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Import Duty & VAT Threshold on Imported Goods

August 4, 2014 by Andrew Minalto - 605 Comments
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import-vat-tresholdToday’s article is about something quite simple, but still hugely important – import duty and VAT on goods bought from outside the EU.

I receive countless emails every week from people asking me about import taxes; how much they are, when do they apply, how to calculate them etc.

And although once you start importing it becomes second nature and incredibly simple, it is something that can be off-putting initially and as a result; some people continue ordering from local wholesalers at much higher prices than they could get importing directly from places like China or the US.

So today I’m going to go over import taxes and give you a guide to use when importing goods to the UK from outside the EU.

First things first; what taxes do you have to pay on imported goods?

In general, you need to pay VAT (Value Added Tax) and import duty.

VAT is a set amount (currently 20%) whereas import duty varies depending on the type of product, with many being duty-free.

Import duty is calculated as a percentage of the customs value of the goods you are importing, which means:

  • The price paid for the goods.
  • The shipping cost.
  • The insurance cost.

As mentioned above, the duty rate depends on the product type and many are actually duty free. I won’t list them all here but some popular duty free products include:

  • Books
  • Computer Software
  • Desktop PCs
  • Laptops
  • Tablets
  • Mobile Phones
  • Video Game Consoles

So as you can see, a number of products actually have a ‘nil’ rate of duty, even when imported from outside the EU.

To find out the exact duty rate for a specific product, you need to know its HS (Harmonized System) Code, which is basically the universal code to categorise a product.

The simplest and easiest way to find the HS code for a product is by using this site:

http://www.dutycalculator.com/

And then VAT, which is currently a set 20%, is calculated as a percentage of the total customs value PLUS any duty paid.

But one other thing to bear in mind when importing are the minimum thresholds, below which duty/VAT is waived.

For business purchases, import duty is NOT charged if:

  • The total order is worth £135 or less.
  • The total amount of import duty due is less than £9.

And then for VAT – it is NOT charged for any import worth less than £15 with the exception of tobacco, alcohol and perfumes – for which VAT is always payable, regardless of the order amount.

So that’s it – those are the minimum thresholds for paying VAT and duty on orders from outside the EU – £135 for import duty and £15 for VAT.

Personal Purchases/Gifts

giftsBut this only applies to business imports. If you are receiving gifts from outside the EU, the minimum thresholds are slightly different:

  • For import duty for gifts, if the total value is less than £630, then a flat rate of 2.5% is paid.
  • Anything above that value is charged at the normal rate of duty.
  • For VAT for gifts, it is charged on anything above £36 in value.

Obviously we are really only concerned with business imports, but I just wanted to clarify the rules regarding gifts to make everything crystal clear.

And that brings me onto another important point…

Undervaluing Goods or Marking Them as Gifts

I’m sure you’ve all seen this 100s of times! In fact it’s so common that it has pretty much become regular practice for imports from China…

The order is either undervalued on the customs declarations form or it is marked as a gift (more common with small, personal orders on eBay etc.).

I hope you already know without me having to say that you should not do this under any circumstances, because:

It’s illegal!

This should be reason enough for everyone to avoid this practice – undervaluing goods in order to avoid VAT and import duty is ILLEGAL, as simple as that.

And no, the old claim of ‘I didn’t know it was being undervalued as my supplier did it without me asking’ is NOT a valid excuse! You, as the importer, are solely responsible for the items you are ordering and must ensure that all customs declaration forms are filled in correctly.

Another big problem with undervaluing imports is that it makes it impossible to properly book these orders and sales within your accounting.

When you’ve declared an order worth £130 when it was really worth £400, then what happens when you sell those items for £800? You’ve now created extra profit that doesn’t actual exist… ‘profit’ that you will then have to pay tax on… completely negating the benefit of undervaluing your order in the first place.

Basically; it will completely screw-up your accounts which WILL be a huge problem for you – particular as your business grows and you register as a Ltd company.

And that brings me onto the final reason for why you should never undervalue your orders –

It is the absolute WRONG mentality for creating a long-term, successful business.

If you’re relying on avoiding VAT and import duty to make some short-term profit, then your mentality is all wrong and, I’m sorry to say, you probably won’t create a successful business anyway.

If the product you’re looking at importing and selling isn’t profitable when you pay the correct taxes, then you should be looking for another product – not trying to figure out how to avoid paying those taxes!

Do things right from the beginning and you will continue that way!

I’m sorry if you feel I’m going on about this for too long, but it is so important that you don’t go down this route, particularly for new and first-time importers.

So please, always declare the correct amounts so that you can properly book your purchases and sales, and build a real business.

Now lastly for this guide, I want to do a quick example calculation for you so you can follow the same steps yourself.

Example calculation

For my example, let’s say I am ordering a set of high-end tennis rackets from the US, which I am importing to the UK.

Firstly, I need to calculate the customs value:

$1,000 (10x $100 rackets) + $150 (shipping cost) + $20 (insurance) =$1,170

IMPORTANT – I now need to convert this amount to GBP (British Pound) for tax purposes but this cannot just be estimated or taken from an online exchange site like xe.com, no – instead you are given the rate of exchange to use each month by HMRC, which you can find here: Exchange Rates 2014

So for my calculation, the $-£ exchange rate for August 2014 is 1.7042 which means my import is valued at £686.54 ($1,170/1.7042).

