UK Import Duty Guide

What is import duty?


UK import duty (AKA customs duty) is a tax levied by the government on goods imported from abroad.

These duties are levied to protect domestic industries by making foreign goods more expensive. As a result, customers are encouraged to purchase locally produced items.


 

How does the UK charge import duty?

There is no standard rate for UK import tax. Factors like the type of goods, country of origin, and their intended use can affect the cost.

Customs duty valuation is key to determining the amount of import VAT and duty you’ll also need to pay. Below, you can find the import duty rate for the most common kinds of goods and their import duty charges:



















Types of Goods Import Duty
Any goods under £135 No Charge
Gifts worth £135-£630 2.5% (lower for some goods
gifts above £630 and any other goods above £135 Dependent on the type of goods and country of export. Check the HS code of goods for an exact rate

What goods are considered gifts?


HMRC considers items with the following qualities as ‘gifts'1:

  • Sent for an anniversary, birthday or other occasion

  • Items described as gifts on the customs declaration

  • Sent between two individuals, not companies

  • Items intended for personal use only

What is VAT?

VAT (value-added tax) is a separate form of consumption tax. It’s an indirect tax that is not paid by businesses but charged to consumers in the price of their goods.

 

Businesses must then report it to HMRC. Some goods and services, including financial services, postage stamps, and property transactions, are exempt from VAT.

 

However, it’s important to note that VAT exemptions differ from zero-rated items. While zero-rated goods are taxable at 0%, exempt items are outside the scope of VAT altogether.




















VAT Rate Applicable Goods/Services
Standard Rate (20%) Most goods and services (e.g., electronics, clothing) are charged at the standard rate of 20%.
Reduced Rate (5%) Specific items (e.g., children's car seats, home energy supplies) are charged at the reduced rate of 5%.
Zero Rate (0%) Essential goods (e.g., foods, newspapers) do not incur any VAT. They must still be reported on your VAT return.

What is excise duty?

Excise duty is another form of HMRC duty that you may have to pay alongside UK customs charges. It is a tax imposed on specific goods produced or imported into the UK (e.g., alcohol, tobacco, and energy products, like fuel for heating2).
The tax is calculated based on the quantity of the goods rather than their value. For instance, the duty on alcoholic beverages is determined by their volume and alcohol content.
If you fail to pay excise duty, they are liable to forfeiture. You may also be charged a penalty up to a maximum of £2,5003.

What are anti-dumping duties?

Anti-dumping duties are tariffs imposed on imported goods sold at prices below their normal value (typically lower than in the exporter's domestic market). The practice of ‘dumping’ can harm UK industries by undercutting local businesses.
So, to protect domestic producers, the UK government enforces anti-dumping duties on specific products from certain countries. You can find out more about anti-dumping measures at HMRC4.

How to pay import tax?

Shippers have lots of methods for paying the appropriate UK import duty to HMRC, including:

1. Immediate payment


For immediate clearance of goods, you can pay taxes and duties at the point of import. You can do this via online payments through your bank account, by debit or credit card, bank transfer or cheque.

2.Duty deferment account


A duty deferment account allows you to defer payment of customs duties, excise duties, and import VAT by consolidating them into a single monthly direct debit payment.

3. Postponed VAT Accounting (PVA)


PVA allows VAT-registered businesses to declare and recover import VAT on the same VAT Return. It means you can avoid paying VAT payments immediately at the time of import.

4. Cash accounts


For those using the Customs Declaration Service (CDS), a cash account can be established to manage payments for customs duty and import VAT.

5. General Guarantee Account (GGA)


A GGA5 is necessary when importing goods under specific conditions, such as:

  • Temporary admission: Importing goods temporarily with the intent to re-export.

  • Disputed duty values: When the exact duty amount is uncertain or under dispute.


6. Authorising representatives


If you employ customs agents or freight forwarders to handle import declarations, you can authorise them to use your deferment, cash, or guarantee accounts. You can set this up via the Customs Declaration Service6.

How to calculate import duty

Learning how to calculate import duty can be a complex process. You need to determine your goods’ commodity code, customs value, duty rate, import duty, VAT, and any additional duties (e.g., excise and anti-dumping).

We recommend visiting HMRC’s tax and duty page<a href=“#ref”><sup>7</sup></a> to find out more.

References

[1]https://www.gov.uk/goods-sent-from-abroad/gifts
[2]https://europa.eu/youreurope/business/taxation/excise-duties-eu/paying-excise-duties/index_en.htm
[3]https://www.gov.uk/guidance/civil-penalties-for-contraventions-of-customs-law-customs-notice-301
[4]https://www.gov.uk/guidance/prepare-to-work-out-the-customs-value-of-your-imported-goods
[5]https://www.gov.uk/guidance/apply-for-a-general-guarantee-account-and-pay-disputed-amounts
[6]https://www.gov.uk/guidance/set-up-or-view-an-authority-on-the-customs-declarations-service
[7]https://www.gov.uk/goods-sent-from-abroad/tax-and-duty