costs and risks transfer from the seller to the buyer and who is responsible for insurance, documentation, customs clearance, and other logistical activities associated with the transportation and delivery of goods.
The role of Incoterms in UK Trade includes:
a. Risk and Cost Transfer
Incoterms specify the exact point in the transportation process where the risk of loss or damage to the goods shifts from the seller to the buyer. For instance, terms like FOB (Free on Board) indicate that the seller assumes all risks until the goods are loaded onto a shipping vessel, after which the buyer takes over. Conversely, DDP (Delivered Duty Paid) places maximum responsibility on the seller, including payment of all transport costs and duties.
b. Simplification of Transactions
By using Incoterms in contracts, both parties gain a clear understanding of their obligations, helping to prevent disputes and misunderstandings. This clarity is particularly important in international markets like the UK, where precise terms reduce complications related to geographic distance, differing legal systems, and cultural variations.
c. Customs and Clearance
Certain Incoterms, such as DDP, require the seller to handle all duties, taxes, and customs procedures. Understanding which Incoterm to use influences how customs clearance is managed, impacting the efficiency of border crossings and adherence to regulatory requirements.
Selecting the appropriate Incoterm depends on various factors, including the type of goods shipped, the preferred balance of risk between seller and buyer, and the practical aspects of managing freight and insurance. Businesses should consider these elements carefully when negotiating trade agreements with UK partners to ensure that the terms align with their strategic and operational goals.
Read our guide to Incoterms here.
2. General Procedures for Bringing Goods into the UK
To bring goods into the UK, you must comply with the rules for importing as follows:
a. Apply for an EORI number
An EORI number (Economic Operators Registration and Identification number) is a unique identifier required by businesses involved in importing or exporting goods to or from the UK and the European Union.
It is essential for companies to obtain this number to engage in international trade within these regions, as it helps streamline customs procedures and facilitates faster clearance.
Businesses will use their EORI during several stages in the customs process, including when preparing and submitting customs declarations and other related documentation. It’s also used to ensure smoother customs clearance by allowing customs authorities to easily access company information and for ongoing compliance and record-keeping, which can be crucial during audits.
Read more about EORI numbers here.
b. Exporting Business Status
The business exporting into the UK must comply with any relevant export declaration requirements in their own country and have in place any necessary UK licences and certifications for bringing goods into the UK.
c. Customs Declarations
Importing goods into the UK requires a customs declaration, which can be completed by the importer or a customs agent. This declaration should detail the nature, quantity, and value of the goods being imported.
In some cases, you may be eligible to use the simplified declarations for imports, provided you have secured prior authorisation from HMRC.
Read our detailed guide to customs declarations here.
d. Commodity Codes and Classification
Importers need to apply the correct commodity code which is used to set the amount of duty payable and whether an import licence is required. The commodity code should also be used on the import declaration.
Next, classify the goods and check the tariff rate applicable to the goods you are importing. Use the UK Global Tariff (UKGT) to determine the duty and VAT payable. Goods must be accurately valued at the time of import, with the price paid or payable being the main component of valuation.
e. Check for Reduction in Customs Duty
Check if a reduction, or full exemption, on Customs Duty is available. This could be due to any relevant trade agreement between the UK and the country being imported from, for example, under the Developing Countries Trading Scheme (DCTS), or on the basis of the type of goods being imported and their reason for being brought into the UK.
f. Payment of Duties and Taxes
Upon arrival, goods may be subject to customs charges, import duties and VAT, depending on their classification under the UKGT. Payment of these duties and taxes is usually required for the goods to be released from customs.
It may also be possible to delay payment of Customs Duty or submission of customs information.
g. Licences, Certificates and Labelling
Food, plant seeds, and manufactured goods must meet certain labelling standards before they can be brought into the UK. Other items have to meet specific licensing and certification requirements.
h. Clear Customs
An import declaration may be needed to allow your goods to be released into the UK.
i. VAT Reclaim and Duty Refunds
UK VAT registered companies can use their Import VAT Certificate (C79) to claim a refund on the VAT paid on goods imported.
If you have calculated that too much Customs Duty or VAT was paid or the goods were rejected at the border, you can claim a refund or waiver.
