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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. I am a UK Based (VAT registered) service provider. The service I provide to my customers is storage, packaging, shipping and distribution (you can say that I am shipping company, but not a freight forwarder). My customers own the goods and I merely provide a service at their command. Recently a USA based company sent their goods to my UK site. My UK site did not purchase the imported goods, did not cause the import, nor are the imported goods going to be used in my business other than to store these imported goods at my UK site warehouse. My UK site acted as the Importer and paid the VAT. Is there a way to reclaim the VAT paid by my UK site, given that fact that we are not the owner and not going to use the imported goods for our business, nor did we purchase.

    Can my UK site reclaim VAT perhaps as an Input Tax?

    1. Andrew Minalto

      I’m sorry Carlos but I won’t have any advice on such specific situation.

      You should speak with your accountant or HMRC to resolve this.

      Andrew

  2. Hi Andrew
    I ordered some vitamins from USA value 99.99 USD. The parcel was shipped from the Netherlands. Received a grey card stating I needed to pay £24.20 customs charges before they would release the parcel , which I did as needed the vitamins..
    When it arrived the charge sticker stated VAT £16.20 + £8 handling fee.
    I question the VAT charge as it was shipped from a European country. Is this correct??
    Also can they legally withhold your mail?
    Many thanks

    1. Andrew Minalto

      Yes, they can legally withhold the mail until you pay taxes/duty.

      The parcel probably came from the USA but it went through a HUB in Netherlands, hence the confusion.

      But this is very common situation really.

      Andrew

      1. M Furr

        Thanks for that Andrew. Was hoping I could reclaim the money. It’s strange that I have had at least 6 deliveries from the same source but have never had this problem before?
        Many thanks
        M Furr

  3. Peter quinn

    Hi Andrew,
    I am importing a vehicle from singapore which is due to dock in 14 days, I know I have to pay tax and duty which I have worked out with the commodity code but I have no idea when and where I should pay the tax and duty, I have rang everywhere and get no where but I don’t really want to pay a company to sort that side out if it is quite a simple process of filling a few forms and showing my purchase documents at customs.
    Could you please shed and light?

    Kind regards

    Pete

    1. Andrew Minalto

      Hi Pete,

      The shipping company/freight forwarder will contact you when your shipment arrives and then you can discuss with them who does the customs clearance procedure.

      Andrew

  4. Hey, great article as I needed to know how to calculate all the taxes etc…

    Only question I have to ask is that I am buying these three items and wanted to know if I will have to pay customs and duties tax or not:

    Boxing gloves for $99
    Mexican Hand Wraps for $9.99
    Plastic Speed Rope for $9.99

    I get 20% off so I am paying $99.97 and then $68.90 for shipping. In total it says it will come to $166.87. These items are for my own personal use and not for resale. I haven’t fully got my head around all of this hence my question. I hope you can help me 🙂

    1. Andrew Minalto

      Where are you based Aaron?

      1. Aaron B

        I live in England. Shipping will come from the states and i’m not too sure how long it would take to get the package either.

      2. Andrew Minalto

        You’ll have to pay around £30 – £40 or so in taxes on this shipment.

        Andrew

  5. Avni Akdeniz

    Hi Andrew,

    So far, I have benefited many times from your website. Therefore, I would like to send my special thanks first of all.

    And… Of course I would like to ask a question. I will be very pleased if you answer and give an advice.

    I have set up a new company which is not VAT registered, aiming to sell some products on Amazon. I import my items from non-eu countries, especially from Turkey. When the items arrive at the UK customs, I pay import duty and import VAT and then I can sell them in the UK. (Some products are free from import duty due to the Customs Union Aggreement btw Turkey & EU Countries. In that case, only the import VAT is payable for me.)

    In this classical trade, my supplier sends the goods with the invoice prepared to my company’s name and address. I sell those goods and dispach to my customers adding my profit on my costs. Hence, my selling price is naturally different from my buying price.

    In the case below:

    On Amazon, I would like to list some new products that are not exist in my inventory (like a dropshipper) and get them dispatched directly from my supplier in Turkey to my customer in the UK.