The third step is to calculate the import duty, which for tennis rackets from the US is 4.7%:

£686.54 x 4.7% = £32.27

Next is to calculate the VAT at 20%. And remember, this is paid on the total customs value (£686.64) PLUS the duty paid (£32.27), so:

£686.64 + £32.27 =

£718.91 x 20% = £143.78

That means all that’s left for me to do is add the import duty and VAT together to find out the total amount of import tax payable on this order, which is £176.05 – making my total landed cost for the 10 tennis rackets £862.59 (total product cost + all import taxes).

And that’s it! 5 simple steps to calculate the exact final cost for any import order.

And although it is important to understand how it works, you don’t actually have to worry about and calculate all the details yourself if you use a freight forwarder for your order (which is what I always recommend).

A freight forwarder takes care of EVERYTHING when you import, including shipping and customs so there’s really very little for you to do.

If you need a freight forwarder in the UK, my recommendation is Woodland Global – they have an impeccable reputation and cater equally to small and large businesses, with very reasonable pricing.

Also, if you’re sending small packages via courier companies – again, you don’t have to worry about this procedure as couriers will do the customs clearance procedure for you.

Still, its essential to learn how this process works so that you can calculate POTENTIAL taxes before you place any orders, so you know exactly how much goods will cost you when they’re delivered to you.

So that covers pretty much all I wanted to go over in this post – now all that’s left is for you to take action!

Use this guide along with my hugely popular posts on How to Import Products from China & How to Avoid Scammers and Find Trusted Suppliers on Alibaba to start your very own importing business.

I really have provided you with everything you need, so don’t procrastinate and make excuses, use what you’ve learnt and get started today!

I look forward to hearing your success stories soon!

All the best,
Andrew


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605 Comments
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  1. Sharif Khan

    Hi Andrew
    Great article, very helpful.
    Please can you let me know what you think about this situation.

    Business A buys stock from handmakers in Asia which is sent by an agent in country to the UK. The items come in lots of small packets that are rarely taxed when arriving in the UK. On the companies accounts £20, 000 worth of purchase receipts come from Asia but due to the method of sending there has not been much VAT charged. Does the business now have to highlight this? To HMRC? Are there any laws or penalties for previously imported items that were not taxed? Thank you for your time

    1. Andrew Minalto

      Hi Sharif,

      Thanks for your comment.

      I have also thought about situations like this but I don’t have the answer for you…

      You will have to contact HMRC and ask them how this should be handled, whatever you have to pay VAT/import duty on those imports.

      Andrew

  2. Malcolm Dodd

    Excellent articles, thank you.
    Am I correct in remembering that the £15 threshold for non-EU imports used to be £17?
    Malcolm

    1. Andrew Minalto

      It could be, I can’t remember, lol

  3. Hi Andrew,

    If I buy a gift that is £50 do I only pay the difference in VAT above the £39 threshold or do I pay VAT on the whole amount?

    Thanks,
    James

    1. Andrew Minalto

      Hi James,

      On whole amount, £50.

      Andrew

      1. Hi. I have experienced this also where I paid duties on the whole amount not just the difference and an £8 handling charge on top. Why is it that the first £15 of it was included in the calculation?. That is really not fair. Could that be challenged in court. As I knew i was going to pay charges as I had bought an item that was over the threshold. I was expecting to be charged but I wasn’t expecting to be penalized for going over the threshold.

      2. Andrew Minalto

        It’s perfectly normal practice…

        Same can be applied for business registrations after they reach VAT threshold – once you’re VAT registered, you charge VAT on ALL sales, not just amount that goes over the VAT threshold. So it’s very common practice.

        Andrew

  4. Hi Andrew,

    Thank you for your article, I want to import 100 pieces of mobile accessories (total value less than 500 GBP), I will most likely sell them on eBay, Amazon, etc… should I be registered in UK as a company? if Yes, can I do that after receiving the Goods, or that will cause me some troubles?

    Samo

    1. Andrew Minalto

      Hi Samo,

      Thanks for your comment.

      For the importing part – no, you don’t have to register a company to do this. You can easily import these items as an individual.

      But if we look at the grand scheme here – IF you buy items with intent to re-sell and make profit, this means you’re actually running a business and by law you
      are required to register it – it can be a Sole Trader form (easier) or an Ltd. company – choice is yours.

      Thanks,
      Andrew

      1. Hi Andrew,

        Thank for you very much for your valuable reply.

        I will do register as Sole Trader before starting selling the goods.
        I need to prepare the listing first, and I assume I will not start before one month, which is enough time to register as a business runner.

        I didn’t want to block the shipment on the sake of registration, that is all.

        Regards,
        Samo

      2. Andrew Minalto

        No problem, you’re welcome Samo! 🙂

  5. Hi Andrew,
    Thank you for a great article.
    I want to import Mobile Phone Accessories from China under my own brand.

    I can’t find anywhere what percentage Import duty i have to pay on Mobile Phone accessories.

    Could you please help?