2. General Procedures for Exporting Goods from the UK
Exports are also subject to procedural and administrative requirements, including:
a. Export Declarations
Exporters must submit an export declaration to UK customs detailing the goods being sent, their destination, and other relevant details. This can be done electronically via the National Export System (NES).
b. Licensing and Controls
Some goods may require an export license, especially if they are of strategic importance, have military uses, or are to certain destinations with trade restrictions or sanctions.
c. Customs Clearance
Goods need to be presented to customs with all necessary documentation for checks before they can leave the UK. Following clearance, the goods are free to be shipped to their destination.
3. Trade Documentation and Customs Clearances
For both import and export activity, specific documentation will be required. Ensuring all documentation is correct and submitted on time is crucial to avoid delays, penalties, or confiscation of goods.
Businesses may benefit from working with freight forwarders or customs agents who are familiar with the procedures and can manage complex paperwork and submissions.
The following documents are typically required as a minimum:
a. Commercial Invoice: Details the transaction between buyer and seller and is essential for customs valuation.
b. Packing List: Provides details about the contents, weight, and packaging of the shipment.
c. Bill of Lading or Air Waybill: A contract of carriage that proves the goods have been received by the carrier.
d. Certificate of Origin: Sometimes required to determine the economic nationality of the goods for tariffs or trade restrictions.
e. Import/Export Licences: Required for controlled goods and must be presented during the customs clearance process.
f. Other Certifications: Depending on the nature of the goods, additional certifications such as safety and health certificates may be necessary.
g. VAT Certificate (C79): Proof of payment of import VAT.
You should retain all records and documents relating to trading activity.
4. Specific Rules for Importing and Exporting Goods
Trading certain types of goods often requires adhering to specific regulatory frameworks due to their nature and potential impact on public health, safety, and national security.
This could include special rules on licencing or where specific certificates are required.
For businesses engaged in international trade, staying updated on regulatory changes and seeking expertise from customs brokers or legal advisors is crucial to ensure compliance.
To illustrate, we will examine two specific categories: agricultural products and technology.
a. Agricultural Products
Under Health and Safety Regulations, imports must comply with UK standards concerning pesticide use, contaminants, and hygiene. Products are subject to inspection and controls at the point of entry.
Depending on the origin, certain agricultural products may be subject to import tariffs and quotas under the UK Global Tariff schedule.
Importers must also obtain the necessary health certificates for live animals, plants, or products derived from them, ensuring they are free from diseases and pests.
When exporting agricultural products from the UK, Export Health Certificates are required for most food, plant, and animal exports, certifying that the products meet the health requirements of the destination country.
For plant exports, a phytosanitary certificate is needed to confirm the products are pest-free and comply with the importing country’s regulations.
Case study
A UK-based exporter wants to send dairy products to the EU. The exporter needs to ensure the dairy products have the correct export health certificates, and since Brexit, must also navigate new customs procedures to enter the EU market. The process includes pre-notification to EU authorities and passing through designated Border Control Posts (BCPs) for checks.
b. Technology Products
Electronic and tech products being imported into the UK must meet specific UK standards, such as safety and electromagnetic compatibility.
Certain advanced technologies might also require an import licence, especially if they have dual-use (civilian and military) applications.
If the technology involves data collection or processing, compliance with UK data protection laws (aligned with GDPR) is mandatory.
When exporting technology from the UK, some technologies, particularly those that can be used for both civilian and military purposes, are subject to strict export controls and licensing by the UK government.
Technologies containing US-origin components may also require compliance with US export regulations, even when exported from the UK.
Case Study
A UK company develops an encryption software that it wants to sell globally. Before exporting, the company must apply for an export license under the UK’s strategic export control laws because encryption technology can have dual-use applications. The process involves assessing the software’s specifications, its end-use, and the potential risk of diversion to unwanted end-users.
Section C: Taxes and Tariffs
Taxes and tariffs are a key consideration when engaging in trade with the UK. Understanding these elements of the UK system can help businesses plan effectively and take advantage of available tax reliefs and exemptions.
1. UK Tariff System
The UK Global Tariff (UKGT) applies to all goods imported into the UK unless the country from which they’re imported has a trade agreement with the UK or an exception such as a relief or tariff suspension applies. The UKGT was introduced post-Brexit and replaced the EU’s Common External Tariff.
