Have you ever thought about exporting goods and services around the world? If the answer is "no", maybe the time is right to think again.
According to the Office for National Statistics (ONS), demand for British goods and services is booming with exports at the record high of £621 billion in the 12 months to June 2018.
Global demand for British-made goods increased 6.3% year-on-year to £343 billion, while UK-based services grew 2.2% to £278 billion over the same period.
What's more, amid a background of Brexit uncertainty, exports of UK goods and services to non-EU countries amounted to £342 billion in 2017 - highlighting worldwide demand.
These are eye-watering figures for any ambitious business owner who makes goods or services in the UK, and the question is how can your business get a slice of this action?
What goods and services are in demand?
The obvious place to start is to look into whether or not your business' goods or services are in demand outside of the UK.
Demand for scrap iron or steel rose 42% in 2017, while printed books, heavy machinery, dentist or barber chairs are just a few unusual examples of ways small businesses could get in on the act.
Here's a list of the UK's top 200 in-demand goods and services in 2017.
Research your market
Assuming you've got something to take to an overseas market, the next step is to research where those goods and services are in demand.
Once you've located a potential market, it's vital to assess whether or not you understand the language, the traditions and ways of doing business there.
Then it's time to focus on:
- what are the unique selling points of your goods or services?
- are there any legal or political issues to consider?
- what resources will you need to pull this off (finance, expenses, time, skills)?
- who will leading the project?
- what are the risks?
- getting paid and delivering your products on time.
You need to consider potentially modifying your goods or services to fit your target market, so that they meet local standards and regulations as well as your new clients' preferences.
Will you sell your goods or services directly, locally or online? You could also consider working with a distribution partner who knows your new market.
Speaking of partners, transport may be needed to get your goods or services to your new customers - and a partner who regularly distributes to your chosen market can cut down on costs.
All goods need to be packaged and labelled for transportation. You'll also need to clarify on customs procedures, insurance and clearance.
VAT duties on exports
Rules for VAT-registered businesses vary depending on where you are exporting to and the value of your goods.
In the EU
Exports within the EU were worth £274 billion in 2017, and prior to the UK's scheduled exit from the EU on 29 March 2019 you need to charge VAT if you'd do so for customers in the UK, or register for VAT in the country you are selling to if:
- you are selling to consumers
- the total value of goods is over the country's distance selling threshold (usually €35,000).
There is an extra declaration, called Intrastat, if you move goods within the EU that are worth more than £250,000 in a 12-month period.
Outside the EU
The fastest growing export market for the UK since 2010 is Oman, with exports increasing by 354% to £3 billion last year.
This was followed by Macedonia, where UK trade grew 318% to £1 billion, and then Kazakhstan, which was up by 210% to £2 billion.
You may need to pay tax or duty in the country you are exporting to.
If you are VAT-registered, you can zero-rate VAT on most goods.
Discuss your exports strategy with us.