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How to Calculate Import Duty and VAT
A quick note before you start:
Did you know that Import Duty and VAT is not payable on everything which comes into the UK? See our Basics page for a brief explanation or contact our Imports Team for guidance on your specific goods and circumstances.
If, however, your goods are liable for duty and/or VAT, then the following simple 4-step guide should help to explain how it is calculated.
1. Convert the value of your goods, into GB Pounds
This sounds easy enough, and it is, but you must ensure that the correct rate of exchange is used. Q) How do I know if I’m using the correct exchange rate? A) If it is the UK Custom rate, then it is. Each month UK Customs issue exchange rates which they will use to convert currencies into Sterling. Therefore these are the exchange rates that you must use.
See our Exchange Rates page to find the UK Customs Exchange Rates you need.
Calculate the Total value of your goods (Door to Door)
In some cases, this might simply be the amount you have paid for your goods, but this is not always as simple as that. The ‘Terms of Sale or ‘Inco-Terms’ between the seller / shipper and you, determines whether or not costs of shipping are added when they are declared to UK Customs.
If the shipping costs are included in your original price i.e. includes ‘Free Shipping’, then import duty and/or VAT (if applicable) will be paid on the price you have actually paid to your supplier for the goods.
So, how can you tell whether these charges will be added to your Customs declaration (Form C88)? Well, if you haven’t already done so, we would suggest that it may be worth your while reading our ‘Inco-Terms‘ page, to enable you to find out, and calculate import duty and VAT more accurately.
3. Calculating basic Import Duty (If applicable)
Now that you have got your total value of goods (including any associated shipping costs) in GB Pounds, you next need to know what percentage of Duty has been set by UK Customs for your particular goods.
To do this you need to visit either the UK’s .GOV online tariff, or the European TARIC website, via our ‘classification codes‘ page. Once there, search for your goods under description and enter the Country of Origin. This should then allow you to find the commodity code (keep this 10-digit code, as you will need to ensure that we use this code when we declare your goods to UK Customs) and the rate of Import Duty that applies to your goods. Then simply multiply your total value of goods by the Customs Duty rate. This is the approximate amount of Import Duty that you would have to pay. ukimports
4. Calculating the Import VAT (If applicable)
The Standard rate of VAT in the UK increased to 20.0% on the 4th January 2011 (up from the previous rate of 17.5%). So, to calculate the VAT, you need to do the following:
Add the amount of Duty, that you calculated (if any was applicable), on to the total value of your goods (incl. the shipping costs, if necessary), then you have to add all the UK charges, such as Customs clearance and delivery costs (from port of arrival/Bonded Warehouse through to your door). Then, simply multiply this total amount by the rate payable (20.0% for Standard, 5.0% for Reduced rate or 0.0% for Zero-rated goods), to give an approximate amount of VAT that you would have to pay. ukimports
If you are unsure about how much to add for UK charges, then UK Customs has produced a guideline, in the form of JCCC Paper (05) 64 (click here to view)
Please remember that the Customs exchange rates change each month, therefore, the amount that you have just calculated, may change.
If your commodity code has additional duty codes / rates, please see our Taric Help page, for more information. ukimports
Email a member of our Imports Team to see whether your goods are eligible and to find out what UK Customs Forms need to be completed in order for Customs to clear your goods.ukimports
Phone us on 0345 309 6360, or email us at: email@example.com.
- Basic Import Advice
- Broker Agent Information
- UK Commodity Classification Codes
- Customs Declaration Service (CDS)
- Customs Exchange Rates
- Customs Freight Simplified Procedures
- Frequently Asked Questions
- How to Calculate UK Import Duty
- Customs Procedure Codes
- Import Duty VAT Calculator
- Inward Processing Relief
- Outward Processing Relief
- Return Goods Relief
Contact us to see if we can help you.
Why not see if we can help with paying the excise duty to UK Customs
UK Import Services Limited
Global Shipping and UK Customs Broker
PO Box 832
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