The key features of the UK tariff system include:
a. Tariff Codes
Each product has a specific commodity code that determines the amount of duty payable. These codes are detailed in the UK Integrated Online Tariff system.
b. Ad Valorem Tariffs
Most tariffs are ad valorem, meaning they are based on the percentage of the value of the goods.
c. Seasonal Tariffs
Some agricultural products have tariffs that vary by season to protect local producers during peak production periods.
d. Tariff-Rate Quota
For products subject to a tariff-rate quota (TRQ), you may be eligible to import a certain amount at a reduced or zero rate of customs duty.
Should you exceed this quota, a higher tariff rate will be applied.
2. Step-by-Step Guide to Calculating Duties and Taxes
Step 1: Classify Your Goods
Determine the correct commodity code for your goods using the Trade Tariff tool available on the UK government website.
Check that duty is payable or if an exemption or reduction applies.
Step 2: Determine the Value of Goods
The value used for customs duty is the transaction value of the goods, which includes the cost of the goods, transportation, and insurance until they reach the UK border.
Step 3: Apply the Correct Tariff Rate
Using the commodity code, find out the applicable tariff rate from the UKGT.
Step 4: Calculate VAT
VAT is charged on the total value of the goods, including the cost, shipping, insurance, and any import duties paid.
The standard VAT rate for most goods and services imported into the UK is 20%. However, some items may be taxed at a reduced rate of 5% (such as children’s car seats and home energy) or even zero-rated (like books and children’s clothing). Additionally, certain goods, such as food and children’s shoes, are exempt from VAT. It’s important to check the specific category of the goods you are importing to determine the applicable VAT rate.
Example Calculation: If you import goods worth £10,000 with a shipping cost of £1,000 and insurance of £500, and the duty rate is 5%, then:
• Duty = 5% of (£10,000 + £1,000 + £500) = £575
• VAT (assumed at 20%) = 20% of (£10,000 + £1,000 + £500 + £575) = £2,415
• Total cost including duties and taxes = £10,000 + £1,000 + £500 + £575 + £2,415 = £14,490
3. Tips on Claiming Tax Reliefs and Exemptions
Certain goods such as samples, personal effects, and goods for charitable purposes may qualify for reliefs that reduce or eliminate the duty payable.
If you import goods to process and then re-export, you may apply for relief from duties under the Inward Processing Relief (IPR).
Goods that were exported from the UK and are returned in an unaltered state may qualify for relief from duty.
Goods imported temporarily for specific uses, such as exhibitions or tests, can be imported with reduced or zero duty under temporary admission.
Section D: Data Protection and Copyright
A key feature of the UK market is its robust intellectual property and data protection framework, providing certainty and strong protections for businesses that safeguard their innovations and creative outputs while ensuring fair competition and consumer trust.
1. Data Protection Laws in the UK
Following Brexit, the UK has adopted its version of the General Data Protection Regulation (GDPR), known as the UK GDPR, alongside the Data Protection Act 2018. These laws govern the processing of personal data in the UK. Understanding these regulations is crucial for companies trading with or within the UK, as non-compliance can lead to significant fines and reputational damage.
Key aspects of this framework for business trading in the UK include:
a. Data Protection Principles
UK GDPR sets out several core principles that must be adhered to when processing personal data. These include lawfulness, fairness, transparency, purpose limitation, data minimisation, accuracy, storage limitation, integrity, and confidentiality.
b. Lawful Basis for Processing
Companies must have a lawful basis to process personal data. Common lawful bases include consent, contractual necessity, legal obligations, vital interests, public task, and legitimate interests. Choosing the appropriate lawful basis and documenting it is vital for compliance.
c. Data Subject Rights
Individuals (data subjects) have various rights under UK GDPR, such as the right to access their data, the right to be informed, the right to rectification, the right to erasure (‘right to be forgotten’), the right to restrict processing, the right to data portability, and the right to object. Companies must ensure these rights are respected and provide mechanisms for individuals to exercise them.
d. Data Protection Impact Assessments (DPIAs)
For high-risk data processing activities, companies must conduct DPIAs to identify and mitigate risks to data subjects.
e. Data Protection Officer (DPO)
Companies engaged in large-scale processing of sensitive data or regular and systematic monitoring of data subjects on a large scale are required to appoint a DPO. The DPO is responsible for overseeing data protection strategies and compliance.
f. Cross-border Data Transfers
After Brexit, the UK is considered a separate jurisdiction for data protection purposes. Companies transferring data outside the UK need to ensure they have appropriate safeguards in place, such as Standard Contractual Clauses (SCCs) or adequacy decisions.
g. Reporting Data Breaches
Companies must report certain types of data breaches to the relevant data protection authority (the Information Commissioner’s Office, or ICO, in the UK) typically within 72 hours, unless the breach is unlikely to result in a risk to the rights and freedoms of individuals.