    Thank you

    1. Andrew Minalto

      Hi Jay,

      You can easily find that on this page:

      https://www.gov.uk/trade-tariff

      Thanks,
      Andrew

  6. Hi, great article. I was researching the customs and fees but it’s quite confusing. If you could help me with that I would appreciate. I want to buy inflatable photo booth from China, Alibaba.com. I have been quoted for 318$ + 158$ Shipping by FedEx. How the custom, duty, vat would work?
    Thank you
    Pauline

    1. Andrew Minalto

      Hi Pauline,

      You can use 25% as a good ball park figure to calculate VAT and import duty.

      So if your item + shipping will cost $476, 25% from that is $119 (which is the approx. amount of money you will have to pay in import duty + VAT).

      You can even use 30% here to be conservative and avoid any surprises.

      Andrew

  7. Des Gardener

    I have been offered 1500 gold sovereigns for £5,000. The coins are in Turkey and l want to bring them back to UK.
    As l have paid £5,000 for them, that would be the value that l declare. Is this correct?
    Thanks in advance for any help given.

    1. Andrew Minalto

      Not sure how it works on gold but in theory yes – that would be the value.

      Just make sure you have some kind of proof of purchase available (receipt) to show to Customs.

      Andrew

  8. Hi, I have just made a purchase from the US for £23.19 plus £5.58 carriage. Royal Mail have charged me £4.64 in taxes plus an £8.00 admin charge. It’s the £8.00 fee that I begrudge so is there anyway that the supplier in the US can invoice duty paid, whereby they pay the UK taxes and I avoid being stung by Royal Mail.

    1. Andrew Minalto

      Hi Stewart,

      Some companies have arrangements with courier companies and they cover all Customs duties on customer behalf but these are rather rare exceptions (say Amazon does this) and usually it’s end customer responsible for this.

      Andrew

  9. Hi if i pay say £100 for my products from china, can i understand that your saying I then have to say what i think each will make me when i sell them on my declaration or is it i just say its £100 what i paid for them ??

    My other question is I brought 30 biker scarfs for £20 with free shipping from china , they came today, and i was asked for no payment for vat or anything else, i think it was hermes , and this was my first test with my one man business to see how it went.

    I wish to pay my dues is there a site where i can declare my goods so i can pay vat and whatever else please thanks for any help i am a disbaled guy working from home

    1. Andrew Minalto

      Hi John,

      1) No, you DON’T pay taxes on the re-sale value. You pay import taxes on the value you paid supplier so in your case – £100.

      2) A shipment worth just £20 should not be taxed, so you’re all good.

      Andrew

  10. Hi Andrew,
    Great article. Many thanks.

    I would like to open a small business, I want to import small leather goods from South America to the UK.

    What I need to know is, if it is fine if someone else is buying the goods for me and using her name for the invoice (for tax purpose of the country). That means that I will have the invoice but no with my name on it. I want to confirm that I can use the invoice when I have to do my tax return?

    Thank you.
    Mariana.

    1. Andrew Minalto

      Hi Mariana,

      Thanks for your comment.

      No, it won’t be fine… all invoices should be in your name.

      Otherwise people would just borrow/steal invoices from other people/companies to reduce their taxable income.

      So make sure that all invoices are in your name.

      Thanks,
      Andrew

  11. Hi Andrew,

    Thank you again for your very informative article.

    Can I ask a question about low value goods please?

    I am looking at an eBay purchase that would be sent from Australia to the UK. The purchase price works out below £15 when converted to sterling but the shipping cost of £5 takes it above £15 in total value.

    I understand from the HMRC web pages that VAT is due on the total amount including postage if the goods are worth over £15, but its not clear whether VAT is chargeable if the goods excluding shipping are worth less than £15.

    Hope that makes sense.

    If VAT is payable, the VAT cost on top of the flat rate Royal Mail handling charge makes it not worth buying…

    1. Andrew Minalto

      Hi Paul,

      Not sure on this one but it is such a small value, why not simply risk it?

      if don’t want to risk, just buy the item locally 😉

      Andrew

  12. Hello Andrew ,I wait parcel from Ukraine on total cost 945uah =25.5£ Do I need pay custom duty and vat ?
    or just must pay vat if yes how much ?
    Sincerely Igor

    1. Hi Andrew, very clear and good article. Can I ask, when we all buy items off ebay that are imported from good old china and hong kong etc (personal orders not business) how come we don’t keep getting VAT payment requests? Is it just a volume thing and the HMRC can only sample a certain amount being imported? I am considering buyuing a webasto van heater from Russia (value about £450), I’m wondering what the difference is buying this direct from Russian business, to buying stuff off ebay from a non eu company. Will I get import duty (2.5%) and VAT added, is it definite or a bit of a lottery? Many thanks Graham

      1. Andrew Minalto

        Hi Graham,

        Yes, it is a lottery….

        Only small part of all shipments are manually inspected – most go through customs without people paying taxes, even if they should because sellers put low values on customs declarations. The smaller the actual package is (physical size) the higher the chances that it will go through customs without any charges.

        Thanks,
        Andrew

    2. Andrew Minalto

      Hi Igor,

      You just wait for the package to arrive and then you will see whatever you need to pay any taxes or not.

      Most likely you won’t have to pay anything on such a low value shipment.

      Thanks,
      Andrew

  13. Hi Andrew,

    I recently purchased a cake mold from the US via Etsy. The mold was £19.75 +£10.46 shipping. I have been informed today while collecting another parcel from my local sorting office to expect a card as I have a parcel with Custom duty fees of £11.55. I have tried looking this up and all I can find is if the value is less then £135 it is not eligible for duty but is eligible for VAT as it is over £15. Can you please explain why it would be so high.

    kind regards

    Bryony

    1. Andrew Minalto

      The fees is made out of processing fee + the actual VAT or import duty.

