Import Duty UK: How It Works in 2025/26

What is import duty?

Import duty, more precisely customs duty, is a tax charged on goods imported into the UK from outside the country. It is collected at the border (or accounted for through customs systems) and is separate from import VAT, though the two are usually paid together.

The headline rate for any given product comes from the UK tariff, which is built on the UK Global Tariff (UKGT), the default Most-Favoured-Nation (MFN) rates the UK applies to imports from countries it has no preferential trade deal with. Where the UK does have a trade agreement, a lower preferential rate may apply instead.

For an ecommerce seller importing stock, duty is a real cost of goods that needs to be in your margin maths before you commit to a supplier order. Getting the commodity code and value right is what makes that maths accurate.

The three things that set your import duty

Every UK import duty calculation comes down to three inputs:

1. The commodity code. This determines the duty rate. The same shipment can attract 0%, 4%, 12% or more depending purely on classification. Find yours in the UK tariff (see our HS / commodity code guide).
2. The customs value. Duty is charged as a percentage of the customs value of the goods (explained below).
3. The country of origin. Where the goods originate determines whether the standard UKGT rate applies or a lower preferential rate under a trade agreement.

Get all three right and the duty figure follows mechanically. Get the commodity code wrong and everything downstream, the rate, the VAT base, your landed cost, is wrong too.

How the customs value is worked out

UK import duty is charged on the customs value of the goods, not simply the price on the invoice. The most common method is the transaction value: the price actually paid or payable for the goods when sold for export to the UK, with certain costs added.

Broadly, the customs value for duty includes:

• The price paid for the goods.
• Transport and insurance costs to the UK border (the point of entry).
• Certain other costs such as commissions and royalties in some cases.

Costs incurred after the goods arrive in the UK (for example onward UK delivery) are generally not part of the customs value for duty. HMRC explains the methods in its guidance on working out the customs value of your imported goods. The duty is then: customs value × duty rate.

Import VAT on top of duty

Import VAT is charged separately from, and on top of, customs duty. The standard UK VAT rate is 20%, and crucially it is charged on a base that includes the duty:

Import VAT = 20% × (customs value + customs duty + shipping/related costs)

So duty has a compounding effect, you pay duty on the goods, then VAT on the goods plus the duty. For example, on £1,000 of goods with £40 of duty and £60 of shipping included in the VAT base, import VAT is 20% × £1,100 = £220.

Most goods are standard-rated at 20%, but some are zero-rated or reduced-rated (for example certain children's clothing). The commodity code confirms the VAT treatment. For a full worked walkthrough, see our how to calculate import duty guide.

The £135 and £9 thresholds

Two thresholds decide whether duty is actually charged on a consignment:

• The £9 duty rule. If the total customs duty that would be due on a consignment is £9 or less, it is not charged. Small, low-duty shipments therefore often carry no duty at all.
• The £135 consignment value. Consignments of goods with an intrinsic value of £135 or less are generally free of customs duty. However, VAT still applies, and for goods sold to UK consumers, that VAT is usually collected by the seller (or the marketplace) at the point of sale rather than at the border, under the rules introduced on 1 January 2021.

Above £135, normal customs duty and import VAT rules apply at the border. Note the distinction: the £135 figure is about the goods value deciding the duty/VAT mechanism; the £9 figure is about the duty amount being too small to bother collecting. HMRC sets these out in its guidance on importing and on tax and duty on goods sent from abroad.

Preferential rates and rules of origin

The standard UK Global Tariff rate is the default. But where the UK has a free trade agreement with the country your goods originate from, for example the UK-EU Trade and Cooperation Agreement, or deals with countries such as Japan, Australia and others, a lower preferential rate may apply, often 0%.

Preferential rates are not automatic. To claim one you must:

• Meet the rules of origin for the agreement, broadly, the goods must genuinely originate in the partner country (wholly obtained there, or sufficiently processed there), not merely shipped through it.
• Hold valid proof of origin, for example a statement on origin from the exporter, or other evidence the agreement specifies.

If you cannot prove origin, you pay the standard UKGT rate even if a deal exists. HMRC covers this in its guidance on checking your goods meet the rules of origin. For ecommerce sellers importing from the EU, the TCA can mean 0% duty on qualifying goods, but only with the right paperwork, which is a common thing to get wrong.

Postponed VAT Accounting: don't pay import VAT in cash

If you are VAT-registered, you do not have to pay import VAT in cash at the border. Postponed VAT Accounting (PVA) lets you account for the import VAT on your VAT return instead, declaring it as both output VAT and input VAT so the net cash effect is nil.

For an importer bringing in stock regularly, PVA removes a significant working-capital drag (you would otherwise pay the VAT up front and reclaim it weeks later). It is free, needs no application, and requires only a GB EORI and VAT registration. We cover the mechanics in the Postponed VAT Accounting guide, and HMRC explains it under accounting for import VAT on your VAT return.

So the full picture for a typical VAT-registered importer: pay any customs duty due, account for import VAT via PVA, make sure you hold a GB EORI, and classify goods with the correct commodity code. Get those right and your landed cost is predictable.