These principles and rules result in specific implications for companies trading with the UK, who must ensure that their data handling practices comply with UK GDPR. This includes businesses that are based outside the UK but handle the personal data of UK residents.
Companies should review their contracts, privacy policies, and internal policies to ensure they are GDPR-compliant. This includes clear communication about how personal data is used, stored, and protected.
Training employees on data protection best practices and legal requirements is crucial to ensure that personal data is handled correctly.
Robust security measures are also critical to protect personal data against unauthorised access, alteration, and destruction. Regular audits and updates to security practices should be conducted to address any vulnerabilities.
2. Copyright Laws Specific to Digital Products and Services
Copyright law protects literary, dramatic, musical, and artistic works, as well as typographical arrangements of published editions. In the digital context, this includes software, databases, and digital content like music and videos.
In the UK, key copyright provisions for digital products and services include:
a. Duration
Copyright in literary, dramatic, musical, and artistic works lasts for 70 years after the death of the creator, encouraging innovation and investment in creative works.
b. Rights Covered
This includes the right to reproduce the work, prepare derivative works, distribute copies, perform publicly, and display publicly.
c. Software and Databases
Software and databases are protected by copyright. Licensing agreements are crucial in governing the use of such digital products.
d. Licensing and DRM
When trading digital products and services, it’s important to have clear licensing agreements that specify how the content can be used. Digital Rights Management (DRM) systems may also be used to protect against unauthorised copying or distribution.
e. Fair Dealing
The UK copyright law permits limited uses of copyrighted material without the owner’s permission under certain circumstances known as “fair dealing” – for research and private study, criticism or review, and news reporting.
Case Study
A UK-based app developer creates an educational software that includes both proprietary content and user-generated data. To comply with data protection laws, the developer implements features that allow users to access their data, correct inaccuracies, and request data deletion. For copyright, the developer uses licensing agreements that specify how the software can be used and employs DRM to prevent unauthorised distribution.
Section E: Travelling for Business and Working in the UK
The UK offers numerous opportunities for international business and employment. However, travellers must ensure they comply with the UK immigration rules and have the relevant permission to come to the UK for their intended purpose.
The type of permission you need to come to the UK will depend on factors such as your nationality and your reason for travel. To work in the UK, most foreign nationals will need a work visa.
Common routes for those undertaking trading activity with the UK include:
1. Standard Visitor Visa
Unless you are non-visa national, such as a European or US citizen, you will need a visa to visit the UK for up to 6 months for business purposes.
The Standard Visitor Visa allows short-term business-related activities such as attending meetings, conferences, seminars, or interviews; negotiating or signing deals and contracts; attending trade fairs, provided no selling is involved; and conducting site visits and inspections.
You are not, however, allowed to undertake paid employment while in the UK as a visitor. You should instead apply for the appropriate work visa.
The visa allows stays of up to 6 months. When applying, the applicant will need to provide proof of their business purpose and that they have sufficient funds to cover their costs while in the UK.
Foreign nationals looking to stay in the UK for longer than six months, or if their reason for travel is not covered under the Standard Visitor visa, an alternative visa route would need to be sought.
Read our guide to the UK visitor visa here.
2. Innovator Founder Visa
The Innovator Founder visa is a work visa route tailored for entrepreneurs with innovative and scalable business ideas new to the UK market. It allows the holder to come to the UK to set up and run their own business.
To qualify, the business must be novel and innovative and show potential for job creation and significant growth. The business must also be endorsed by an authorising body before the visa application can be made.
Read our guide to the Innovator Founder Visa here.
