Cheaper stock abroad can be a false economy once VAT, duty and admin land.
Quick answer. Importing stock triggers import VAT (manageable via Postponed VAT Accounting) and possibly customs duty, which isn’t recoverable. Crucially, imported goods generally can’t be sold under the VAT Margin Scheme. Always work out the full landed cost before assuming an overseas deal is cheaper.
Sourcing cards and sealed product internationally can open up better prices and rarer stock — but importing brings tax and compliance obligations that change the true landed cost. Here’s what to weigh up.
Import VAT
When goods enter the UK, import VAT is generally due. The good news for VAT-registered businesses is Postponed VAT Accounting (PVA), which lets you account for import VAT on your VAT return rather than paying it upfront at the border — a real cash-flow benefit. You’ll need to reflect it correctly on your return, which is exactly the sort of thing to set up properly from the start.
Customs duty
Depending on the type of goods and their country of origin, customs duty may apply on top of VAT. Duty isn’t recoverable the way VAT is — it’s a genuine cost — so it needs building into your landed-cost calculation before you decide the deal is cheaper. The correct commodity code determines the rate.
The Margin Scheme catch
Here’s the important one for card sellers: imported stock generally cannot be sold under the VAT Margin Scheme. The scheme is designed for eligible second-hand goods bought within the UK/EU without VAT; imports typically fall outside it and are handled under normal VAT rules instead. That can materially change the VAT position on those items, so it needs deliberate treatment — don’t assume imported stock behaves like your UK-sourced singles.
The practical costs
- Landed cost: purchase price + shipping + duty + any import handling — that’s your real cost, not the sticker price.
- Currency: exchange rates and conversion costs affect the deal.
- Incoterms: agree who pays shipping, duty and insurance before you buy, so there are no surprises.
- Admin: customs declarations and paperwork take time or a broker’s fee.
None of this means don’t buy abroad — plenty of card businesses do, profitably. It means run the full landed cost and get the VAT treatment right first, so a “bargain” doesn’t quietly become a loss.
For more on this read our blog on ‘Calculating VAT under the Global Margin Scheme’ here
