- There is no UK-US free trade agreement covering tariffs, so US goods pay the UK's standard MFN duty rate (from the UK Global Tariff), set by the product's HS code.
- Plus 20% import VAT on goods value + duty + freight.
- Goods consignments not over £135 to consumers: VAT charged at the point of sale, not the border.
- The courier/freight agent collects duty + VAT at the border and adds a clearance/handling fee.
- Get an exact figure for your product with the landed cost calculator.
No UK-US trade deal means standard (MFN) duty
The UK and the US do not have a comprehensive free trade agreement that removes tariffs on goods. In practice that means US-origin goods imported into the UK are charged the UK's Most-Favoured-Nation (MFN) duty rate, the default rate that applies to countries without a preferential agreement.
There is no preferential certificate (no EUR1 or origin declaration) to reduce the rate, because there is no agreement to claim under. The rate you pay depends entirely on the product's commodity (HS) code, looked up in the UK Global Tariff. Some product categories have a 0% MFN rate; many sit in the low single digits to low double digits.
What you actually pay on a US import
Two charges (plus a carrier fee):
- Customs duty: the MFN rate for your HS code, applied to the customs value of the goods (broadly the price paid plus shipping to the UK, depending on the valuation method).
- Import VAT at 20%: charged on the goods value plus the duty plus freight, see import VAT.
- Carrier clearance/handling fee: couriers (UPS, FedEx, DHL, Royal Mail) charge a fee for processing the customs entry and advancing the duty/VAT on your behalf, typically a fixed amount or small percentage.
The duty and import VAT go to HMRC; the handling fee goes to the carrier. For VAT-registered businesses, the import VAT is reclaimable (and better handled via Postponed VAT Accounting); the duty and the handling fee are real costs.
Thresholds that change the treatment
- Goods consignments not over £135 (sold to UK consumers): UK VAT is charged at the point of sale by the seller or marketplace, not at the border. Many US direct-to-consumer sellers and marketplaces handle this at checkout.
- Customs duty low-value relief: duty is generally not charged where the calculated duty falls below the de minimis amount. This means low-value items often attract VAT but little or no duty.
- Above £135: standard import procedures, duty (if due for the HS code and value) and import VAT are collected at the border.
Because the US is a non-preferential origin, there is no benefit to proving origin; the focus is purely on correct HS classification and value.
Worked example: $400 of goods from the US
Say you import goods invoiced at $400 (about £315), shipped for $60 (about £47), with an MFN duty rate of 4% for the HS code:
| Step | Amount |
|---|---|
| Customs value (goods + shipping, illustrative) | £362.00 |
| Customs duty at 4% | £14.48 |
| VAT value (customs value + duty) | £376.48 |
| Import VAT at 20% | £75.30 |
| Carrier handling fee (example) | £12.00 |
| Total charges on import | £101.78 |
Figures are illustrative; the actual duty rate depends on your HS code and the exact customs value. Use the landed cost calculator for your specific product, and exchange rates and carrier fees vary.
Keeping the cost down (legitimately)
- Classify correctly. The HS code sets the duty rate. Misclassification can mean paying more (or a compliance risk if you pay less than due). Use the HS code guide.
- Register for VAT if you import regularly. Import VAT is reclaimable for VAT-registered businesses, and PVA removes the cash-flow hit. Non-registered importers eat the VAT.
- Consolidate shipments where sensible to reduce per-parcel carrier handling fees.
- Declare the true value. Under-declaring to cut duty is illegal and risks penalties and seizure.
If you import from the US at volume, an ecommerce accountant can make sure your VAT recovery and PVA are set up so import VAT is never a real cost.