What is a bonded warehouse and does your business need one?

What is a bonded warehouse and does your business need one?


4 minute read | By Denholm Good Logistics

Last updated: May 16, 2024 | Published: November 15, 2017


Bonded Warehouses (sometimes referred to as Customs Warehouses) are warehouses tightly regulated by customs, where imported goods that are intended for export can be stored in the UK without actually entering the UK market. The practice typically referred to as bonded warehousing, means businesses don’t have to pay import duty and VAT, so while products are in the bonded warehouse, it’s effectively a duty-free zone.

Three reasons why you should consider bonded warehousing

1) Improved cash flow

Putting off the payment of duty until goods have been purchased can have a positive impact on cash flow. By storing your goods in a bonded warehouse, you’ll only pay the import-duty when they enter the UK market, so if you have any difficulty shifting your products, you won’t be out of pocket by paying the taxes up front when you’ve no guarantee of sales to recoup the costs. With bonded warehousing, all goods are classed as duty suspended, which avoids advance duty payment on products that may remain in stock for months.

2) No import duty if you’re exporting the goods

If you’re importing to export to non-EU countries, then using a bonded warehouse is a no-brainer. Keeping your goods in a bonded warehouse means you won’t have to pay any import-duty on products you export, saving both time and money. This means a business can avoid paying duty twice, providing typical savings of around 25-30%.

It’s also worth noting that if your goods need to be destroyed without being sold, you won’t have to pay the import duty on them.

3) Port Centric Logistics

Most bonded warehouses are located at or very close to ports (John Good, for example, has a bonded warehouse at the Port of Felixstowe), which means you can store your goods at the port of entry and distribute them as and when required. This reduces costs across the entire supply chain thanks to reduced lead times, reduced potential for damage, significant savings in transport costs and lower carbon emissions.

At John Good, we are authorised by HMRC to operate bonded warehouses which means our customers enjoy the benefits described above, as well as accelerated removal and release of cargo, efficient stock management and complete product traceability throughout the supply chain. Contact us to find out more

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