Exporting to the United Kingdom

The United Kingdom, which has the second largest economy in Europe and the fifth largest economy in the world, is one of Turkey's strong trade partners. Thanks to its flexible labor laws and dynamic market, the United Kingdom is among the first countries many global companies apply to for export. Since Brexit on January 31, 2020, the UK has stopped regulating its rules within the framework of Europe and has begun to regulate freely. Therefore, it is essential to understand the tax and VAT rates, which differ from other European countries, and to pay attention to these factors when exporting.

Exporting to the UK has no additional difficulties compared to other countries. With a population of 68 million, the UK opens doors to large markets and holds a significant place in e-commerce traffic. Nearly 90% of the population shops online. With a gross domestic product of $2.7 trillion and an average annual growth rate of 1.2%, it is a country with developed commercial activities. Economic relations with Turkey are valued at around $18.5 billion.

How to Export to the United Kingdom?

There are some points that need to be known before exporting to the UK, just like to any other country. Understanding the target market and customer, thus having general knowledge about the UK, comes at the forefront of necessary steps. For example, one should know that Amazon, based in the United States, is also the largest e-commerce hub in the UK, and it is essential to be familiar with the laws and contract rules of such sites. We can say that e-commerce sites commonly used by everyone for exports to the UK would be a good starting point.

Although the procedures are easy, finding the right market and being permanent in the market may not be that easy. In the foreign trade environment, you can only grow your company with the right digital marketing techniques and project management. As ODS Consulting Group, we are ready to support your firm with our experience in planning, organization, customer loyalty, project management, and market analysis.

What Are the Companies Exporting to the United Kingdom?

With foreign trade figures amounting to $691.97 billion, the country has reached a significant export volume. There are many sectors that stand out in our exports to the UK. The main ones include gold, ready-to-wear products, electrical and non-electrical machinery, and iron and steel products. The list of standard products exported to the UK along with their percentages is as follows:
· Motor Vehicles: 23.30%
· Knitted Apparel: 13.80%
· Precious Stones: 11.90%
· Electrical Machinery: 10.30%
· Mechanical Devices: 7.40%
· Non-Knitted Apparel: 6%
· Others: 27.30%

Like other European countries, we can say that the most exported products are machines, iron, and motor parts.

What Documents Are Required to Export to the United Kingdom?

· First, you need to establish your company. The UK will require proof that your company is real and legal.
· You should create a unique e-export site for your company and develop an online store to showcase your products.
· You must prepare a customs declaration, which is a basic document to ensure that you do not experience problems in shipping and delivering your products. The customs declaration is needed to carry out customs procedures for the product’s entry into the country under foreign trade activities and to report these transactions to the country’s commercial unit. This document contains essential information such as origin, transport details, product value, product tariffs, taxes to be paid, sender-receiver company, etc. You must declare the customs declaration related to your export to the relevant customs authority.
· Depending on the type of transport for your product, you must stay in contact with the relevant office and authorities. Exported products are dispatched by land, air, or sea. In case of any problems or questions, contacting these institutions and finding quick solutions can save you from financial loss.
· You must prepare a commercial invoice and a certificate of origin.
· If the product you are selling is a food item, you must have a halal certification for certain products.
· You must obtain a trade license.
· In recent years, you must closely monitor the constant currency fluctuations that have emerged. To trade with minimum damage and maximum profit margins, it would be beneficial for you to know the market for your product in your target market and be careful when setting prices.

What Are the Export Taxes to the United Kingdom?

The customs duties that changed with Brexit are of great concern for companies exporting to the UK. According to the new UK VAT laws that came into effect on January 1, 2021, foreign sellers had to make new decisions for their businesses. Let's take a closer look at the procedures that Turkey, as a non-EU seller, needs to know for exports to the UK.

· If the sales value of the product you export is equal to or less than 135 GBP, you need to register for UK VAT. This VAT will be collected at the sales point within the country. Your company must obtain a VAT registration number and indicate this information on your shipping documents. If you have a VAT registration, your customers in the UK will pay VAT.
· However, if the value of the product you are selling is higher than 135 GBP, this VAT amount can be eliminated. If you have a UK VAT registration, your customers will not pay VAT. The collection of VAT and customs duties on orders can vary at your discretion.
· Another change due to Brexit is the abolition of the ATR application, which was removed on January 1, 2021, for products exported from Turkey to the UK. In addition, the GB low-value consignment exemption was also removed on the same date. As a result, a VAT of 20% has been decided to be applied to all products sent without a document.

What Products Are Exported to the United Kingdom?

Choosing the products that will most contribute to your profit margin, aligned with your company's objectives, will benefit your business. You should closely follow the products with the best market conditions in the UK, and deliver these products to your customers in the UK through effective marketing. According to TIM data based on 2020, the most exported products and their export values are as follows:
· Gold (other semi-processed) = $1,118,281,000
<· Diesel/semi-diesel motor vehicles (transport capacity >· Diesel/semi-diesel motor vehicles (transport capacity < 5 tons) = $757,640,000
· Television (colored, other) = $452,445,000
· Other vehicles powered by both petrol and electric motors; excluding those charged from external power sources = $366,992,000
· Other tobaccos not covered elsewhere in the tariff, materials used instead of tobacco = $356,010,000
<· Motor vehicle; spark-ignition (1000cm3 >· Motor vehicle; spark-ignition (1000cm3 < cylinder < 1500cm3) = $305,751,000
· T-shirt, undershirt, vest, knitwear, etc.; made of cotton (knitted or crocheted) = $224,801,000
<· Motor vehicle; diesel/semi-diesel (1500cm3 ><· Motor vehicle; diesel/semi-diesel (1500cm3 < cylinder volume = 2500cm3) = $218,048,000
· Motor vehicle; spark-ignition (cylinder volume >· Motor vehicle; diesel/semi-diesel (1500cm3 < cylinder volume = 2500cm3) = $218,048,000
· Motor vehicle; spark-ignition (cylinder volume <= 1000cm3) = $170,422,000
· Other products = $7,735,800,000

· Motor vehicle; spark-ignition (cylinder volume >

What Is the Trade Volume Between Turkey and the United Kingdom?

As mentioned above, many sectors have chosen the UK for exports, successfully capturing the market for these products in return. The trade volume between the two countries, which have strong commercial relations, was $15 billion as of November 2020, and according to DEIK Turkey-UK Business Council, this figure is expected to reach $20 billion by the end of 2023. The continuous annual increase in exports has benefited the commercial relationship between Turkey and the UK, as Brexit has also provided great advantages. The UK, which is free from EU regulations, offers opportunities for Turkish companies through flexible working conditions. The trade volume reached $16.3 billion in 2021, which serves as a beacon of hope for new business opportunities.