By
August 8, 2026
Import Duty UK: A Complete Guide to Customs Charges and Import VAT
Importing goods into the UK can involve several taxes, customs procedures and additional charges. Whether you are importing products for a business, buying goods from an overseas supplier or purchasing items internationally, understanding UK import duty can help you calculate the true cost before your goods arrive.
Import charges can include customs duty, import VAT, excise duty and courier or customs clearance fees. The amount you pay depends on factors such as the type of goods, their value, their country of origin and how they enter the UK.
This guide explains how import duty works in the UK, when customs duty may be payable, how import VAT is calculated and what businesses should consider before importing goods.
Import duty is a tax that may be charged when goods are imported into the UK from another country.
The term "import duty" is commonly used to describe customs charges generally, although different taxes can apply when goods cross the UK border.
Depending on the shipment, charges can include:
Not every imported product is subject to the same charges.
The amount payable depends heavily on the commodity classification, customs value and origin of the goods.
Customs Duty may become payable when goods are imported into Great Britain from overseas.
Different arrangements can apply to Northern Ireland because of its particular customs framework.
Whether duty is charged will depend on factors including:
Businesses should therefore calculate potential customs costs before ordering goods from an overseas supplier.
One of the most important parts of calculating UK import duty is finding the correct commodity code.
Commodity codes classify products for customs purposes.
The code helps determine:
Products that appear similar can sometimes have different commodity codes and therefore different duty rates.
For example, different types of clothing, electronics, machinery and food products may have different classifications.
UK importers should use the official UK Trade Tariff to identify the appropriate commodity code.
There is no single UK import duty rate.
The Customs Duty rate varies according to the product and, in some circumstances, its origin.
Some goods have a 0% customs duty rate, while others are subject to a percentage of their customs value.
The applicable rate can be determined using the UK Trade Tariff.
For example, if a product had a customs value of £10,000 and an applicable Customs Duty rate of 5%, the basic calculation would be:
£10,000 × 5% = £500 Customs Duty
However, actual customs valuation can be more complicated because certain transport, insurance and other costs may need to be included.
Always use the applicable customs valuation rules rather than relying only on the supplier's invoice price.
The customs value is the amount used to calculate certain import charges.
It is not necessarily just the price you paid for the products.
Depending on the circumstances and applicable valuation method, the customs value can include costs such as:
Correct customs valuation is particularly important for businesses importing commercial shipments.
Incorrectly declaring a lower value to reduce customs charges can result in penalties and other consequences.
Import VAT is VAT charged when goods are imported into the UK.
It is separate from Customs Duty.
Even when a product has a 0% Customs Duty rate, import VAT may still be payable.
For many goods, the standard UK VAT rate applies, although reduced or zero rates may apply to certain products.
The value used for import VAT can include more than the original purchase price.
Import VAT is generally calculated using a value that can include:
This means VAT can effectively be calculated on a higher amount than the supplier's original invoice.
Suppose a UK business imports goods with an illustrative customs value of £10,000.
Assume the applicable Customs Duty rate is 5%.
Customs Duty:
£10,000 × 5% = £500
For a simplified illustration, if import VAT at 20% were then calculated on £10,500:
£10,500 × 20% = £2,100
The total illustrated taxes would therefore be:
Customs Duty: £500
Import VAT: £2,100
Total: £2,600
Additional transport, customs clearance and handling fees could also apply.
This is only a simplified example. Actual calculations depend on the shipment, valuation rules, product classification and other relevant costs.
Following Brexit, goods entering Great Britain from EU countries are generally treated as imports for customs purposes.
However, this does not mean Customs Duty is automatically payable on every EU shipment.
Under the UK-EU Trade and Cooperation Agreement, qualifying goods can potentially benefit from preferential tariff treatment where the applicable rules of origin are satisfied.
A product being shipped from an EU country does not necessarily mean it has EU origin.
For example, a product manufactured in a non-EU country and subsequently stored and sold by an EU distributor may not automatically qualify for preferential treatment.
Businesses importing from the EU should therefore understand the distinction between:
Country of dispatch – where the shipment was sent from.
Country of origin – where the goods originate according to the applicable customs rules.
This distinction can significantly affect the duty payable.
Rules of origin determine the economic nationality of a product for customs purposes.
They are particularly important when claiming reduced or zero tariffs under a trade agreement.
The rules can consider factors such as:
Importers should not assume that goods qualify for preferential duty simply because they are purchased from a country with which the UK has a trade agreement.
The goods must meet the applicable origin requirements.
The UK has trade agreements with various countries and territories.
Depending on the agreement, qualifying products may benefit from reduced or zero Customs Duty.
However, preferential rates are normally subject to specific requirements.
These can include:
Before claiming a preferential tariff, importers should ensure that they have appropriate evidence that the goods qualify.
China is a major source of products for UK businesses, particularly ecommerce companies, wholesalers and manufacturers.
Goods imported from China may be subject to:
The exact Customs Duty rate depends on the commodity code.
Businesses importing from China should calculate the landed cost rather than looking only at the supplier's product price.
Landed cost represents the total cost of getting a product from the supplier to its destination.
A simplified landed-cost calculation may include:
Product cost + international shipping + insurance + Customs Duty + import VAT where it represents a real cost + customs fees + domestic delivery + other applicable charges
Understanding landed cost is particularly important for ecommerce and retail businesses.
A product that appears inexpensive when purchased from an overseas supplier can become considerably more expensive after freight, taxes and customs charges are added.
UK ecommerce businesses frequently source products internationally.
If your company imports inventory from countries such as China, the United States, India or other overseas markets, customs costs should be included when calculating your margins.