      Hence it is so high as you’re paying for the processing of documents (foxed fee), no matter the value of shipment.

      Andrew

  14. Owing to longterm anxiety my mind gets so confused & flustered and can never work out all these charges, All I know is, anything costing more than £15 will get charged almost as much again, and it goes up for each increase in price after that, so effectively you end up paying twice or more for anything you buy from outside the EU that comes to more than £15 including shipping. When I challenged this I was told it is to discourage people from buying outside of the EU , I think this is disgraceful & coercive, trying to stop people from buying something. because UK customs just assume they are buying elsewhere to save money and they should buy it in the EU instead. BUT, and this is my main gripe, when it is impossible to find something for sale in the UK or EU and it is only being sold in US or Japan or China, you have no option but to buy from there. Certain dolls or other child’s toys are just not being offered for sale in the UK or EU and the threshold of nothing over £15 or expect massive sets of charges is disgusting. I wanted to buy a doll for just over £17 but with shipping added, then import & additional charges, probably not even including the £8 Royal Mail fee, it came to more than £47, this is just ridiculous. Something should be done to stop people being penalised in this way for merely wanting to buy something that they would happily buy from the UK if it was being sold here!

    1. Andrew Minalto

      Hi Rose,

      Thanks for your comment.

      I’m afraid this is how it works in almost every country in the World….

      The pricing doubling principle – it will only apply to small value items. When you buy something that is worth hundreds or thousands of pounds, the actual tax you pay will be around 25% of the value.

      And shipping is shipping – you can’t expect items to get delivered around the World for free or very cheaply – it costs what it costs.

      Andrew

      1. Hello, thanks for reply. I don’t expect the shipping to be very cheap or free, but there are some items I have bought from US where the shipping has been a ‘normal’, expected price, but other times, an item costing even less has had shipping applied many times more than the cost of the item. I have bought from the US where the postage has been between £3 to £5, which is reasonable, but other times, items of the same price, will have shipping charges anything between £30 to £40 or more. This is a ridiculous discrepancy in price difference. I know that some sellers will charge more for shipping to make up for selling something at what they see as a low price, but often, I have contacted a seller and they have been shocked at the price of the shipping as it has been shown as much lower at their end. One seller was so shocked they sent me an extra item free to make up for the shipping charges that eBay had applied , which came to more than the items were worth. If even sellers themselves get confused and are shocked at the inflated charges that seem to be randomly applied, then it is much worse for someone with anxiety who gets fazed and bewildered by things anyway, let alone the complications for just trying to buy something from elsewhere.,

      2. Andrew Minalto

        Hi Rose,

        You’re mixing normal shipping up with eBay’s Global Shipping program:

        https://andrewminalto.com/global-shipping-program/

        (which is VERY expensive indeed).

        My advice – just don’t buy from sellers using GSP and don’t pay those over the top shipping fees. That’s what I do.

        Andrew

  15. Hi Andrew,

    I know that you need to register for VAT if you exceed the revenue threshold entitled for a specific EU country when doing B2C. How would this apply in the following cases?

    Case 1: Non-EU company (on your behalf) sends the product to a customer of a value of €50. And let say that you would do 200 sales per months. Hereby we can know that the threshold would be reached in a couple of months. The case here is. As the price is €50, the customer would pay the customs once arriving to EU country and then you would need as well to pay the VAT in the country that you have exceeded the threshold. Would that make sense to have 2x VAT on the product?

    Case 2: Non-EU company (on your behalf) sends the product to a customer which value is below the customs threshold = customs free. For UK this would be £15 while for most of the EU countries €22. Hereby it is clear the customer won’t need to pay any VAT. What about the seller. If the seller (EU company) buys the product for €10 and sells the product for €15 which is sent by NON-EU company, which amount goes in the threshold (if it goes – i am not sure if the threshold should be only applicable for your margin)? – note: actually you are here the middle man aka. drop-shipper. Would it work to create the bill only for rendered service (even if you are doing huge cash-flows in your account)?

    Thank you for your time and expertise.
    Mac

    1. Andrew Minalto

      Hi Mac,

      I’m sorry but I really can’t give advice on such complex situations, especially when non-EU companies/distribution is involved. I’m simply not qualified to give advice on such complex tax and importing matters.

      You need to consult an accountant to get answers to these questions.

      Thanks,
      Andrew

  16. Hi I have just started to sell on FBA I have an item I want to import from china its a number of items and is a few £1000 the company I’m purchasing the items from are using a forwarder (FBA service in china) its called they have said it is door to door the items and import cost will probably be around £6000, now they said that they do not need an EORI number as they have this organised with amazon they have also said the duty and tax is all paid for in the amount I am giving them I am concerned.

    1. Andrew Minalto

      Hi Gareth,

      You should be concerned, yes – sounds like a scam to me – all too good and rosy.

      What is the product you’re buying from them?

      Andrew

      1. Gareth

        Its a magnetic child’s reward chart that I have designed they have sent me a sample its really good.

