How to calculate UK Import Duty & VAT

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Duty and VAT

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  • Duty and VAT is not applicable on everything entering the UK, see our Basics page for a brief explanation or contact us for guidance for your specific goods.

    If your goods are liable to duty and / or VAT, then the following simple 4-step guide should hopefully explain how it is calculated:

    Coming soon!! Duty and VAT Calculator


    1. Convert the value of your goods, into GB Pounds

    This sounds easy enough, but you must ensure that the correct rate of exchange is used. Q. How do you know if you are using the correct exchange rate? A. If it is the UK Customs rate, then it is. Each month UK Customs issue exchange rates which they will use to convert currencies. Therefore, these are the rates that you must also use.

    See our Exchange Rates page to find the UK Customs exchange rates you need ukimports

     

    2. Calculate the Total value of your goods (Door to Door)

    This sounds like it might be simply the amount you have paid for your goods, right? Maybe not. The 'Terms of Sale' or 'Inco-Terms' between the seller / shipper and you, determines whether or not costs of shipping are added to your Customs entry (C88).

    If the shipping costs are included, then import duty and / or VAT (if applicable) will be paid on price that you have actually paid for the goods.

    So, how can you tell whether these charges will be added to your Customs declaration (Form C88)? Well, if you haven't already done so, we would suggest that it may be worth your while reading our 'Inco-Terms' page, to enable you to find out, and calculate import duty and VAT more accurately. ukimports

     

    3. Calculating basic Import Duty (If applicable)

    Now that you have got your total value of goods (including any associated shipping costs) in GB Pounds, you next need to know what percentage of Duty has been set by UK Customs for your particular goods.


    To do this you need to visit either the UK's .GOV online tariff, or the European TARIC website, via our 'Links' page. Once there, search for your goods under description and enter the Country of Origin. This should then allow you to find the commodity code (keep this 10-digit code, as you will need to ensure that your clearing agent uses this on the Customs entry) and the rate of Import Duty that applies to your goods. Then simply multiply your total value of goods by the Customs Duty rate. This is the approximate amount of Import Duty that you would have to pay to UK Customs. ukimports

     

    4. Calculating the Import VAT (If applicable)

    The Standard rate of VAT in the UK increased to 20.0% on the 4th January 2011 (up from the previous rate of 17.5%). So, to calculate the VAT, you need to do the following:

    Add the amount of Duty, that you just calculated (if any was applicable), to the total value of your goods (incl. the shipping costs), then you have to add all the UK charges, such as Customs clearance and delivery costs (from port of arrival/Bonded Warehouse through to your door). Then, simply multiply this total amount by the rate payable (20.0% for Standard, 5.0% for Reduced rate or 0.0% for Zero-rated goods), to give an approximate amount of VAT that you would have to pay to UK Customs. ukimports

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    Note:

    If you are unsure about how much to add for UK charges, then UK Customs has produced a guideline, in the form of JCCC Paper (05) 64 (click here to view)

    Please remember that the Customs exchange rates change each month, therefore, the amount that you have just calculated, may change.

    If your commodity code has additional duty codes / rates, please see our Taric Help page, for more information. ukimports


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    Payment of Duty and / or VAT to Customs

    Depending on the amount payable, your clearing agent could arrange for the payment of Import Duty & VAT to Customs on your behalf.


    Although you can pay this directly yourself, there are benefits to you agent acting on your behalf. These are as follows:
    - Their payment would be made immediately (or same-day) to reduce any rent / storage payable where your goods are located.
    - Banks usually charge between GB£ 30.00 to GB£ 40.00 for a same-day transfer.

    This immediate payment would either be made via a 'Deferment Account' or 'DAN' (a bank account held with Customs) or via a CHAPs payment (same-day electronic transfer). This service is generally known as ‘Use of DAN’ (UOD). If you require this service, a clearing agent would usually charge in the region of: 2 to 3% of the total Duty and / or VAT payable to Customs, or a have a minimum charge of around GB£ 30.00. In addition to making the immediate payment, your clearing agent will also complete the necessary paperwork (C514), as well as making sure all references are sent with the payment necessary for your shipment to clear Customs. ukimports

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