Consider:
Ignoring import costs can result in significantly overestimating the profitability of a product.
Businesses involved in importing or exporting goods will often need an Economic Operators Registration and Identification number, commonly known as an EORI number.
An EORI number is used by customs authorities to identify businesses involved in customs activities.
UK businesses importing goods should determine whether they require an EORI number before arranging their first commercial shipment.
The type of EORI number required can depend on where the business operates and where goods are being moved.
Businesses can apply for an EORI number through the UK government.
Information commonly required can include details relating to:
Businesses planning their first import should arrange any necessary customs registrations before the shipment reaches the border.
Responsibility for customs charges depends partly on the terms agreed between the buyer and seller.
International shipments frequently use Incoterms, which establish certain responsibilities between buyers and sellers.
Common Incoterms include:
For example, under a DDP arrangement, the seller generally takes responsibility for delivering goods with import duties and relevant import formalities handled according to the agreed terms.
Under other arrangements, the buyer may be responsible for customs clearance and import charges.
Businesses should understand the agreed Incoterm before placing an international order.
VAT-registered UK businesses may be able to use Postponed VAT Accounting (PVA) for eligible imports.
Instead of physically paying import VAT at the border and subsequently reclaiming it, eligible businesses can account for import VAT through their VAT return.
This can provide an important cash-flow advantage.
Without PVA, a business could potentially have significant amounts of cash tied up in import VAT while waiting to reclaim it.
Businesses should ensure that customs declarations and VAT records are handled correctly when using PVA.
A VAT-registered business may be able to recover eligible import VAT, subject to the normal VAT rules and appropriate evidence.
The business generally needs to be the importer and meet the relevant conditions.
Non-VAT-registered businesses generally cannot recover VAT in the same way, meaning import VAT can become a direct cost to the business.
This can significantly affect product margins.
Different VAT and customs rules can apply depending on the value and circumstances of a consignment.
For goods sold directly to UK consumers, particularly lower-value consignments, the overseas seller or online marketplace may have VAT collection responsibilities.
For higher-value consignments, VAT and customs charges may instead be collected through the import process.
Businesses selling goods to UK consumers from overseas should therefore understand both customs rules and UK VAT rules for ecommerce.
Special customs rules and relief thresholds can apply to genuine gifts sent between private individuals.
However, marking a commercial purchase as a "gift" does not legitimately turn it into one.
Incorrect customs declarations can lead to goods being delayed, seized or additional charges being imposed.
Certain products can be subject to Excise Duty in addition to Customs Duty and VAT.
Examples can include:
Excise goods can be subject to additional registration, movement and reporting requirements.
Businesses importing these products should obtain specialist guidance before arranging shipments.
Import taxes are not the only costs you may encounter.
Couriers, freight forwarders and customs brokers can charge fees for handling the customs clearance process.
These may include:
Always ask your freight provider which fees are included in its quote.
Before purchasing goods internationally, businesses should estimate the complete landed cost.
Determine the correct UK commodity classification for your product.
Use the UK Trade Tariff to identify the applicable tariff.
Establish the customs origin of the goods and whether a preferential tariff may apply.
Determine the correct customs value under the applicable valuation rules.
Apply the relevant tariff rate to the appropriate customs value.
Determine the import VAT treatment and appropriate VAT calculation.
Include freight, insurance, customs brokerage, warehousing and domestic delivery.
You can then estimate your actual landed cost.
Importers should avoid several common mistakes.
Using the wrong commodity code
An incorrect classification can result in paying the wrong amount of duty.
Confusing shipping country with origin
Goods shipped from one country may originate in another.
Ignoring freight costs
International transport can affect the total landed cost and potentially customs valuation.
Assuming every EU import is duty-free
Preferential tariffs depend on applicable rules, including origin requirements.
Failing to arrange an EORI number
Missing customs registrations can delay shipments.
Ignoring import VAT
Even when Customs Duty is zero, import VAT can still be relevant.
Underestimating customs clearance fees
Courier and broker charges can increase the final cost of an import.
Businesses should never deliberately undervalue or misclassify goods to reduce customs charges.
However, there are legitimate ways to manage import costs.
These can include:
Companies importing significant volumes may benefit from professional customs advice.
The amount depends on the product's commodity code, customs value, country of origin and any applicable trade agreement. There is no universal import duty percentage.
No. Customs Duty and import VAT are separate charges. A product may have no Customs Duty but still be subject to import VAT.
UK companies may need to pay Customs Duty when importing goods, depending on the goods, value, origin and customs arrangements.
Customs formalities generally apply to goods entering Great Britain from the EU. However, qualifying originating goods may benefit from preferential tariffs under the UK-EU trade arrangements.
Businesses involved in customs activities will commonly require an appropriate EORI number. Requirements depend on the business and movement of goods.
VAT-registered businesses may be able to recover eligible import VAT subject to the normal VAT rules and required documentation.
Goods can be held by the courier or customs authorities until applicable charges and formalities are dealt with. Additional costs, such as storage or handling fees, may also arise.
Understanding import duty in the UK is essential for businesses buying products from overseas.
The supplier's invoice price is only one part of the true cost of importing goods. Customs Duty, import VAT, freight, insurance, customs clearance and domestic delivery can all affect the final landed cost.
Before importing, identify the correct commodity code, check the applicable UK tariff, establish the origin of the goods and determine whether any preferential tariff or customs relief is available.
For UK businesses importing regularly, good customs planning can improve cash flow, reduce unexpected charges and provide a much clearer understanding of actual product profitability.
Because customs rates, trade agreements and import procedures can change, always verify current requirements using official UK government guidance before making significant importing decisions.
This article is for general information only and does not constitute tax, customs, legal or financial advice.