      2. Gareth

        they are saying its a double sides custom clearance + double sides free duty, they are saying that there forwarder will be the import company and clear all the FBA goods duty then shipping them to UK clients they are saying they will label all the items and containers once I have made the shipping plan with amazon. they are saying it also includes shipping

      3. Gareth

        This is the cost and weight they sent me in an email.

        500 sets about 850kg
        Production time: about 25 days(it’s a little busy after CNY holiday and the production time about 25 days now)
        Shipping by sea, shipping time 35-40 days, door to door , free duty, shipping fee: 1850usd for 500 sets.

      4. Gareth

        They have worked with me for about 3 months getting the product just right so they have put time and effort into it so that makes me think they now what they are doing you see I looked on Alibaba and there are companys saying they specialise in door to door amazon fba and that you do not need an eori number and that they calculate the duty and tax required in the cost.

      5. Andrew Minalto

        OK, then it’s probably all good.

        From the initial post it was not clear about all this that’s why I said it’s scam – as scammers usually use this tactic for branded goods.

        But from what I see from your replies, this won’t be the case as product is not high risk item and supplier is genuine too.

        Thanks,
        Andrew

      6. Gareth

        they have worked with me on the project really well and they have good feedback in Alibaba they use a forwarder that apparently specialises in this operation

  17. Hi Andrew
    I bought a coat from New Zeland a couple o weeks back for NZD 238.00.
    This is a personal transaction from a business in New Zeland (Stoney Creek).
    I’m expecting delivery any day, but worried it might be held back in customs waiting for me to pay the VAT.
    Do I need to declare that I’m expecting delivery from outside the EU?
    Or will someone get in touch with me?
    How much should I expect ti have to pay?
    Thank You

    1. Andrew Minalto

      Hi Elen,

      IF there will be taxes to paid, shipping company will contact you about it.

      You don’t have to do anything on your own.

      Thanks,
      Andrew

  18. Hey
    I bought a collectable figure from a private seller costing around £133 (I converted it from $) and shipping was about £15 (again converted). It was marked as a gift because it is. But do I still have to pay the custom charges? I’m kinda confused. Any ideas of what the draft price of fees might be or how to avoid as its a gift. Thanks in advance

    1. Andrew Minalto

      Hi Sarah,

      You will only see when the item arrives in the UK.

      But mostly likely no, you won’t have to pay any extra fees on this purchase.

      Andrew

    2. Forgot to say it’s coming from USA to uk

  19. Hi I bought a pair of DJI drone goggles from a company in the USA for £299
    Now the parcel is being held by customs.
    Any idea how long it will be before its released and any idea how much duties and taxes I will have to pay
    Thank you

    1. Andrew Minalto

      Hi Darren,

      VAT and import duty will probably be around £50 or so.

      Usually it takes just few business days for this process, one week max.

      Thanks,
      Andrew

  20. Hi Andrew
    I bought a used excavator that was imported from the uk to Australia. I am now thinking about exporting back to the uk as its finished its job. Would i have to pay duty on it as it would have been already paid on this machine when it first entered the uk.

    1. Andrew Minalto

      Hi Tom,

      Please contact HMRC to find out how this works but yes, I think in case of re-importing you shouldn’t have to pay VAT and import duty again but I don’t know exactly how
      it works as I have never done it myself.

      Thanks,
      Andrew

  21. Hi Andrew
    I am potentially buying a saddle from a private seller in the US for approximately £1738 (saddle + Shipping) please could you advise on the import costs I shall expect.
    Kind regards
    Alex

    1. Andrew Minalto

      Hi Alex,

      I won’t give you an exact number but roughly – take the item + shipping costs and use a multiplayer of 1.25 to get final cost of goods delivered to you.

      So basically it’s approximately 25% in taxes on item + shipping costs.

      Thanks,
      Andrew

  22. Hi Andrew,

    Firstly, thank you for the very informative article!!

    I’m planning to import clothing from a non EU country for reselling in the UK. I understand the items will be subject to VAT + import duties.

    On Gov.uk, it states that “you can usually reclaim the VAT paid on goods and services purchased for use in your business. You will usually get your refund within 10 days of HMRC receiving your return”.

    Does this apply to my business? I.e. can i reclaim the VAT paid if I’m selling the items? Or does it only apply if I’m using it within the business (e.g. if I bought a company laptop for use and not for sale). If it applies, can i reclaim straight away? Or does it have to be annually?

    Apologies if this answer is obvious – I’m confusing myself more and more everyday!

    Thanks in advance

    Ru

    1. Andrew Minalto

      Hi Ru,

      It ONLY applies to VAT registered companies.

      You’re most likely NOT VAT registered so you can’t claim back any VAT you pay on imports.

      Andrew

  23. Helen Kenr

    Hi, I have to return an item to the US to be altered. I have already paid customs duty when I received the item, will I have to pay it again once it is returned to me?

    1. Andrew Minalto

      Hi Helen,

      Please call HMRC and ask them about this – proper way to do this to not pay taxes twice.

      Andrew

  24. Hi, Thank you for all of your wonderful articles!
    I am currently signing on with a fulfillment center in the UK and will be sending cosmetics products to this center from the USA and other EU countries. I don’t have a registered company in England and will only be storing the products at this center until it is resold on our e-commerce website which will only be targeting countries in the Middle East (aka will not be sold in the EU). Do I need to register for VAT or have a registered company in the UK? Who usually deals with customs in this kind of situation? Thank you in advance!

