Ecommerce Import & Customs Glossary

Customs, duty & import terms

Definitions are written so they can be quoted directly. Where a full guide exists, the term links to it.

Commercial invoice

The definitive record of a completed sale of goods, and the primary document customs uses to assess import duty and VAT. See commercial invoice template.

Commodity code

The full 10-digit UK code (built on the 6-digit HS code) used on import declarations to determine the exact duty rate. See HS & commodity codes.

CDS (Customs Declaration Service)

HMRC's online platform through which all UK customs declarations are submitted. See CDS explained.

Customs broker

An agent who prepares and files customs declarations on an importer's behalf, using the importer's EORI number. See customs brokers.

Customs duty

A tax on imported goods based on their commodity code and country of origin, separate from import VAT. See import duty.

Customs value

The value of imported goods on which duty is calculated, broadly the price paid plus freight and insurance to the UK border.

Customs warehouse

An authorised facility where imported goods are stored without paying duty or import VAT until released into free circulation. See customs warehousing.

De minimis

The value threshold below which customs duty is not charged. Import VAT may still apply under separate point-of-sale rules.

EORI number

An Economic Operator Registration and Identification number: a GB-prefixed 12-digit identifier required to import or export goods, issued free by HMRC. See EORI number.

EUR1 certificate

A movement certificate proving goods' originating status so a buyer can claim a preferential duty rate under a trade agreement. See EUR1 certificate.

From freight to postponed VAT

HS code (Harmonised System code)

The internationally standardised 6-digit product classification maintained by the World Customs Organization, the basis for customs tariffs worldwide. See HS codes.

Import VAT

VAT (usually 20%) charged on goods imported into the UK, calculated on the customs value plus duty plus freight. See import VAT.

Incoterms

Standardised international trade terms (e.g. DAP, DDP, FOB) defining who is responsible for freight, insurance and import charges.

Inward Processing Relief (IPR)

A special procedure allowing goods to be imported for processing or repair with duty and import VAT suspended, provided they are re-exported. See inward processing relief.

IOSS (Import One Stop Shop)

An EU scheme letting sellers charge EU VAT at checkout on consignments up to 150 euros. See OSS & IOSS.

MFN (Most-Favoured-Nation) rate

The standard WTO duty rate applied where no trade-agreement preference applies. For the UK this is the UK Global Tariff rate.

OSS (One Stop Shop)

An EU scheme for declaring VAT on cross-border sales to EU consumers from EU-held stock, via a single return.

Packing list

A document itemising the physical contents, weights and dimensions of each carton or pallet in a shipment.

Preferential rate

A reduced or zero duty rate under a free trade agreement, claimable only with valid proof of origin.

Proforma invoice

A preliminary, non-binding invoice issued before a sale to quote or confirm an order. See proforma invoice.

Proof of origin

Evidence that goods meet a trade agreement's rules of origin, such as an EUR1 certificate or an invoice origin declaration.

PVA (Postponed VAT Accounting)

A scheme letting VAT-registered importers account for import VAT on their VAT return instead of paying it at the border. See PVA.

Rules of origin to UKGT

Rules of origin

The criteria in a trade agreement that determine whether goods count as originating in a country, and so qualify for the preferential duty rate.

Shipper's Letter of Instruction (SLI)

The exporter's written instructions to the freight forwarder, authorising them to handle the shipment and prepare the export declaration. See SLI.

UK Global Tariff (UKGT)

The UK's MFN tariff schedule, in effect since 1 January 2021, setting default duty rates for imports from countries without a UK trade agreement. See UK Global Tariff.

VAT on imported goods

See Import VAT. The same 20% standard rate that applies to UK sales, charged on import on the value plus duty plus freight. See VAT on imported goods.

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