Everything you need to know about using a bonded warehouse

Posted by Faye Lester


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In this guide, we’re looking at what a bonded warehouse is and how it can help improve cash flow in your international supply chain. While in a “bonded state” your goods remain in a customs-suspended state. This means you don’t need to pay import duties or taxes until you’re ready to release your goods into free circulation or export. This is an advantage that global businesses that distribute goods can tap into. Find out more in our guide.

What is a bonded warehouse?

Bonded warehouses provide specialised storage services and are an integral part of the global supply chain.

A bonded warehouse, also known as a customs bonded warehouse is a secure facility authorised by HMRC where imported goods can be stored without immediate payment of customs duties, offering businesses flexibility and cost savings in international trade.

How do bonded warehouses work?

Bonded facilities need to be certified and HMRC-compliant. They will be subject to random audits by inspectors.

Below, we’ve listed the step-by-step process of using a bonded warehouse:

  1. Your chosen certified facility receives your inbound goods that need to be held in ‘bond’.
  2. Once approved with customs documentation, deliveries can be booked in.
  3. Your goods will be inspected and cross-checked against documentation before being booked onto a secure system.
  4. Your goods will be securely stored at a HMRC-approved bonded warehouse.
  5. You don’t need to pay import duties or taxes until you’re ready to release your goods into free circulation or export.
  6. Ready to move your goods? Let your warehouse facility know.
  7. Documentation needs to be through customer clearance. This can be done via an online system.
  8. Once goods are released, you can arrange for them to be collected, or the team at the warehouse can help you with your fulfilment needs.

What are the benefits?

Bonded warehousing provides businesses with the flexibility to store goods before duty payments are due, improve cash flow and preserve product quality, among other benefits, making it an advantageous option for companies engaged in international trade.

How does bonded warehousing improve cash flow?

It can improve cash flow for businesses importing goods from outside the UK. Bonded warehousing provides a duty-free zone for your goods. This means you won’t be liable for customs duty and VAT until you request that your stock be released into free circulation.

By using a customs bonded warehouse, a business can defer customs duties and taxes on goods until they are released from the warehouse, providing much-needed breathing space for marketing products or carrying out additional pre-sale activities.

This ability to defer payments can provide a welcome boost to cash flow. Here’s how:

  • If the goods are exported, duty may not have to be paid at all, resulting in an estimated tax saving of around 25-30%.
  • Additionally, bonded warehousing allows businesses to store goods closer to their final destination, reducing lead times and transport costs.
  • By leveraging bonded warehouses, businesses can order goods in advance of anticipated demand, preserve the quality of their products, and quickly deliver them, offering a better overall customer experience. This can boost revenue as customers and clients may be more likely to choose your business again due to receiving a consistently reliable and prompt delivery service. Word of mouth can also go a long way toward securing new customers.

Why choose Big Web Warehouse as your customs bonded warehouse partner?

As part of the Big Web Warehouse bonded warehouse service, you’ll have round-the-clock access to our state-of-the-art purpose built portal which will allow your goods to be accurately and securely managed. When you partner with Big Web, we can manage your “bonded” and “free circulation” goods simultaneously without compromising on any compliance requirements.

We make bonded warehousing a simple and easy process, you’ll never have to second-guess where your goods are.

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