    1. Andrew Minalto

      Hi Erika,

      Please contact HMRC for advice on this as I won’t be able to give qualified advice here.

      Thanks,
      Andrew

  25. Great write up,
    Do you need a EORI number if ordering goods from a non EU country below £120.00 pounds.

    1. Andrew Minalto

      No, you don’t need it.

  26. Thank you for your article, very helpful

    I am just starting selling items in UK imported from China. I am not VAT registered Paperwork is really confusing. There is some SAD document to be filled in, who and when is creating document ? Shall I pay VAT separate on VAT return after my good are release from custom?

    thank you

    1. Andrew Minalto

      Hi Sylwia,

      How are you importing these these goods? Via a courier?

      if so, you don’t have to worry about anything – they will take care of Customs clearance for you.

      You just have to pay the tax invoice they provide.

      Andrew

  27. Hello Andrew,

    I’ve just started a woman’s knitwear boutique. Do i have to be vat registered? Also iv found a wholesale company based in Spain and their international transactions are free of taxes what does that mean?

    1. Andrew Minalto

      Hi Sharon,

      Thanks for your comment.

      No, you don’t have to be VAT registered when you start out, if you don’t want to.

      As for wholesaler in Spain – it will ONLY be VAT free for you IF you have a VAT registered company.

      If you don’t register for VAT, you’ll have to pay VAT to that supplier in Spain, at a time of placing order.

      Thanks,
      Andrew

  28. i live in the uk running a vat reg ltd company
    iam looking to start to import items from china
    do i have to pay import taxes vat etc and also pay vat on my quarterly accounts for these items

    1. Andrew Minalto

      Hi Jack,

      Thanks for your comment.

      Yes, you’ll have to pay VAT and import duty on imports.

      And yes, you also pay VAT on sales, just like you normally do. Of course the VAT you pay when importing goods you will take off the VAT you take in on sales, you only pay the difference to HMRC.

      Thanks,
      Andrew

  29. Dawn Hodgson

    Hi, I bought a bag from a chap in Saudi ( second hand) which had been bought in England when he lived here. Is there duty and tax to pay on this coming back into the country? ( I bought it from Ebay) or should I query the cost that I have been charged seeing as it was purchased here to begin with?
    Many thanks Dawn

    1. Andrew Minalto

      Hi Dawn,

      It really comes. down to value of the item and what sum will be put on Customs declaration.

      If it’s a super expensive bag, then probably you will have to pay taxes.

      Andrew

  30. Ahmed Talha

    Hi Andrew,
    I plan to start business in London, where i will be importing paper craft materials (used in craft hobby) for own inventory in London and also re-export part of it to Dubai for a shop. Will i get any waiver on the VAT as the goods imported will be re exported to a Non EU country.

    1. Andrew Minalto

      Hi Ahemd,

      I don’t know really anything about how re-exporting in a situation like this works…

      Your best bet is to call HMR and ask them directly.

      Thanks,
      Andrew

  31. ryan surgett

    Hi Andrew,

    Thank you for the article, great read.

    Do you have any experience with deferment accounts? My FF has offered me the option of using theirs at a 1.5% Fee. From a cash flow perspective and in order to grow my business this seems quite appealing.

    Thank you,

    Ryan

    1. Andrew Minalto

      Hi Ryan,

      Yes, of course – it is a good idea to get your own deferment account if you plan on importing regularly.

      For first few times can use FFs one of course and if it all goes well, then get your own account.

      Thanks,
      Andrew

  32. Nicholas Christakis

    Great post, but have a quick question

    Lets say we import Toys from the USA to UK, we know we have a duty to pay, but for VAT purposes, if we resell the imported products as a business and going concern on ebay or amazon, we would be VAT taxed twice, can VAT be waived or reduced at the import and duty stage for the goods importaned from non EU origin

    1. Andrew Minalto

      Hi Nicholas,

      Thanks for your email.

      You wouldn’t pay VAT twice, no. When you do your VAT return, you’ll take off the amount you paid to Customs, just like other expenses related VAT from the VAT you charge customers. So essentially you just pay VAT difference in what you charge in VAT minus VAT you pay on your expenses.

      Also, there’s an option to NOT pay VAT and import duty at the time of importing at all. More details here:

      https://www.gov.uk/government/publications/notice-101-deferring-duty-vat-and-other-charges?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000013&propertyType=document

      Thanks,
      Andrew

  33. Rushod Choudhury

    Hello Andrew thanks for lovely article, I’m a sold trader in UK I’ve 2 questions to you my question number 1. Do I need an import licence to import the goods ( clothes for men and women) into the UK ?

    2.
    Will I be able to obtain a reduced rate of duty if our supplier issues a GSP cert for the goods ?
    Thanks

    1. Andrew Minalto

      No, you don’t need any special import licences to import clothing items.

      Not sure about GSP and reduced duty, this is something you have to find out @ customs.

      Thanks,
      Andrew

      1. Rushod Choudhury

        Thanks

  34. Hi Andrew,

    Great article. Thank you.