    In this example, I am the seller in the UK; my supplier in Turkey (non-eu country) is the sender of the product and my customer in the UK is the buyer. Items will be sent via carriers such as DHL, UPS, Fedex, TNT, etc.

    I do not want the items to be dispached as gift or as sample to my customers. But I do not want my customers to deal with customs transactions, either.

    My questions are;

    1- How can I pay my import VAT and import duty (if any) in such a case?

    2- How can I send the invoice to my customer? Because I will prepare the invoice for the items sold. The seller is me not my supplier (not like in a dropshiping).

    3- My supplier has to send a copy of the invoice with the product (customs need to see it to calculate the taxes) but that invoice should not go with the product to the customer. How can I arrange it?

    4- And of course, the invoice sent by my supplier should have been prepared to my company name (so I can re-sell it as the importer) not to the name of the customer. But on the other hand, the item should have been sent to the name and the address of the customer. (Who is the importer from the customs’ point of view?) What would you do if you were a customs officer with such a package (different buyer name and a delivery address on it and an invoice prepared for a different name and address)?

    Many thanks in advance,

    Kind Regards,

    1. Matt Bryan

      Hi Avni, this can be done but you will need to provide the UK clearance agent with a manifest (in addition to the shipping invoice) showing a breakdown of each individual package, what it contains and who it is consigned to. The shipping invoice will need to show the Turkish supplier as the exporter and your company as the importer. The UK customers do not need to see this – it only need to be provided to the UK clearance agent. The individual packages themselves can have your own invoices attached to the boxes showing you as the seller/shipper and the UK consignee as the delivery address.

      For customs purposes you will still need to be declared as the importer and pay any VAT and Duty against the whole consignment. If you are VAT-registered then you can reclaim the VAT element on your C79 VAT return form, otherwise you cannot do so. I suggest however that you contact a customs broker to confirm the above as Andrew has suggested.

      Best Regards,
      Matt.

    2. Andrew Minalto

      Hi Avni,

      Thanks for your comment.

      I’m sorry but I won’t be able to give advice on this as I haven’t personally done this scheme.

      You’ll probably want to consult a customs broker or courier company to find out ways you can set this up.

      Andrew

  6. AJ McNulty

    Andrew

    Firstly, great article. It’s cleared some of the fog 🙂

    OK, so I’ve got my 10 tennis rackets and paid £862.59 for them including import and VAT.
    I then sell my 10 tennis rackets to Andy Murray for £1000. Do I then have to pay £200 VAT on the full sale of the goods or just on the £137.41 profit I’ve made as presumably I’ve already paid the VAT owing on the goods themselves.
    I’m new to this being recently VAT registered and its giving me brain ache 🙁

    Thanks
    AJ

    1. Andrew Minalto

      Hi AJ,

      Thanks for your comment.

      Mind asking – why did you register for VAT if you have just started selling now?

      In general, you pay government the difference you pay and get in VAT.

      For example – if you paid £100 in VAT when importing goods and got £200 in VAT when you sold your items, you would pay £100 to government in VAT.

      So it’s the difference on what you pay and what you get when sell goods. But it’s not related to profit in any way.

      Thanks,
      Andrew

      1. Andrew

        I’ve been selling about 8 months now and have just crossed the VAT threshold.
        As I’m now having to account for VAT, and have been struggling to get my head around the import side of things so I can record what I’ve paid and what I owe in VAT accurately, I was ready to give up on the whole idea of importing goods.

        This makes things much clearer

        Cheers
        AJ

  7. Thank you for this article, it’s very helpful.

    I have recently paid VAT on importing an item from China. However, I need to return the item for either an exchange or refund. How would you suggest I sort out the VAT in this instance?

    1. Andrew Minalto

      Hi Edward,

      Please contact HMRC and they will supply you with necessary forms for this procedure.

