The global nature of the clothing industry means that businesses in this sector must be able to navigate complex international supply chains and regulations. Customs duty is typically high for the clothing industry, meaning profit margins are squeezed especially hard when shipping in/out of multiple jurisdictions. Businesses tend not to take advantage of several industry-pertinent customs planning techniques that can significantly reduce the cost of sales.
The UK clothing sector is highly dependent on imports, with over 60% of clothing sold in the UK coming from abroad. This reliance on imported goods means that businesses in the clothing sector are particularly vulnerable to changes in customs duty rates.
How Barbourne Brook can help you:
Helping spot overpaid duty in the supply chain and then working with you to reclaim it going back up to three years
Implement best practice with respect to customs duty compliance
Correct use of Free Trade Agreements
We can help businesses in the clothing sector save on customs duties, reclaim overpaid duty, and implement best practices with respect to customs compliance.
We have a team of experts who are familiar with the requirements of the clothing sector and can provide tailored advice. We can help you to save money on customs duty and avoid penalties for non-compliance.
A common issue within the clothing sector is around the correct usage of free trade agreements. Typically, preference isn’t being claimed correctly, leading to over or under-payments of duty. We can work with you to ensure you are paying the best rates of duty and give practical advise on reducing your cost of sales within the supply chain.
Customs Protect Services for Clothing
The clothing sector is one of the most heavily regulated industries in the world. Our flexible monthly Customs Support service support can be tailored to suit your needs ensuring that businesses in this sector can operate smoothly and efficiently. The service includes ad-hoc queries, technical updates, monthly data and analytics reporting and a wealth of resources at your fingertips. By engaging with Customs Support you can future-proof your business against changes in customs regulations and ensure you are paying the lowest possible rates of duty.
Barbourne Brook can help businesses in the clothing sector with a range of services, including:
Customs compliance: We can help businesses in the clothing sector comply with a range of customs regulations, including the strict rules of origin. We have a deep understanding of the rules governing the clothing sector, and our team can help businesses ensure that they are compliant and efficient.
Audit your use of Free Trade Agreements : Small errors in the declaration process are common and can mean you are not paying the correct duty. Often, the preference for FTA’s is not claimed resulting in hidden supply chain cost that does not get picked up during the usual checks. Our analytical software can identify these errors and we can work with you to reclaim the overpaid duty going back 2 years.
Customs Valuation: We see a common trend within the clothing industry around customs valuations not including things like intellectual property, royalties and volume rebates. Our team can ensure you are paying the correct duty and that all relevant deductions are made in line with HMRC guidelines. This can significantly reduce your cost of sales and push up margins.
Customs Landscape for Clothing
As the world of business becomes increasingly globalised, companies in the clothing sector must be ever more vigilant when it comes to managing their customs landscape. Most clothing is at a rate of 12%, so duty can be a considerable cost if strict rules of origin are not satisfied. If businesses import clothing at 12% and subsequently export at 12%, they effectively have a 24% uplift in the cost of sales. This issue is further compounded by strict compliance obligations and heavy regulation around commercial documentation.
Barbourne Brook can help businesses in this sector stay ahead of the curve by providing a deep dive into your Customs Landscape and identifying the risk and opportunities lying within the current structure. We can then work with you to build a coherent strategy and implement planning techniques to mitigate risk and realise opportunities.
Barbourne Brook have streamlined this process to ensure minimal disruption to your business operations whilst maximising the return on investment. The savings and reclaims uncovered by our experts almost always exceeds our fees for the project.
Our team of experienced consultants has a deep understanding of the challenges faced by businesses in the clothing sector when it comes to managing their customs landscape. We work with some of the biggest brands and major PLC’s in this industry and know the common beartraps to avoid and unexploited advantages on offer.
Our team of experienced consultants has a deep understanding of the challenges faced by businesses in the clothing sector when it comes to managing their customs landscape. We can provide tailored advice and support that will help your company navigate the ever-changing landscape of customs regulations.
CAT360 for Clothing
As the global fashion industry continues to grow, so too does the need for efficient and effective customs management. Most clothing companies will import from GSPs (Generalised System of Preferences) countries or under FTAs (Free Trade Agreements). In order to benefit from tariff-free trade, the customs declaration needs to claim preference.
The reality here is that customs brokers often miss this claim and therefore, duty is paid incorrectly. Our CAT360 app will pick up these overpayments and assist the business in reclaiming the overpaid duty from HMRC.
Barbourne Brook’s CAT360 software is designed for businesses in the clothing sector that need to streamline their customs processes.
CAT360 has been successfully implemented within the clothing industry and has identified millions of pounds worth of duty reclaim potential for our clients. Additionally, the tool has helped businesses take a proactive approach to customs compliance obligations by spotting risk areas before an HMRC audit.
Customs Warehousing for Clothing
Customs Warehouses are an important part of international trade and can be especially valuable in the clothing industry where customs duty is high. As goods are imported in various styles and sizes, stock turnover can be high with import VAT and Duty payable on the import. This results in both a cashflow issue and increased cost of sales on stock that may take months to sell.
A Customs warehouse with give you the following benefits:
- Negate customs duty payments on goods you import that are subsequently When you consider a 12% industry average, this can have have a big impact on the cost of sales.
- Significantly reduce your declaration costs. This can usually go from industry standards of £45 per declaration through a broker down to £15. It is not unusual for these savings to be in six figures per annum.
- Better control over your customs declaration process meaning reduced risk within the business and better reporting.
Why Implementing a Customs Warehouse is so Challenging
A customs warehouse authorisation is HMRC-approved, and as such, a business must demonstrate certain systems, processes, and procedures are at a good standard before signing off. This can cause businesses the headache of having to build or enhance these from scratch without clarity on the full requirements. We strongly advise any business who are not experienced in implementing a customs warehouse to seek advice before starting the process. There are certain options and elections that, if not correctly optimised, can detrimentally affect your return on investment.
We offer bespoke solutions to individual cases depending on how much involvement you need. This can range from a full turnkey solution with project management right through to a purely supportive role. The first place to start is by speaking with our team and working out where you are now and highlighting the development areas. Once we know what work needs to be done, its an easy to see how much help you will need.
Customs Warehousing is seen as an industry norm within the clothing sector. However, those brands that see high growth quickly, particularly within the direct-to-consumer market, are now looking for solutions to increased costs of sales, and a bonded warehouse is one of these. Many of the UK’s popular brands have recently gone through the process with great success.
Barbourne Brook is a leading provider of customs warehouse services and can help businesses in the sector get the most out of their customs warehouse operations.
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How can we help?
We are on-hand to help with all of your customs need. Provide us with some details on your circumstances and one of our friendly experts will be in touch to provide support and advice.