    I hope that you could help me to clarify my question. I order goods from a Non-EU country. The supplier offered their own forwarder which will take care of Tax duty and VAT but they are not able to provide any paperwork because my goods are in the bulk of other goods for different buyers like myself . The goods have arrived with no problem. I am not VAT registered but of cause I have to pay VAT on imported goods.
    I understand that everything have been paid as my goods have arrived. Or will I have a problem at a later date? Thanks

    Kind Regards
    Elena

    1. Andrew Minalto

      Hi Elena,

      Thanks for your comment.

      That is quite interesting situation you’re in there – hmm, not sure what to even advise – as you buy products from a non-eu company but goods are delivered already cleared through customs, taxes paid for. Theoretically you should pay taxes and account for them but how to do it in your situation? I don’t know… I would call up HMRC and ask for advice there or at least speak with an accountant who can give you some more info on how to handle this situation.

      Andrew

  35. Hi Andrew, can you help me out. I work with a company registered in France and sell goods into a company in Ireland. Some of the items are manufactured in China that we re-sell to our Irish customer and we are thinking of delivering them directly from the factory in china to them to reduce transport/handling costs. My question is what vat is due by the customer in ireland, vat based on our selling price or based on the import price we have from china.

  36. L Subramanyam

    Very well explained. It cleared my doubts I have regarding a recent shipment I received from India for repair work and later to be sent back. I am charged by the Freight Forwarder ” Agility Logistics”in U.K. An amount of GBP 5982.00 towards custom Duty + Value. I was confused as in the invoice “Value” is shown as “value added Tax”.

    Now after reading above I could make out that custom duty is added to the value of the received goods for repair (appropriated)

  37. Hi Andrew. Hoping you can help. I am british, but have been a non resident for many years; currently i live in the Philippines.
    I recently returned to UK for a two week holiday. Before my trip, I ordered an expensive item of jewelery from America to be delivered to my family address in UK. VAT and import duty was due, which I paid via FedEx. I collected the jewelery during my trip, and took it back with me to the Philippines.
    Now back home in Manila, I am trying to reclaim the VAT and duty, using the C285 form. I have been asked to provide a certificate of export, which I don’t have; I removed the item from the UK by taking it in my luggage.
    Do I have a legitimate claim for a VAT and duty refund, and is there any other evidence I can show HMRC to prove I have removed the item from UK?

    1. Andrew Minalto

      I’m sorry Chris but I won’t be able to help with this us as I have never done this myself. Your best bet is to simply call/email HMRC and see what they can advise you.

  38. Hello andrew, i want know one thing, many time i brought goods from china, they send me goods invoice, but in uk i pay vat more then goods invoice or shipping charges, they never mention shipping cost in my invoice, i pay shipping money less, but custom take vat tax , very high value of freight, i want know next time need to mention shipping cost add in goods value invoice .. thank

    1. Andrew Minalto

      Hi Nitin,

      So, just very clearly ask supplier to next time have shipping cost shown separately on the invoice.

      You need to work with supplier directly to sort out things like these.

      Andrew

  39. Hello,

    Hoping to get some advice. I am living in Italy with my spouse who is US Military on orders in Italy. We are moving to Japan on US Military orders. While in Italy I have purchased a fair amount of luxury handbags. I have paid VAT here in Italy on all the bags I won. I have never claimed VAT on them because I lived here and wasn’t traveling back to the US anytime after the purchases. I am now gearing up to move again. I was planning on taking all of my bags with me in a carry on suit case. As our household goods are being packed up and sent to Japan by sea. I have just learned about all of these import duties. All of my purchases are well over 90 days old. But most within 2016/2017. Will I have to pay duties on these bags entering Japan? Should I risk having them packed away and sent by shipment from the movers instead? I don’t know anything about these duties. I was under assumption since I was living here legally in Italy and payed full EU price on them that I should be ok. But I honestly don’t have a clue. Any advice/guidance is greatly appreciated. TIA

    1. Andrew Minalto

      Hi Doris,

      I’m sorry but I won’t be able to help you with this…

      I would recommend that you get in touch with the Japanese Customs (try email first) and ask them OR at least try contacting Customs in Italy and see if they can help you clarify rules on such goods movement.

      Andrew

  40. Hi Andrew
    Any idea about import tax on Jewellery bought out of EU and brought into UK for personal use .i read limit is 390£ worth of goods per person . If a family travels together can the allowance be shared .
    I understand it’s 2.5 % flat from 390 to up to 630£. How much duty in items more than 630£ And less than 800£ .

    1. Andrew Minalto

      Hi Sam,

      I’m sorry but with specific questions like these you should contact Customs and ask them for advice/info.

      Thanks,
      Andrew

  41. I’d like to export Plastic Chair and Table (HTS code no: 94037000) directly from China to the USA. What are the import tax and VAT rate in the USA? Thank you.

    1. Andrew Minalto

      Hi Gary,

      Use this online tool to calculate taxes on imports:

      https://www.dutycalculator.com

      Thanks,
      Andrew

  42. I’ve just bought $50 worth of ballet tights from China, they’re for my daughters who both attend dance college, I’ve just had a call from a company called linexsolutions claiming I need to pay £21.05 vat and duty, does this seem right to you?

    1. Andrew Minalto

      Yes, that sounds about right – £10 or so in VAT and import duty and £10 or so for customs clearance service fee.

      1. C morris

        Thank you

  43. Asher Levin

    Hi Andrew,

    Could you explain one thing. I am registered as not liable to pay VAT. I have a non-VAT EORI number. My turnover is way under the 85,000 GBP threshold. Am I correct in thinking that I’m therefore not liable for paying VAT on the goods that I import for resale in the UK? Thanks for the advice.

