Bonded warehousing is a strategic choice for businesses or individuals who are looking for a cost-effective solution to store their goods closer to their customers and thus be able to respond to global demands more flexibly, without immediately incurring customs duty and taxes. In this article we will explore everything you need to know about customs bonded warehouses in the UK.
A bonded warehouse, commonly referred to as a customs warehouse or duty-free zone, is a warehouse where imported or exported goods are stored. It is managed by a private company in a foreign country under the supervision of the local customs agency. The advantage of having a bonded warehouse is that imported goods can be stored or manipulated without being subject to import duties and taxes until they are sold and go into free circulation, also meaning that deliveries to clients are much faster.
Moreover, bonded warehouses are also useful when goods reach the UK and:
If you want to apply to operate a bonded warehouse to store your goods when importing to the UK, you must be licensed as a warehouse keeper by HM Revenue & Customs (HMRC), or store goods as a depositor. To be approved as a warehouse keeper you need:
Important: In the UK, customs warehousing allows only for certain types of processing, known as usual forms of handling, such as preserving goods, improving their presentation or marketable quality, and preparing merchandise for distribution or resale. If you require more extensive processing, goods must be declared to inward processing.
This warehouse is operated by a business who will store goods on your behalf. This makes them the warehouse keeper and you the depositor.
You operate your own warehouse to store your goods, making you both the warehouse keeper and the depositor.
Bonded warehousing costs vary between providers and, more in general, there are different costs associated with UK customs charges and import.
Customs duty is charged on imports from outside of the EU, with tariffs set in accordance with the commodity type and bond.
The standard VAT rate for most goods is 20% and is charged on imports from foreign customs, namely the EU and the rest of the world.
Warehousing costs differ based on the type of goods, location and the amount of space required.
Bonded warehousing allows importers and businesses to have greater flexibility in inventory control and stock management, thus accommodating global market demand more easily. Here are some of the main advantages connected to this solution:
Using a bonded warehouse means deferring UK customs duty and taxes until goods are sold or leave the warehouse. Since no initial payment is required, businesses can free up valuable cash flow that would otherwise be tied to duty payments and thus have better control over it.
If goods need to be exported again after they reach the UK, keeping them in a bonded warehouse means that duties have to be paid only in the country of destination, precisely because these goods won’t enter free circulation in the UK. This enables businesses to leverage international trade opportunities and respond to global market demands more flexibly.
Meeting customer demand is the number one requirement of a successful ecommerce business. It requires a combination of strategic warehouse management and integrating automation to deliver orders timely and efficiently.
In the context of bonded warehousing, these advancements become even more significant. In fact, thanks to this specialised warehousing solution that allows storage without time constraints, businesses can strategically import merchandise in advance of peak seasons and withdraw for consumption only when needed. Ultimately, this flexibility enables optimization of supply chain management and retailers are therefore able respond to market demand or specific sales patterns more quickly, avoiding logistical challenges, as well as costs associated with transport to different storage locations.
Some bonded warehouses offer valuable support for importers, especially regarding customs tax documentation, tariff classifications, certificates of origin and international trade regulations. By facilitating interaction with customs authorities, bonded warehousing can become a real asset for your business, especially since customs requirements can be complex and handling goods in accordance with these is fundamental to avoid delays, penalties, or additional charges for customers.
Using a bonded warehouse means you have more flexibility in accommodating fluctuations in demand without paying duty if goods remain unsold. Moreover, as mentioned before, this solution is also useful to avoid paying double duty if you plan to export your goods again after they enter the UK.
Whether you are a growing business looking to expand your market reach or desire to optimise customs costs in the UK, bonded warehousing can be a strategic solution to navigate the complexities of international trade while offering your customers the flexibility and responsiveness they expect.
A bonded warehouse is a warehouse managed under the supervision of the local customs agency, where imported or exported goods can be stored, re-exported, or manipulated without being subject to import duties and taxes until they go into free circulation.
To be approved as a warehouse keeper you need to be based in the UK, have an EORI number, be compliant, prove you have a business need for the warehouse, and be financially solvent
In the UK, only dutiable goods can be stored in a bonded warehouse but both duty and VAT are deferred while in the warehouse. Goods on which VAT only is payable are not allowed to be placed in this type of facility.
If you import goods that are considered a health hazard or require to be stored in a specific way you will need facilities that are specially equipped. This can apply to: