New $800 US Customs threshold will boost cross-border business

New $800 US Customs threshold will boost cross-border business

UK-based parcel broker ParcelHero is predicting a “boom” for businesses shipping to the US, as a result of a change in US law which will raise the threshold at which duties and taxes are imposed on imports from from $200 to $800. The change, which will take effect tomorrow (10 March),  will also mean that goods below $800 won’t need to go through formal customs procedures, speeding up deliveries into the US.

“Many British products previously fell foul of the USA’s $200 limit (just £140) before duties and taxes were applied,” commented ParcelHero’s Head of Consumer Research, David Jinks.

“These duties usually had to be paid for by the receiver. It made British products less competitive than those purchased within the US, as most items valued over $200  had duties imposed on them, at a rate ranging from 0% to 37.5%, with the average duty rate being 5.63%.’

The new higher limit covers most goods sold by the majority of the UK’s smaller internet retailers such as marketplace traders, and many products sold by SME companies. It also reduces costs and paperwork for businesses, simplify the shipping of goods to the United States.

Jinks added: ‘The US is the top non-EU destination for exports for the UK’s SMEs, 35% of SME exporters ship regularly to the USA. The new threshold – around £560 at today’s exchange rate – on items before they must have duties and taxes imposed covers the majority of items for our online retailers and smaller manufacturers.’

However, Jinks warned that some US Government agencies, such as the Food and Drug Administration and the Bureau of Alcohol, Tobacco, Firearms and Explosives, may still require formal customs entries on all goods, regardless of value. Exports must also take care that the item’s value does not fall above the $800 threshold or the receiver will have to pay duties.

Click here for more information about shipping to the US.

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