Doing business

(Last updated: 23 Nov 2007)
 

Business opportunities

Austrade’s business development specialists have prepared a range of market profiles that offer potential to assist in your exporting investigations. Austrade’s in-market teams have identified opportunities for Australian exporters in various industries (see 'Profiled industries in this market' on the left side of this page).

In conjunction with the market profiles, the Opportunities Online portal may be a useful addition to your information sources. The database established by Austrade aims to deliver international sales leads ('export opportunities'), including tenders, identified by our overseas network to Australian businesses.

Registering is simple and once this is done you will have the option of accessing a weekly newsletter featuring the most recent opportunities uploaded onto the system in industry sectors of interest to you. Another feature is the ability to view, and also print, the complete page of opportunity details.

For general inquiries concerning Austrade’s services, please contact Austrade Direct on 13 28 78.

Business etiquette

Business practices

The business culture is more conservative than Australia, with executives preferring a more formal approach. Most business people will wear suits, although ‘smart-casual’ is becoming more widespread in some industry sectors. If in doubt, always wear a suit. In addition, please note that the secription of 'lounge suit' on invitations typically means business attire, not 'smart casual'.

Many UK companies are entrepreneurial and interested in new ideas, but rarely agree to a ‘cold’ meeting. Expect to introduce your company and proposition at least three to four weeks before the planned meeting date. Make an introductory telephone call and follow-up with information by post, fax or email.

Please also note:

Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Tariff

The UK is part of the harmonised trade system of the European Union and gives preference to associate members of the Union, developing countries and European Free Trade Association (EFTA) members. Most duties are ad valorem (%), based on the GATT Valuation Code (approximately CIF value (Incoterms 2000)). Common External Tariff (CET) is applicable to other countries, including Australia

Before shipping any goods to the UK, you should obtain a written customs duty ruling from the customs service in the destination country. These rulings are called Binding Tariff Information (BTI).  Getting a BTI is free and will prevent any conflict over customs or excise duty.

HM Customs & Excise (VAT)
Alexander House
21 Victoria Avenue
Southend-on-Sea SS99 1AA
Tel: +44 0 1702 366 077
Fax: +44 0 1702 367 342

HM Customs & Excise (International Development)
7^th Floor, New King’s Beam House
22 Upper Ground
London, SE1 9PJ
Tel: +44 020 7620 1313

Classifications

Verbal advice on classification matters can be obtained from the Classification Help Line by telephoning +44(0)1702 366 077 between 9.00am and 2.30pm from Monday to Friday (UK time).

Non-bariff barriers

Import restrictions

Import licences are required for a limited number of items including agricultural products. These licences are valid for up to 12 months and are issued by the Department of Trade and Industry (DTI) for industrial products, or by the Rural Payments Agency for agricultural products. All agricultural products are subject to quotas and import licences under the Common Agricultural Policy (CAP). Minimum import prices are enforced through variable import levies. Australian issued Certificates of Authenticity are required on meat. Import of specified products without a quota license is prohibited. These products include:

• cereals and rice
• beef and veal
• sugar and isoglucose
• oils and fats
• seeds
• milk and milk products
• wine
• processed fruit and vegetables
• sheepmeat
• buffalo
• goat meat

Products including textiles, steel, footwear, ceramic products, toys, porcelain, and glass products originating in certain non-EU countries are subject to quota restrictions and also require an import license. Pre-packed goods and spirits (except perfumed or medicated cordials) must be packed in quantities specified by regulations. Quantities must be shown in metric measures, although imperial measures can also be displayed.

All products of animal origin for human consumption must come from an EU approved establishment. AQIS can undertake the approval process and all shipments must note the official approved establishment number.

Information leaflets on the rules for trading specific goods (sheep meat and goat meat, sugar, oils and fats, eggs, poultry meat, pigmeat, beef and veal, milk and milk products, fresh fruit and vegetables, bananas, processed fruit and vegetables, cereals, rice, wine, processed goods and victualling) are available from the CAP Examination and Document Control Team Tel: +44(0)191 226 5239.