      Thanks,
      Andrew

  8. how much tax or duty would have to be paid in the UK on a pair of designer boots for a 3 year old child , cost is in the region of £325 ( 375 euros ) to buy from a EU country , they are for personal use not for resale

    1. Andrew Minalto

      Hi Henry,

      If you buy from a EU based seller, you won’t have to pay any extra taxes on this.

      Thanks,
      Andrew

  9. Hi Andrew,

    Thanks for your wonderful posts. I import goods from China and sell on the UK market. I have had customers telling me that my UK competitors import bulk goods directly for them using customers own buyer business/personal details instead of the supplier details such that goods are delivered directly to buyers from China therefore UK supplier does not charge Vat to customers, making him 20% cheaper than other suppliers; is this legal? Please advise as customers are now going to this supplier as his goods are much cheaper since he imports directly for customers and ship directly to customers from abroad, hence he does not charge vat to them. Please advise

    1. Andrew Minalto

      Hi Joe,

      If the goods are under the threshold value, then yes – this is legit (as far as I know but maybe I’m wrong as this really depends on how the seller has created the legal/company structure to support such operation).

      Andrew

      1. Thanks Andrew,

        Thanks for your response, the goods are from £5000 to £9000; is this within the threshold

      2. Andrew Minalto

        No, of course not.

        That’s way too high value to not pay any taxes on such imports.

        Andrew

  10. I see this post is a few years old, but see if I get an answer.

    I sell on ebay, and have a customer in the UK. He sent me this message recently:

    “Hi Dan I have yet again to pay customs duty and handling charge for items amounting to nealy £20 if these are paid by you and added to postage it would be about $2 . I am not happy as this makes my purchase very expensive .”

    I have no idea what he is talking about. What does he mean I can add an amount to postage for $2.00? Can you shed some light maybe?

    1. Andrew Minalto

      Not sure what he means Dan…

      It could be that customer is asking to put lower value on Customs declaration to avoid paying import duty/VAT?

      That is if you’re based OUTSIDE the EU and sell to customers in the UK.

      Andrew

  11. Cathy MacLeod

    Hi Andrew
    I’m struggling with the whole gift thing at the moment. My brother and his friends are artists. They have sent me some artwork they made as a gift. So they where never purchased. What is the best way forward if my brother or myself can not produce a receipt or prof of purchase for something we made that is not intended for sale and that was never sold in the first place?

    1. Andrew Minalto

      Hi Cathy,

      I’m sorry but I don’t know the answer to this question.

      You should probably contact Customs directly and find out best way to do this.

      I haven’t done this myself so can’t offer any advice.

      Andrew

  12. Hi mate i want to import a trike axle kit from the USA total cost with shipping is about £2000 would i pay any taxes on that cheers

    1. Andrew Minalto

      Hi Tony,

      Yes, approximately £500 in VAT and import duty.

      Thanks,
      Andrew

  13. I brought something from Amazon.com the American site that totaled to £35 it has been at Heathrow customs since the 2nd of November on the tracking system it says “consignee contacted for payment” does this mean that I won’t receive my parce and it won’t be delivered to my adress unless I pay? Please help

    1. Andrew Minalto

      Hi Tyra,

      Please call the shipping company and ask for status of your shipment.

      It could be that they don’t have your email/phone number and can’t contact you.

      Andrew

  14. Hello, I buy something from China for $1700, my package is being on held by customs from 1/11 and on 7/11 I finally received letter from FedEx asking me to pay duty & tax invoice but only £101.70, my seller marked my packed as only 500$ well good for me. I paid that same day calling FedEx and paid by my debit card at 4pm, but even now my package is still with customs and I still didn’t even see any new scan on tracking info.

    Is anybody know how long normaly takes to release your package from customs after you paid for duty & tax?

    Thanks.

    1. Andrew Minalto

      Hi David,

      Usually it’s 1-2 days but sometimes there are delays.

      Your best bet is to simply call FedEx and find out the status of your shipment.

      Andrew

  15. Hi Andrew
    I bought some mats from China and paid $400 for them. These are quite heavy items. Seller invoiced it very low ($40)without informing me. Now TNT is asking me is this right value or should it be a higher value? I am really concerned what to do. My supplier has not replied me yet.
    Please advise.
    Regards

    1. Andrew Minalto

      Hi Wab,

      You should tell courier that it’s not the real value.

