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Goods - United Kingdom

Updated 02/2011

Legal requirements

The UK law on selling goods is covered by the Sale of Goods Act 1979, amended by the 1994 and 2002 Acts.

Restrictions

Food sector

If you work in a food business there are general requirements listed on the website of the Food Standards Agency. This overview covers the main European and UK legislation on food imports and exports, safety, labelling, product withdrawals and recalls etc.

Non-food sector

The UK's Trading Standards Institute (TSI) provides information on various rules and restrictions for the sale of specific goods, e.g. animal products, age-restricted goods, and on issues such as weights and measures.

Excise duties

Excise duty is usually charged on the production rather than sale of goods. The UK's 'environmental' taxes also take account of the production of waste products, such as greenhouse gases. HM Revenue and Custom's website provides more detail on excise duties.

Administrative procedures

International VAT number

If you are a business and the goods or services you provide count as what is known as 'taxable supplies', you'll have to register   for VAT if:

  • your turnover for the previous 12 months has gone over the 'VAT threshold', currently £70,000; or
  • you think your turnover will soon go over the VAT threshold.

Further information on VAT can be found on Business Link.

HM Revenue & Customs (HMRC) allows people to pay VAT online.

In addition, if a business supplies goods to traders registered for VAT in other EU countries, it should complete a European Sales Listing (ESL) and send it to HMRC.

Invoice requirements

If you are a limited company, sole trader and/or VAT registered, the law requires that you provide certain information on invoices you send to your customers.

Limited companies

Limited companies must have the following information on their invoices:

  • the full company name as it appears on the certificate of incorporation;
  • any business name used in your business; and
  • an address where any legal documents can be delivered to you if you are using a business name.

Limited companies may include the names of the directors on their invoices. However, if you are going to publish this information on your invoices, you must include the names of all directors.

Sole traders

Sole traders must have the following information on their invoices:

  • any business name being used if the surname of the sole trader is not being used;
  • an address where any legal documents can be delivered to you if you are using a business name.

VAT registered

If you are registered for VAT, whether the business is a limited company or a sole trader, you must also put the following information on your invoices:

  • a unique and sequential identifying invoice number;
  • your customer's name and address;
  • your VAT registration number;
  • date of supply to the customer;
  • a description sufficient to identify the supply of goods or services;
  • the quantity of the goods or services with a unit price - excluding VAT;
  • name and address of your business;
  • the rate of VAT per item; and
  • the amount owed without VAT added.

If you are selling to an individual customer or a non-VAT registered company in another European Union (EU) country, you must pay VAT. However, if the customer is a VAT-registered company in another EU country, you do not charge VAT, but you must:

  • obtain your customer's VAT number (including the two-letter country prefix) and include it with your own VAT number on your VAT sales invoice;
  • send or transport the goods to your customer within three months, or six months if the goods need processing before being sent; and
  • keep valid commercial evidence that the goods have been removed from the UK within the correct time limit.

Your evidence can include a number of different documents - e.g. the customer's order or your sales invoice. It must clearly identify the:

  • supplier;
  • transporter of the goods;
  • customer;
  • goods and their accurate value;
  • mode and route of transport; and
  • EU destination.

If you cannot fulfil these conditions, you will have to pay VAT at the appropriate UK rate.

Trade of goods declaration

Goods that have been produced in the EU, or that have been imported into an EU country with duty paid, are "in free circulation " within the EU. Customs duty is not payable on acquisitions (imports or purchases) of goods that are in free circulation.

Customs warehousing

Duty is normally payable on imports from outside the EU when the goods are first brought into the EU. However, goods from outside the EU can be imported into the EU without paying the normal customs duty, provided they are not released into free circulation - e.g. if they are held in a bonded warehouse.

You can buy goods that are not in free circulation without paying duty, provided that you do not put them into free circulation. Duty becomes payable when the goods are released into free circulation so that you can sell them on to your customers.

A similar system applies to excise duty on products such as alcohol and tobacco.

Submitting statistics

VAT-registered businesses that trade in goods with other EU member states are required to provide details of these transactions which are used for statistical purposes. Intrastat is the system used to collect these statistics.

Suspending tariffs or obtaining new tariff quotas

Temporary Duty Suspensions and Tariff Quotas   allow the duty free importation of raw materials, components and semi-finished products which cannot be supplied (or supplied in sufficient quantities) from Community sources and used in a process to make another product.

This regime cannot be used simply to import goods for resale. Suspensions allow unlimited quantities to be imported into the EU whereas quotas allow limited quantities to be imported.

Shipping certain goods

The international transport of goods by shipping involves export and dispatching procedures and the completion of certain documentation.

You will need an Export Cargo Shipping Instruction, to provide the shipping company with details of your goods and set out your instructions for the shipment. It follows up on the initial booking, when space will have been confirmed on particular sailings. The process is often concluded by telephone.

You will also need:

  • a Dangerous Goods Note (DGN),  if the goods are hazardous; and
  • if the goods are non-hazardous, a Standard Shipping Note (SSN).  This gives the port of loading and the shipping company the information it needs to handle your goods correctly.

You will also need one of the following:

  • Bill of Lading - issued by the carrier, and which shows that the carrier has received the goods, provides evidence of a contract of carriage, and serves as a document of title to the goods.
  • Sea Waybill - fulfils the same practical functions as the bill of lading, but does not confer title to the goods. It is often used where there is a well-established trading relationship between a buyer and seller.
  • Moving Goods by Sea

Resources

The Business Link website provides an introduction to general trading rules as well as special rules for retailers or specialised sectors. You will also find information here on international trade.

Check also the legislation on this topic in:

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