A range of plants are prohibited, including those which are CITES listed and endangered. AQIS has information from the UK Ministry of Agriculture Fisheries and Food on the licence and certification requirements of most items subject to licensing. Phytosanitary certificates are also required for plants, some cut flowers, rooted plants and plant material, trees and shrubs.

Animals, plants and their products are subject to detailed regulations, including EU directives and legislation. Details may be obtained from the Australian Quarantine and Inspection Service or the Department of Agriculture, Fisheries and Forestry-Australia.
 

Product certification, labelling and packaging

Product certification

Certificate of insurance

Not obligatory unless quotation was CIF. Useful for valuation in case of disputes.

Special certificates

Livestock and other animals require health certificates issued by the approved authority in the country of origin. The Australian Quarantine and Inspection Service, the Department of Agriculture, Fisheries and Forestry-Australia or the relevant state department of agriculture are generally responsible for this.

In some cases, such as for dogs and cats (which are subject to quarantine on entry to the UK) and some other animals, certificates must be supported by permits issued by the Department of Environment.

Plants, seeds and plant products, including fruit, vegetables and cut flowers, may require import permits from the UK Ministry of Agriculture, Fisheries and Food as well as phytosanitary certificates issued by the approved body in the country of origin.

Certain foods require health certificates in addition to those previously mentioned
Swine from Australia are not permitted for import to the UK or EU.

Customs sights all original certificates and requires photocopies for its records.
The Single Administrative Document is accepted by all EU countries for cross border trade if the goods are of a value exceeding £600. The document is also used for trade outside the EU if the goods are first imported into an EU country.

Import declarations

Customs Handling of Import and Export Freight is a computerised entry processing system, which allows declarants or their representatives to input data directly to customs at locations with the facility of Direct Trader Input. 

Trader unique reference number

Every importer needs a Trader Unique Reference Number (TURN). This number is used to identify the addresses to which the single monthly import VAT certificate is sent. To obtain a TURN contact:

EPCO (TURN)
1^st Floor central
HM Customs and Excise
Alexander House
Victoria Avenue
Southend-on-Sea
Essex SS99 1AA
Tel: +44 0 1702 366 425
Fax: +44 0 1702 367 097

Your full name, address and VAT registration number (if any) must be included in the letter.

Commercial invoice

No prescribed forms. Generally, a minimum of two copies are required. Different methods of payment may require additional copies.

Invoices must give clear and precise descriptions of goods, terms of sale and of payments, all details necessary to establish full prices paid, gross and net weights and the country of origin. Separate certificates of origin are not mandatory but may be required depending on the terms or method of payment or as documentary proof of origin for certain goods.

The contract of purchase (or equivalent), the bill of lading (where appropriate), the transport contract, the insurance contract, the certificate of origin (where appropriate), and the invoice are required.

Bill of lading

No special requirements. A minimum of two original copies is required and additional copies are required for customs if goods are transshipped en route.

Packing list

Not obligatory but simplifies clearance if a variety of goods are packed in different cases.

Labelling

All directives of the European Council must be met as well as the local and national regulations. Information on the labelling of products in the interest of consumers and illustrative compliance procedures are available.

Regulations also require many goods to be marked with their country of origin. It is recommended that all Australian made products are marked with 'Made in Australia'.

Industrial policy and internal market directives for all products can alter in the EU marketplace.

CE Marking

The European Community is steadily replacing national rules and regulations with European wide directives. The CE mark can only be used on products which meet all the appropriate directives. If an exporter can show a product meets the appropriate European directive then the products can be sold freely throughout Europe.

CE markings are applied by the manufacturer, who is responsible for ensuring that the product concerned meets the requirements of the relevant directive(s). Proof of conformity should be made available in the form of technical documentation. The requirements impose procedures on the manufacturer and certain responsibilities are transferred to the importer.
 
