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DDK Machine Movers Ltd are now an approved HMRC Customs Bonded Warehouse

Updated: Oct 25, 2023


Machine being prepared for export
Export machine


What is a Customs Bonded Warehouse?


A Customs Bonded Warehouse is a secure storage facility that allows businesses to store imported goods without immediately paying customs duties or taxes. This temporary suspension of duties and taxes provides companies with numerous advantages, especially when it comes to managing inventory and cash flow.


Why does this matter to me?


1. Cash Flow Optimization One of the most significant advantages of using a Customs Bonded Warehouse is the ability to defer customs duties and taxes until the goods are actually sold. For machine tool dealers and suppliers, this can translate into substantial cost savings and improved cash flow. With working capital freed up, businesses can allocate their resources more efficiently, invest in growth initiatives, and seize market opportunities as they arise.


Let's illustrate the cost savings that can be achieved by importing a £100,000 machine using the DDK Machine Movers Ltd Customs Bonded Warehouse.


In this example, we'll assume a hypothetical scenario where a machine tool supplier decides to import a high-value CNC machine into the UK from Japan. Scenario without a Customs Bonded Warehouse:

  1. Immediate Duty Payment: Without a Customs Bonded Warehouse, the supplier would be required to pay customs duties and taxes immediately upon the machine's arrival in the UK. These fees typically include import duty (varying based on the type of machine) and value-added tax (VAT) at the prevailing rate (e.g., 20%).

    • Import Duty (10%): £10,000

    • VAT (20%): £20,000

  2. Total Upfront Cost: The supplier would need to pay a total of £30,000 (import duty + VAT) upfront to clear the machine through customs.


Scenario with a Customs Bonded Warehouse:

  1. Deferred Duty Payment: By using a Customs Bonded Warehouse, the supplier can defer the payment of import duty and VAT until the machine is sold.

  2. Immediate Cost Savings: The supplier can avoid the immediate £30,000 payment, allowing them to allocate their capital elsewhere in the business.

  3. Potential Interest Savings: Additionally, by deferring the payment, the supplier avoids any interest or financing charges associated with borrowing the £30,000.

  4. Improved Cash Flow: With the £30,000 freed up, the supplier can invest in marketing, additional inventory, or other growth initiatives, potentially leading to increased sales and profitability.

It's important to note that the actual cost savings can vary based on factors like the type of machine, import duty rates, and VAT rates at the time of import.


However, the key takeaway is that utilizing a Customs Bonded Warehouse can provide machine tool dealers and suppliers with significant financial flexibility and cost savings when importing high-value equipment.

In this example, the supplier benefits not only from the immediate cost savings but also from the ability to strategically manage their cash flow and allocate resources to drive business growth, which is particularly valuable in a competitive industry like machine tool distribution.

2. Streamlined Supply Chain Operations Efficiency in the supply chain is crucial for machine tool dealers and suppliers. Customs Bonded Warehouses facilitate inventory management and minimize the lead times associated with customs clearance. This enables businesses to respond quickly to customer orders, reduce storage costs, and optimize their supply chain operations, all of which contribute to a competitive edge in the market.


Because we are specialist machine movers, you will benefit from extremely cost effective loading and delivery costs - as the items are already with us in storage! This means reduced transport times, reduced loading times, and ultimately - more cost effective and quicker delivery.


3. Enhanced Inventory Management

Machine tool dealers and suppliers often deal with a wide variety of products and components, each with its own lead times and demand patterns. Customs Bonded Warehouses provide the flexibility to stock a diverse range of items whilst offloading the inventory management to the Customs Bonded Warehouse. Due to the nature of Customs Warehouses everything has to meet a strict set of rules to be stored there, including unique references, Commodity Codes, and professional Warehouse Management Systems.

4. Cost Savings In addition to cash flow optimization, utilizing a Customs Bonded Warehouse can result in significant cost savings. By deferring customs duties and taxes, businesses avoid penalties and interest charges while also reducing the administrative burden associated with immediate duty payments. These savings can be reinvested in the business, used to enhance product offerings, or passed on to customers, making machine tool dealers and suppliers more competitive in pricing.

5. Strategic Expansion and Market Entry For machine tool dealers and suppliers looking to expand their international reach or enter new markets, Customs Bonded Warehouses can be a strategic asset. They allow businesses to establish a local presence and maintain stock close to target markets without the immediate financial burden of duty and tax payments. This proximity to customers can lead to faster deliveries, better customer service, and increased market penetration.

Conclusion In a dynamic and competitive industry like machine tool distribution, the advantages offered by Customs Bonded Warehouses in the UK are difficult to ignore.


From optimizing cash flow to improving inventory management and streamlining supply chain operations, the benefits are clear.


Machine tool dealers and suppliers can use Customs Bonded Warehouses as a powerful tool to gain a competitive edge, expand their market presence, and ultimately thrive in a globalized world. By leveraging these advantages, businesses can position themselves for sustained growth and success in the challenging landscape of international trade.


If you would like more information on Customs Warehousing feel free to give us a call and we'll talk you through how using our Customs bonded warehouse can help your company.






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