- Import VAT is normally 20%, charged on goods value + customs duty + freight to the UK border.
- A few goods are reduced (5%) or zero-rated (most children's clothing, books).
- Consignments not over £135 to UK consumers: VAT charged at the point of sale, not the border.
- VAT-registered? Reclaim it as input tax; use Postponed VAT Accounting to avoid paying cash at the border.
- Not registered? You pay import VAT and cannot reclaim it, a real cost.
What is VAT on imported goods?
VAT on imported goods, usually called import VAT, is the value added tax charged when goods are brought into the UK from outside the UK. It is the same VAT that applies to domestic sales, just collected on import. It is separate from customs duty (a tariff based on the product and its origin); import VAT is a tax based on value.
This page is a focused companion to the fuller import VAT guide, summarising the essentials for goods specifically.
The rate and what it is charged on
Most goods attract the standard 20% rate. Some are reduced-rated (5%) or zero-rated, mirroring the liability of a domestic sale of the same goods (most children's clothing and books are zero-rated, for example).
Crucially, import VAT is charged on the VAT value, not just the goods price:
Customs value of the goods + customs duty + freight and insurance to the UK border
So duty and freight are inside the VAT base. £1,000 of goods with £40 duty and £120 freight gives a VAT value of £1,160 and import VAT of £232. Model any product and route with the landed cost calculator.
The £135 point-of-sale rule
For consignments of goods not exceeding £135 in value sold to UK consumers, VAT is generally charged at the point of sale by the overseas seller or the online marketplace, and remitted to HMRC, rather than collected at the border. Above £135, import VAT is collected at the border in the normal way (usually via the courier or freight agent, who also charge a handling fee).
The £135 is based on the intrinsic value of the goods. This rule interacts with the marketplace VAT rules, which decide whether the marketplace or the seller is responsible.
Reclaiming import VAT
- VAT-registered businesses reclaim import VAT as input tax (where goods are for taxable business use). With Postponed VAT Accounting you declare and reclaim it in the same return (Box 1 and Box 4); without PVA you reclaim using the monthly C79 certificate.
- Evidence matters: keep your postponed import VAT statement (PVA) or C79 certificate (border-paid) with your records.
- Non-VAT-registered importers cannot reclaim import VAT, so it is a real cost, one reason many ecommerce importers register voluntarily. See how to register.
If imports are a big part of your cost base, an ecommerce accountant will make sure VAT recovery and PVA are set up so import VAT never sits as a cash cost. GoEcom matches you with one free.