To permit the use of a CE mark on a product, proof that the item meets the relevant requirements must be documented. Sometimes this is achieved using an external test house which evaluates the product and its documentation. Often it is achieved by a company-internal self-certification process. In any case the responsible organisation (manufacturer, representative, importer) has to issue a EC-Declaration of Conformity (EC-DoC) indicating his identity (location, etc.), the list of European Directives he declares compliance with, a list of standards the product complies with, and a legally binding signature on behalf of the organisation. The EC-DoC underlines the sole responsibility of the manufacturer. Parts of the certification process for the CE marking could be performed by third party test houses or certification bodies; in case that this is mandatory the CE symbol also includes a number that identifies the so called Notified Body.

To be strictly accurate, there are also two forms of Declaration, either a 'Declaration of Conformity' or a 'Declaration of Incorporation' under the Machinery Directive. For example, a stand alone machine, which requires only a power source to operate would be issued with a Declaration of Conformity. Whereas, a machine which requires additional systems, attachments, feed conveyors, etc., before it can provide its intended function, must be issued with a Declaration of Incorporation. In this latter case it is illegal to CE Mark such a machine. This can only be achieved once the machine has been finally installed and all other elements incorporated into the system, then a final risk sssessment is performed to verify compliance of the system and a final Declaration of Conformity is then issued.

You can obtain information on CE marking and testing requirements from the National Association of Testing Authorities (NATA).

The Technical Information Group can also assist with technical requirements, regulations and standards worldwide .
Tel: +44 020 8996 7111
Fax: +44 020 8996 7048

Standards

The British Standards Institute has a searchable website for registered visitors, which gives the standards used by industry and business to increase efficiency and safety. The website inspects commodities and tests products to ensure they are what they claim to be and do what they claim to do efficiently and safely. The site also provides a range of related support services.

Accreditation

The UK Accreditation Service provides more information.

Weights and measures

Various Acts cover weights and measures. The Units of Measurement Regulations 1986 define and authorise the use of SI units of measurement for economic, health, safety and administrative purposes and provide that certain imperial and other units are no longer authorised for the same purposes.

Insurance

Normal commercial practices.

Methods of quoting and payment

Quotations should be in Pound Sterling or Australian dollars on CIF UK port or airport basis. Payments are usually by letter of credit, sight draft or on terms of 30, 60 or 90 days, or as agreed between the parties.

Public health requirements

View more information relating to food products.

Importation of certain drugs (mainly vaccines, toxins, anti-toxins and insulin preparations, as well as certain plant derivatives) are prohibited unless a licence is obtained form the Ministry of Health.

All new ethical and veterinary drugs (imported as well as locally manufactured) are subject to the provisions of the UK Medicines Act. 

Taxation

Value Added Tax is a tax on consumer expenditure.

Most business transactions involve supplies of goods or services. VAT is payable if they are:

• Supplies made in the United Kingdom (UK) or the Isle of Man
• By a taxable person
• In the course of a business
• Are not specifically exempted or zero-rated

VAT applies equally to locally produced and imported products.

There are three rates of VAT:

• A standard rate, currently 17.5 per cent 
• A reduced rate, currently 5 per cent
• A zero rate

Some supplies are exempt from VAT.

VAT paid on a business visit can be reclaimed. There are a range of companies who provide VAT reclaim services in the UK, and Austrade London can provide further advice on this.

Late VAT payments are subject to rising percentage surcharges depending on the frequency of offences in 12-month periods. Most goods imported for use or demonstration at exhibitions are usually exempt from VAT if covered by appropriate documentation.

To obtain advice about the VAT, contact:

VAT Business Advice Centre in London
Thomas Paine House
Angel Square, Torrens Street
London EC1V 1TA
Tel: +44 020 7865 3100
Fax: +44 020 7865 3171

Or please see the VAT Guide.

The main corporation tax rate is currently 30 per cent, and the rate for small companies is 19 per cent.
 
For additional information please see: www.hmrc.gov.uk/ctsa/ct_rate_band.htm

The Inland Revenue has special information if you are starting-up a new UK company as well as general taxation information.