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Southeast Asia to Europe Route:
The most common route, where ships depart from major Chinese ports like Shanghai, Ningbo, or Shenzhen. They pass through the South China Sea, the Strait of Malacca, the Indian Ocean, and then through the Suez Canal. After crossing the Mediterranean Sea, they reach the Atlantic Ocean and finally arrive at UK ports such as Felixstowe or Southampton.
Cape of Good Hope Route:
Due to potential instability in the Middle East, an alternative route involves sailing around the Cape of Good Hope at the southern tip of Africa. Ships travel across the Indian Ocean, down around the Cape, and then northwards across the Atlantic Ocean to reach the UK. This route is longer and more expensive but avoids the risks associated with the Suez Canal region.
Arctic Route (Seasonal):
During summer months, when ice conditions allow, the Northern Sea Route through the Arctic Ocean offers a faster passage. This route is less commonly used and depends on favorable ice conditions.
Generally speaking, the common consensus in the market is that there isn't a service from China to the UK that can be defined as a "fast sea" service.
The reasons are as follows:
#1. No matter which route is taken, it's particularly far. If passing through the Suez Canal, the distance can be compressed to about 12,000 nautical miles, but compared to the 5,000 nautical miles and 11-day voyage across the Pacific from China to the U.S., it's still much longer.
#2. The difference in shipping capacity between shipping companies is not significant. Unlike the China-U.S. route, where Matson leads in fast shipping, there isn't a particularly fast shipping company on the China-UK route.
#3. There are too many port calls. Most ships passing through the Suez Canal first call at EU ports before heading to the UK. From the narrow Strait of Malacca to Central Asia, the number of coastal countries is overwhelming. With so many countries to call at, the time is extended.
So, under these circumstances, how can we quickly transport our goods to the UK? The answer is by rail and truck. We will elaborate on the Fast Train and Fast Truck options in this section.
Postponed VAT accounting is a system used by businesses to manage VAT (Value Added Tax) on imports. This system allows businesses to account for VAT on imports in their VAT returns rather than paying it upfront at the border.
Key Points of Postponed VAT Accounting:
Deferred Payment: Businesses do not need to pay VAT at the time of importation. Instead, the VAT is recorded and reported on their VAT return, which allows for more efficient cash flow management.
VAT Return Reporting: The VAT due on imports is declared in the same VAT return as the VAT on domestic sales, and the business can often reclaim the VAT as input tax if it is eligible, effectively neutralizing the cost.
Eligibility: This system is available to VAT-registered businesses and is typically applied to goods imported from outside the EU or, in some countries, from outside the VAT jurisdiction.
Administrative Ease: Postponed VAT accounting simplifies administrative processes and reduces the need for cash flow to cover VAT payments at the border.
Regulatory Compliance: Businesses must adhere to specific regulations and guidelines provided by tax authorities to ensure correct use of the postponed VAT accounting system.
This system is beneficial for improving cash flow and reducing the immediate financial burden associated with VAT on imports.