3. Self-Sponsored Skilled Worker Visa
For entrepreneurs who prefer to independently establish and manage their business within the UK, self-sponsorship under the Skilled Worker Visa could be an option. This requires setting up a UK-based company, obtaining a sponsorship licence, and fulfilling specific roles with adequate salary as per the new threshold of £38,700.
4. Expansion Worker Visa
This visa supports senior managers or employees of international companies planning to establish a new branch or subsidiary in the UK.
The overseas company will be required to secure a UK sponsorship licence before the worker can apply for their visa.
Applicants must then demonstrate significant experience, relevant qualifications, and the company’s capability to sustain a new operation within the UK.
Read our guide to the Expansion Worker visa.
5. Global Talent Visa
Designed for recognised leaders in various fields, this visa offers flexibility and independence without the need for a specific job offer in the UK. It requires endorsement from an endorsing body before the visa application can be made.
Read more about the Global Talent visa here.
6. Case Study
A US-based tech company plans to send a team to the UK to establish a new branch. They use the Standard Visitor Visa for initial exploratory visits.
The company then registers with Companies House and applies to the Home Office for a sponsorship licence to allow a senior manager to relocate to the UK and set up the operations. They also implement compliance protocols to adhere to UK corporate, immigration and employment laws.
With the sponsor licence granted, the company assigned a Certificate of Sponsorship (CoS) to the senior manager in order for him to apply under the Expansion Worker Visa route, along with his supporting documents and proof of English language proficiency.
The visa was granted, allowing the manager to temporarily relocate to the UK, secure office space, and begin assembling a local team. Within six months, the company had a functioning UK branch ready to service new and existing projects and clients.
Section F: Regulations on Setting Up a UK Business Presence
Establishing a business presence in the UK as an overseas entity involves navigating specific requirements and obligations crucial for compliance and operational success.
Non-residents are permitted to set up a UK company, provided they meet the legal requirements. In most cases, this will mean establishing a limited company by registering the business with Companies House, appointing a director, and setting up a registered office within the UK.
You will also need a registered office address in the UK for all official communications. This address must be in the same country of the UK where your company is registered (e.g., England, Wales, Scotland, or Northern Ireland).
Registered businesses must obtain a Unique Taxpayer Reference (UTR), register for VAT if annual turnover is over £90,000 and comply with corporate tax obligations.
If you employ staff, you must comply with UK employment laws, including minimum wage, working hours, and health and safety regulations.
Additional regulatory requirements may apply depending on the sector, such as certain professional qualifications, especially for regulated professions like healthcare or education.
Read more about setting up a business in the UK here.
Section G: Trading Myths Dispelled
Trading with the UK can sometimes be surrounded by misconceptions, in particular following post-Brexit reforms, with ongoing adjustments in trade relationships and the development of new ways of working with Britain. It’s important to dispel these myths so that parties can better evaluate the real opportunities and challenges of engaging in trade with the UK.
Myth 1: Trading with the UK has become too complicated post-Brexit
Reality: While it’s true that Brexit introduced changes in how trade is conducted between the UK and EU countries, the UK has worked to establish clear guidelines and new trade agreements to simplify processes.
The government provides extensive resources through the Department for International Trade and other agencies to assist businesses in navigating these changes. Trading with the UK still offers tremendous opportunities, thanks to its significant global financial influence and strong consumer market.
Myth 2: The UK no longer has strong trade relations with European countries
Reality: Despite no longer being a member of the European Union, the UK continues to maintain robust trade relations with European countries. The Trade and Cooperation Agreement (TCA) between the UK and the EU ensures zero tariffs and quotas on goods that comply with the appropriate rules of origin, facilitating continued strong trade ties.
Myth 3: High tariffs apply to all imports and exports in the UK
Reality: The UK Global Tariff (UKGT), which replaced the EU’s Common External Tariff, applies to goods imported into the UK. However, many goods benefit from lower tariffs, and some are tariff-free. Additionally, the UK has secured several trade agreements that allow tariff-free or reduced-tariff trade with many countries.
Myth 4: UK data protection laws are less stringent post-Brexit
Reality: UK data protection laws remain some of the most stringent in the world. The UK has adopted its own version of the GDPR, known as the UK GDPR, alongside the Data Protection Act 2018. These laws ensure that personal data continues to be processed with a high standard of protection.
