- Calculating UK import duty takes four steps: commodity code → customs value → duty → import VAT.
- Customs duty = customs value × duty rate. The customs value is broadly the goods price plus transport and insurance to the UK border.
- Import VAT = 20% × (customs value + duty + shipping), VAT is charged on the duty too, so duty compounds.
- Skip the duty if it comes to £9 or less; consignments £135 or under are generally duty-free (VAT still applies).
- Our free landed cost calculator does all four steps for you with cited sources.
The four-step method
Whatever you are importing, the UK import duty and VAT calculation always follows the same four steps:
- Find the commodity code for the product, this gives you the duty rate.
- Work out the customs value of the goods.
- Apply the duty rate to the customs value to get the customs duty.
- Add import VAT (normally 20%) on the value plus duty plus shipping.
The total you pay is customs duty + import VAT. Get the commodity code and value right and the rest is arithmetic. Let's take each step in turn.
Step 1: Find the commodity code (and its duty rate)
The duty rate is set by the product's commodity code. Look it up in HMRC's free UK Trade Tariff at gov.uk/trade-tariff: search by what the product is, drill down through the hierarchy, and confirm the 10-digit import commodity code. Against that code the tariff shows the duty rate (for example 0%, 4% or 12%).
If you are new to classification, read our Harmonised System / commodity code guide first, choosing the right code is the single most important input, because an error here makes every later number wrong. Classification is legally your responsibility, so for difficult items consider an HMRC Advance Tariff Ruling.
Step 2: Work out the customs value
UK import duty is charged on the customs value, usually calculated using the transaction value method. Broadly, that is:
- The price paid for the goods, plus
- Transport and insurance to the UK border, plus
- Certain other costs (some commissions, royalties) where they apply.
Costs incurred after the goods reach the UK (such as onward UK delivery) are generally excluded for duty purposes. HMRC's full guidance is at working out the customs value of your imported goods.
Step 3: Apply the duty rate
Now multiply:
Customs duty = customs value × duty rate
If the country of origin has a UK trade agreement and your goods meet the rules of origin (with valid proof of origin), use the lower preferential rate instead of the standard UK Global Tariff rate, often 0%. Without proof of origin, use the standard rate. See our import duty UK guide for how preferential rates and rules of origin work.
Step 4: Add import VAT
Import VAT (normally 20%) is charged on the value of the goods plus the duty plus shipping:
Import VAT = 20% × (customs value + customs duty + shipping)
This is why duty has a compounding effect, you pay VAT on the duty as well as on the goods. Most products are standard-rated at 20%; some are zero-rated or reduced. The total import charge is then customs duty + import VAT.
If you are VAT-registered, you would normally use Postponed VAT Accounting so the import VAT goes on your VAT return rather than being paid in cash at the border.
Full worked example
You import £2,000 of goods from a supplier, with £300 of shipping and insurance to the UK border. The commodity code carries a 6% duty rate, and the goods are standard-rated for VAT. Working through the four steps:
| Step | Calculation | Amount |
|---|---|---|
| 1. Commodity code | Duty rate from the tariff | 6% |
| 2. Customs value | £2,000 goods + £300 transport/insurance | £2,300 |
| 3. Customs duty | £2,300 × 6% | £138 |
| 4. Import VAT base | £2,300 customs value + £138 duty | £2,438 |
| 4. Import VAT | £2,438 × 20% | £487.60 |
| Total import charge | £138 duty + £487.60 VAT | £625.60 |
So on a £2,000 order the import duty and VAT add £625.60. The landed cost of the goods (before any onward UK costs) is £2,300 + £625.60 = £2,925.60. If you are VAT-registered and using PVA, the £487.60 VAT is accounted for on your return rather than paid in cash, leaving £138 of duty as the real out-of-pocket import cost.
Thresholds and shortcuts to remember
- Duty under £9 is not charged. If your step-3 figure is £9 or less, no customs duty is collected on the consignment.
- Goods valued at £135 or less are generally free of customs duty. VAT still applies, but for sales to UK consumers it is usually collected at the point of sale rather than at the border.
- VAT rate isn't always 20%. Check the commodity code, a minority of goods are zero-rated or reduced-rated.
- Origin matters. Always check whether a preferential rate applies before assuming the standard tariff.
For the detail behind these thresholds, see the import duty UK guide.
Use the free calculator instead of doing it by hand
The four steps are simple in principle but fiddly in practice, especially confirming the right rate and VAT treatment for your specific code. Our free calculator does the whole thing for you and shows the cited sources behind each number.
Free UK landed cost calculator
Enter your product, value and route and get the duty, import VAT and shipping in seconds, with HMRC, EU TARIC and US HTS sources cited. No sign-up.
Open the calculator →Once your numbers are clear, the remaining setup is your EORI number, correct commodity codes, and (if VAT-registered) Postponed VAT Accounting. If you would rather a specialist handled customs and VAT end to end, GoEcom can match you with a UK ecommerce accountant.