How UK import duty and VAT work
When purchasing physical goods from outside the United Kingdom (including the European Union, the United States, China, and elsewhere), your consignment may be subject to UK Customs Duty, import VAT, and carrier handling fees before HMRC and Border Force release the parcel for final delivery.
Customs Duty is calculated on the full Customs Value (also known as CIF: Cost of the goods, Insurance, and Freight). Under the Taxation (Cross-border Trade) Act 2018, goods with an intrinsic consignment value of £135 or under are exempt from Customs Duty. If your consignment exceeds £135, Customs Duty is charged based on the commodity code specified in the UK Integrated Online Tariff.
Worked example of UK import duty and VAT
Suppose you purchase £200.00 worth of clothing from an overseas retailer, with £25.00 international shipping and £5.00 transit insurance. Total Customs Value (CIF) is £230.00. Because the item value exceeds the £135.00 statutory threshold, UK Customs Duty applies.
Under the UK Global Tariff, clothing carries a 12% duty rate. Customs Duty is £27.60 (12% of £230.00). Next, import VAT is charged on the combined total of the Customs Value and the Customs Duty (£230.00 + £27.60 = £257.60). At the standard 20% VAT rate, import VAT is £51.52. Adding a typical £12.00 courier clearance fee produces total import charges of £91.12, bringing your total landed cost to £321.12.
The £135 customs duty threshold and low-value consignments
For packages sent from abroad with an intrinsic goods value of £135 or less, no Customs Duty is charged. However, import VAT still applies. For purchases made through online marketplaces, UK VAT is normally collected directly at checkout by the seller.
If you receive a personal gift sent by an individual abroad, a special gift relief threshold of £39 applies. Gifts valued under £39 are exempt from both Customs Duty and import VAT, while gifts between £39 and £135 are exempt from duty but subject to VAT.
Carrier handling and customs clearance fees
In addition to statutory government taxes, delivery couriers such as Royal Mail, ParcelForce, DHL, FedEx, and UPS charge an administrative fee for handling customs clearance and advancing payment to HMRC on your behalf.
These handling fees typically range from £8 to £15 depending on the courier. You must settle these fees alongside your import taxes before the carrier will deliver your parcel.
To calculate standard UK sales tax and net-to-gross prices, use our UK VAT calculator.
For overall UK personal tax planning and allowances, visit the UK income tax calculator.
Inputs for the UK import tax calculator
Value of goods
The purchase price or commercial value of the imported items in pounds sterling, excluding shipping and insurance.
Shipping and freight cost
The international shipping, postage, or air freight cost to deliver the parcel to the United Kingdom.
Transit insurance
The cost of shipping insurance or transit protection paid to insure the goods against damage or loss.
Product category
The category of merchandise being imported, applying its standard duty rate under the UK Global Tariff schedule.
Import VAT rate
The UK VAT rate applicable to the imported goods (standard 20%, reduced 5%, or zero-rated 0% for books and children clothing).
Courier clearance handling fee
The administrative handling charge levied by Royal Mail or commercial couriers for processing customs clearance.
CALCULATOR QUESTIONS
UK import tax questions
At what threshold do I pay import duty in the UK?
You only pay Customs Duty if the intrinsic value of the goods exceeds £135. Consignments valued at £135 or under are exempt from Customs Duty, though import VAT may still apply.
How is UK import VAT calculated?
UK import VAT is calculated on the total taxable base, which includes the goods value, shipping, insurance, and any Customs Duty payable. The standard VAT rate of 20% is applied to this combined total.
Do I pay import duty on electronics and smartphones?
Under the Information Technology Agreement (ITA) incorporated into the UK Global Tariff, most consumer electronics, laptops, desktop computers, and smartphones have a 0% Customs Duty rate. However, standard 20% import VAT still applies.
Why does Royal Mail or DHL charge a clearance fee?
Couriers act as customs brokers to process the import declaration with HMRC and pay duties upfront on your behalf. They charge a clearance administration fee (typically £8 to £15) for this service.
Are personal gifts taxed when sent from abroad?
Gifts sent between private individuals valued at £39 or less are completely free of duty and VAT. Gifts valued between £39 and £135 are exempt from Customs Duty but subject to import VAT.