Myth 5: It’s difficult for non-UK residents to start a business in the UK
Reality: The UK is one of the easiest places to start a business, according to global business rankings. The process for setting up a business as a non-resident is straightforward, involving the same steps as for residents: registering the business with Companies House, setting up a UK bank account, and ensuring compliance with tax laws.
The UK actively encourages foreign direct investment and offers various incentives for entrepreneurs and businesses to establish operations within its borders.
Myth 6: You need a UK company to export goods to the UK
Reality: International businesses can export goods to the UK without needing to establish a UK-based company. However, you may need a UK address for customs purposes and must comply with UK product standards and regulations. Using a customs agent or getting support from logistics providers can simplify compliance and import processes.
Summary H: Summary
Trading with the UK offers significant opportunities across various sectors.
For foreign entities looking to establish or expand their trading relationships with the UK, the key practical considerations include:
a. Trading Frameworks
The UK, with its strategic geographic position and robust economic environment, is a major player in international trade. Adhering to the UK Global Tariff and understanding specific trade agreements are crucial.
b. Importing and Exporting
Knowledge of detailed procedures for moving goods, including necessary documentation and customs clearances, helps in avoiding delays and penalties. Specific rules for different types of goods, such as agricultural products and technology, require careful attention to ensure compliance.
c. Taxes and Tariffs
Familiarity with the UK tariff system and how to calculate duties and taxes, along with taking advantage of tax reliefs and exemptions, can significantly affect the cost-efficiency and legality of trade activities.
d. Data Protection and Copyright
Compliance with the UK’s stringent data protection laws and copyright rules is essential, especially for businesses dealing in digital products and services.
While trading rules and regulations in the UK are strict, they are designed to ensure fair trade practices, protect intellectual property, safeguard personal data, and maintain high standards of goods and services entering and leaving the market.
The result is a robust trading framework that facilitates smoother operations and greater market access and fosters trust between partners and consumers.
Section I: FAQs about Trading with the UK
What do I need to start trading with the UK?
To start trading with the UK, first, check if you need a license for your goods and understand applicable tariffs via the UK Global Tariff. Ensure your goods comply with UK standards and register for VAT if your turnover exceeds £90,000. Consider hiring a customs agent to facilitate import/export documentation.
How has Brexit affected UK trade regulations?
Brexit has led to the UK no longer being part of the EU Customs Union and Single Market, which means that trade between the UK and EU now follows the rules agreed upon in the Trade and Cooperation Agreement (TCA). This includes checks and controls on goods at borders, resulting in additional steps for importers and exporters.
Are there any trade agreements that affect trading with the UK?
The UK has sought to replicate or negotiate new trade agreements with countries worldwide to ensure continuity and access to foreign markets post-Brexit. These agreements can affect tariffs, customs processes, and regulatory measures. It’s advisable to check the current status of trade agreements between your country and the UK.
What are the key legal considerations for exporting to the UK?
Key legal considerations for exporting to the UK include ensuring compliance with UK product safety and labelling requirements, adhering to standards and regulations, protecting intellectual property rights, and following data protection laws. It’s crucial to understand customs processes and verify that all exported goods meet the specific legal criteria set by UK authorities.
How can I find out the tariff applicable to my product?
You can find the applicable tariff using the Trade Tariff Tool available on the GOV.UK website. You will need to know the commodity code for your product to use this tool, which will provide details on duty rates and any other requirements.
What steps should I take to ensure compliance with UK data protection laws?
To ensure compliance with UK data protection laws, process personal data according to UK GDPR principles, implement strong security measures, respect individuals’ rights over their data, and, if necessary, appoint a Data Protection Officer. Additionally, register with the Information Commissioner’s Office (ICO) if your business activities require such registration.
Can I sell my products online in the UK without setting up a business there?
Yes, you can sell products online to UK customers without a physical presence in the UK. However, you must comply with UK consumer protection laws, data protection regulations and register for VAT if your sales exceed the threshold.
What is required to temporarily bring goods into the UK for trade shows or exhibitions?
For temporary imports like trade show exhibits, you might use the ATA Carnet system, which simplifies the customs process for temporary imports that will be re-exported within 12 months. It’s advisable to check specific requirements and whether your goods qualify for this system.
