Import duty and taxes 

UK Duty

How much import duty you will pay will depend upon the value and type of goods being imported as every product has a different duty percentage rate. In order to calculate the percentage of duty payable you can ask your UK freight agent or work it out yourself using the online tariff from the  UK government website . Much will depend on how the goods are classified and described so you will need a detailed description of the product and must take the time to allocate them to the correct tariff heading. Failure to get this right can result in costly fines and penalties. These tariff codes are often referred to as HS Codes.

How do HS Codes work?

Whenever any goods are imported to the UK, a customs harmonized tariff system code (HS code) needs to be used so that you can work out how much the percentage of duty will be. As the importer, you are legally bound to ensure that this is noted correctly. You will need a detailed description of the products to work out which category of tariff your goods fall into. With this in hand, you can calculate the correct UK duty and VAT.


As well as UK duty, you will have to pay VAT. Many people make the mistake of thinking that the VAT will be calculated only on the cost of the goods but this is wrong; VAT is calculated based upon the TOTAL cost of shipping the goods to the UK and is usually made up of the cost of the goods from the supplier together with cost of shipping and duty. You are paying VAT on the total cost accrued when bringing the goods to the UK.

Calculating UK Duty and VAT

Here is a simple example to show you how to work out the costs of both UK duty and VAT:

Goods purchased from outside of EU (converted from USD to UK£) £5000.00
UK Duty at 3.5% £ 175.00
Cost of shipping to UK £ 500.00
SUB TOTAL £5675.00
VAT @ 20% on sub-total £1135.00

So in this example, the total of UK duty and VAT (tax) payable to import these goods to the UK is £175 + £1135 which is £1310. The real figure you pay may sightly different because the there is a VAT adjustment in the custom entry.

Paying your UK Duty and VAT tax

When you import your goods into the UK, the company that deal with your freight clearance will usually contact you to advise how much you need to pay. Most will send you an invoice and all you have to do is pay it so it is not at all complicated; all you need to do is nominate a freight agent in advance of the shipment arriving and then UK Customs will automatically contact them upon arrival. Your supplier overseas can also email you copies of the shipping invoices so that you can send ahead to your freight agent and pre-alert them of the imminent arrival.

If you are registered for VAT, you will have to pay the VAT but can claim it back when you do your VAT return using Certificate C79 which you should receive each month from HMRC.

Are your goods for re-sale or are they samples?

This makes a difference as if the goods are purely for sample purposes only and not to be sold on, duty and VAT relief may be given. They also have to be of negligible value and to be used for the purpose of obtaining orders for that same product. Products with a total commercial value (cost of goods, shipping cost, duty and insurance) above £15 normally are subject to VAT. If the total is above £135 then UK duty will likely have to be paid too.

If you are unsure as to where you stand, check this out with your UK freight agent or research on the HMRC website. Most of the time, if duty is not payable then VAT will be removed too.

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