Duties & Taxes to UK Customs

Duties & Taxes to UK Customs

Duties & Taxes to UK Customs When buying goods from outside the EU, you have to pay duties and taxes to UK Customs in order to have your goods released into the country. The vast majority of shipments are subject to UK Duty and VAT and these are the two main costs that you should understand before importing from overseas.  

UK Duty

The amount of UK Duty that you are required to pay is dependent on the declared value of the goods and the type of product that you’re importing.  Each product is given a different duty rating/percentage.  To find out the percentage you’ll have to pay on your product, you can either ask us and we’ll try to find the most appropriate heading for your goods or you can use the online tariff at www.gov.uk/trade-tariff

VAT on an import

When a shipping quote says “plus UK Duty & VAT”, don’t think that the VAT is on the shipping price; it’s actually VAT on the taxable import.  If you buy goods from outside the EU, you won’t pay VAT to the supplier, but that doesn’t mean you won’t have to pay it at all.  The taxable import on which VAT is payable is the amount that you pay for your goods, plus the shipping cost, plus the UK Duty.  You are effectively paying VAT on everything that it costs for you to buy the goods and get them into circulation in the UK.

Duty and VAT Estimator

We’ve simplified the calculations so it’s easy for you to estimate the UK Duty & VAT you’ll have to pay and give you an example to work with.  In reality, HMRC use a figure called a “VAT Value Adjust” and don’t work from the full shipping quote (which also affects the UK Duty) but for a good estimate you can follow this example or use our calculator:

If you pay your supplier USD$3000 (let’s call it £2000) for your goods, the UK Duty rating for these particular goods is 3.5% and the shipping quote is £300 then:

UK Duty = 3.5 % of £2000 = £70.00

VAT = 20 % of (UK Duty [£70] + Shipping [£300] + Cost of the goods [£2000]) = £474.00

Therefore the total duties and taxes payable to import these goods would be £544.00 (£70 for UK Duty and £474 for VAT) in addition to the £300 shipping cost.