Are there specific rules for importing food products into the UK?
Yes, importing food into the UK requires adherence to strict safety standards. You must ensure your products comply with UK food safety laws and labelling requirements and undergo the necessary health checks, especially for animal and plant products.
How can I get assistance with UK trade regulations?
You can contact the Department for International Trade (DIT) for guidance and support, utilise services from trade advisory groups, or consult with legal and customs experts to navigate the complexities of UK trade regulations effectively.
Section J: Glossary of UK Trade Terms
UK Global Tariff (UKGT): The tariff schedule that applies to all goods imported into the UK, providing information on duty rates and conditions for imports.
EORI Number: An Economic Operators Registration and Identification (EORI) number is a unique identifier assigned to businesses and individuals that are involved in importing or exporting goods into or out of the European Union and the United Kingdom.
Incoterms: Incoterms, short for International Commercial Terms, are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) that are used in international commercial transactions.
Commodity Code: A numerical code used to classify goods for customs and statistical purposes, facilitating the identification of specific products.
Trade and Cooperation Agreement (TCA): The agreement between the UK and the EU that governs trade relations, including tariff-free and quota-free trade in goods that comply with rules of origin.
Department for International Trade (DIT): The UK government department responsible for promoting trade and investment, supporting businesses in exporting from and investing in the UK.
UK GDPR: The UK General Data Protection Regulation, which governs the processing of personal data in the UK, aligned with the principles of the EU GDPR.
Data Protection Act 2018: UK legislation that supplements the GDPR, providing additional provisions and regulations for data protection in the UK.
Companies House: The UK government agency responsible for the registration and regulation of companies, including maintaining the register of company information.
VAT (Value Added Tax): A consumption tax levied on goods and services at each stage of production or distribution, with the burden ultimately borne by the end consumer.
Tariff Relief: Exemptions or reductions in import duties or tariffs granted under specific conditions, such as for certain types of goods or under trade agreements.
Customs Agent: A licensed professional or organisation authorised to act on behalf of importers or exporters in dealing with customs authorities and facilitating customs clearance.
Trade Associations: Organisations that represent specific industries or sectors, providing advocacy, support, and networking opportunities for businesses within those industries.
Intellectual Property: Legal rights that protect creations of the mind, such as inventions, literary and artistic works, trademarks, and trade secrets.
Standard Visitor Visa: A visa category that allows individuals to visit the UK for tourism, business, or other permitted activities for up to 6 months.
ATA Carnet: An international customs document that simplifies the temporary importation and exportation of goods for trade shows, exhibitions, or similar purposes.
Section K: Additional Resources
GOV.UK – Trade Tariff
https://www.gov.uk/trade-tariff
Provides detailed information on tariffs, import and export conditions, and access to the UK Global Tariff tool.
Department for International Trade (DIT)
https://www.gov.uk/government/organisations/department-for-international-trade
Offers support for businesses exporting from and investing in the UK, with guides on trade agreements and market access.
Companies House
https://www.gov.uk/government/organisations/companies-house
Central registry for UK companies, essential for setting up a company in the UK, including access to all necessary forms and online registration.
UK Intellectual Property Office
https://www.gov.uk/government/organisations/intellectual-property-office
Information on copyright, patents, designs, and trademarks in the UK, including how to apply for protection and enforcement guidelines.
Information Commissioner’s Office (ICO)
https://ico.org.uk/
Enforces data protection laws in the UK and offers guidance on compliance with the UK GDPR and the Data Protection Act 2018.
British Chambers of Commerce (BCC)
https://www.britishchambers.org.uk/
Supports member businesses in international trade and provides a network of connections across the UK and internationally.
Confederation of British Industry (CBI)
https://www.cbi.org.uk/
A leading business organisation in the UK, offering advice on policy and business issues.
Federation of Small Businesses (FSB)
https://www.fsb.org.uk/
Provides members with business services, including advice, financial expertise, support, and a powerful voice in government.
UK Export Finance (UKEF)
https://www.ukexportfinance.gov.uk/
The UK’s export credit agency helps companies win, fulfil, and get paid for export deals.
Institute of Export & International Trade
https://www.export.org.uk/
Provides qualifications, training, and expertise to help businesses export more effectively.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing & Content Agency for the Professional Services Sector.
