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Customs & Duties

If you import goods into the UK, you may owe customs duty — a tax charged on goods entering the country from abroad. The amount you pay depends on what you're importing, where it came from, and its value. Understanding how duty is calculated helps you budget accurately, price your products correctly, and avoid unpleasant surprises when your shipment arrives.

The UK Global Tariff

Since leaving the EU's common external tariff, the UK has operated its own customs framework: the UK Global Tariff (UKGT). This sets out the duty rate for every type of goods imported into Great Britain from countries with which the UK does not have a preferential trade agreement.

Duty rates vary considerably by product category. Clothing and footwear often attract rates of 10–12%. Agricultural products can be much higher. Electronics and industrial machinery are frequently zero-rated. The exact rate that applies to your goods is determined by the commodity code.

Commodity Codes and How They Determine Your Rate

Every type of goods imported into the UK is assigned a 10-digit commodity code under the Harmonised System. The first six digits are internationally standardised; the remaining four are UK-specific. Your commodity code determines your duty rate, any applicable trade preferences, and whether additional controls (such as licences or certificates) apply.

Getting the right commodity code is critical. The wrong code can mean paying too much duty — or too little, which can result in penalties. You can look up codes using the UK Trade Tariff tool on GOV.UK. If your goods are complex or you're unsure, a customs broker can provide a formal classification ruling.

The £135 Customs Duty Threshold

Goods with a consignment value of £135 or less are exempt from customs duty. However, this does not mean they are tax-free — VAT still applies. For most business-to-consumer imports under £135, the seller is responsible for collecting and remitting UK VAT at the point of sale.

Above £135, customs duty applies from the first pound, and import VAT is charged at the border. For VAT-registered UK businesses, import VAT can typically be reclaimed via the VAT return — but duty cannot.

How Duty Is Calculated: The Customs Value

UK customs duty is calculated on the customs value of the goods, which is based on the CIF (Cost, Insurance, and Freight) method. This means duty is charged on the cost of the goods plus the cost of shipping and insurance to bring them to the UK border.

For example: if you import goods worth £1,000, with £80 shipping and £20 insurance, your customs value is £1,100. If the applicable duty rate is 5%, you owe £55 in duty. Import VAT (at 20%) is then charged on the customs value plus the duty: £1,155 × 20% = £231.

Common Duty Rates by Product Category

To give a sense of the range: clothing typically attracts 12%, footwear 3–17%, vehicles 6.5%, wine 5.6p per litre per % ABV, and many categories of industrial machinery are zero-rated. Agricultural produce varies enormously — some items carry specific (per-unit) duties rather than ad valorem (percentage) rates.

Preferential rates may apply if the goods originate in a country with which the UK has a free trade agreement. If the goods qualify under the relevant rules of origin, a reduced or zero duty rate may be available — but you need to be able to prove the origin.

What Happens at the Border If Duty Isn't Paid

HMRC requires a customs declaration for all goods entering Great Britain from outside the UK. If duty is underpaid or the declaration is inaccurate, HMRC can issue a demand for the outstanding amount, plus interest and penalties. In serious cases, goods may be seized.

Most businesses use a customs agent or freight forwarder to handle declarations. If you're using Delivered Duty Paid (DDP) Incoterms, your supplier handles the import; under Delivered at Place (DAP) or Ex Works (EXW), the responsibility falls to you as the importer of record.

Plan Ahead, Not After the Fact

The single most common mistake UK importers make is not knowing their duty liability until the invoice lands from their freight forwarder. By that point it's too late to renegotiate with the supplier or reprice the goods. Calculating duty before you order — using the correct commodity code and customs value — puts you in control.