    1. Andrew Minalto

      Hi Asher,

      Thanks for your comment.

      Sorry, what do you mean by this sentence: “I am registered as not liable to pay VAT”

      Can you please explain that?

      Thanks,
      Andrew

      1. Hi Andrew,

        This is Nick, I happen to have the same question as Asher. Asher and I, are self-employed and our turnover is very low, therefore we don’t need to pay VAT to the HMRC (according to legislation).
        The question is, are we also exempt from paying VAT when we clear the customs?

      2. Andrew Minalto

        Hi Nick,

        No, you’re not.

        You’ll pay VAT when import goods from outside EU, even if you’re not VAT registered.

        Thanks,
        Andrew

  44. Hi Andrew. Thanks for Info on your Website. Can you please direct me where to find out re VAT and Taxes/Duty applicable to bringing in Natural health Supplements to UK for PERSONAL use.
    Many countries (NZ, Australia) have a threshold value (NZ = $400, Aus = $1000) under which there is no GST (VAT) or duty, as it is uneconomic to collect it.
    Is that the case in UK? If not, where do I fing the applicable VAT and Duty rate if any.
    Many thanks
    Les

    1. Andrew Minalto

      Hi Les,

      All the rates are available on this website:

      https://www.gov.uk/trade-tariff

      OR you can use this online calculator to get instant calculations:

      https://www.dutycalculator.com

      Thanks,
      Andrew

      1. Les White

        Hi Andrew. Thanks for answer… Can you advise if there is a threshold at which Govt doesnt collect? Thanks

      2. Andrew Minalto

        Yes there is and the information is in this article, lol

  45. Hi Andrew
    Great post, and one question for you. If I land goods from outside the EU into Switzerland, and pay the vat on landing there, would the goods then be classified as being in the EU (no tax/ vat owing) under EFTA
    Many Thanks

    GJ

    1. Andrew Minalto

      I’m not sure how this works in Switzerland to be honest – you’ll have to do your own research on this.

      Andrew

  46. Dear Andrew

    When i order goods online (particularly through Amazon and Ebay) usually I have absolutely no idea where it is being shipped from. Very often the Item is delivered with the final receipt showing no VAT and no duty. Only when i challenge the supplier for a VAT receipt do I then realise (usually from the poor grammar) that the goods came from outside of the EU. Am I to assume that these goods have entered in under the radar and am I potentially liable if any duty / VAT is owing?

    If this is the case, what is the government doing about it. It must be having a substantial detrimental impact to our own UK retail economy.

    1. Andrew Minalto

      Hi Karl,

      Thanks for your comment.

      This is a very huge topic with many angles – something I won’t be able to cover in this reply.

      If it went through customs without taxes, you don’t have to worry about it – no one will go after you and ask you pay those taxes. This happens millions of times each year.

      Andrew

  47. Thank you for the article. It’s definitely the most explanatory I’ve found.

    If it’s okay with you can I double check I’ve worked this out correctly? I recently bought a vintage dress online & the converted price including shipping (it’s coming from the us to uk) is £300.

    Am I correct in thinking I will have to pay £70-£80 in fees? Plus the £8 handling fee from Royal Mail. I had budgeted for £100 in fees anyway so if I’m correct I’m just relieved it’s less than that.

    Thank you. 🙂

    1. Andrew Minalto

      Yes, you’r correct Maria.

      Usually you can simply use 25% as a ball park figure and it will be quite accurate.

      Thanks,
      Andrew

  48. Hi Andrew

    I’ve read your guide to working out tax however i can’t get my head round it!

    I am hoping to purchase a designer bag from the USA to Uk using eBay.

    the bag is $260 and shipping is $67 and I am not sure about insurance cost, the courier will be UPS,. Could you kindly work out the total tax on this product for me?

    Thanks

    1. Andrew Minalto

      Hi Janine,

      Use this calculator to get exact taxes you’ll have to pay:

      http://www.dutycalculator.com

      Thanks,
      Andrew

  49. Hi,

    I have recently purchased 5 individual items, each below £15 in value from the USA. Each item had its own P&P included in the purchase, but as it was with the same seller (Ebay). They then sent the five items, individually packaged, inside one larger package. I was then charged VAT on the collection of items, whereas if they were sent individually as I paid for, I would have been able to avoid the VAT charges. Am i correct? and am I able to claim the charges back?

    1. Andrew Minalto

      yes, you’re correct.

      But for that shipment you can’t claim anything back as all the items were sent together – as one shipment.

  50. Hi Andrew, great thanks for the article, it has been more helpful than numerous sources I was digging through online

    I am a UK based seller importing the goods from outside the EU, which attracts quite high import taxes (15% duty + 20% VAT)

    If I find out I can’t sell the goods within the UK and decide to re-export them to Japan for example, can I get a refund on import VAT I paid to UK customs (and custom import duty) when initially imported?

    Thank you

    1. Andrew Minalto

      Hi Mila,

      Thanks for your comment.

      I think you can, yes, but I’m not 100% sure as I have never done that. There are rules and time frames in place for this to go through so you better contact HMRC directly and ask them about these specific rules and procedures.

      Thanks,
      Andrew

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