      Send them invoice/payment proof so they can calculate taxes correctly on $400 amount.

      Don’t worry, you’re not in trouble here – Chinese sellers do this all the time:

      http://andrewminalto.com/shipment-without-customs/

      Thanks,
      Andrew

  16. Linda Kriegbaum

    I bought a small leather doll purse on Etsy from France and paid under 25.00 including postage. Do I have to pay any additional custom/vat fees on this purchase?
    Linda

    1. Andrew Minalto

      Hi Linda,

      No, of course not.

      There’s no VAT/import duty applied when goods are moved within EU countries.

      Andrew

  17. Hello I am looking to go abroad outside EU and buy £15000 in gold to bring back to sell, from what I understand from you is I would have to pay only 20% of £15000 and not the value I would get for selling it over here so it would be on the purchase price and no import duty, is that correct?

    1. Andrew Minalto

      Hi Cara,

      Yes, you pay VAT and import duty on the PURCHASE price, not re-sale value.

      Thanks,
      Andrew

      1. Thanks Andrew and do you pay the VAT at the country your leaving or the destination country, how does this work?

      2. Andrew Minalto

        Destination country.

  18. Hi
    I imported some stuff from China through Air Cargo. I believe my agent is charging me a lot extra for custom and VAT. He has not provided any official document. Is there anyway i can check actual amount with HMRC?
    Regards

    1. Andrew Minalto

      Hi Nabs,

      VAT is 20%.

      Import duty varies based on product you import. Check out this guide for more info on how to calculate import taxes:

      http://andrewminalto.com/import-taxes/

      Thanks,
      Andrew

  19. Hi Andrew,

    The HMRC guidelines on duty/VAT calculation state:

    “The following items may be left out of the customs value:

    (a) Delivery costs within the EC. If the seller’s or carrier’s charge covers delivery beyond the EC border you may deduct the additional charges for such delivery, providing they are shown separately from the price paid or payable for the goods. ”

    Therefore, if your FF can break down the quotation to show the delivery costs to your final delivery via UK haulage, then I believe this can be deducted from the customs value that will incur VAT and duty % fees.

    Regards
    Martin

    1. Andrew Minalto

      Hi Martin,

      Yes, that’s correct.

      Andrew

  20. Hello Andrew, it was a great pleasure to read your web site(s) and see how much energy and helpfulness you have, thank you very much ! Please to help me with a question related to VAT Tax. I live between UK and The Middle East having properties in both locations and a Residence Visa in the Middle East, and a British Passport Holder. I recently made a purchase here in London of some new golf clubs that I wish to take with me out of the Country and leave my old set of clubs that I brought with me here in UK. However, I may decide to bring the new clubs back to UK after some years when the old ones I left here are needing replacing. So my question is to you, is this possible after claiming back VAT when I take them out of UK, and if so, how long must they ‘be out of the UK’ before I choose to bring them back to the UK ? Thank you Andrew.

    1. Andrew Minalto

      Unfortunately I can’t help with such specific questions…

      Please contact Customs and ask them for advice.

      Thanks,
      Andrew

  21. Sarah Whittaker

    Hi Andrew
    I recently purchased £2300 of goods from Taiwan, and dutifully paid VAT on them. The items turned out to be faulty and I had to send some back to Taiwan for testing – and the factory then agreed to refund me the £2300 I paid them. I am still largely out of pocket due to VAT and duty. I contacted the company I used to import and they say that HMRC have said I should claim the VAT back on my return, but I am not VAT registered. Is there a way I can get VAT or duty paid back on these useless items?

    1. Andrew Minalto

      Hi Sarah,

      Not sure about import duty but I know that you can claim VAT back, yes (doesn’t matter if you’re not VAT registered).

      You need to contact HMRC and they will inform you on next steps.

      Thanks,
      Andrew

  22. Hi Andrew.

    Thank you for the good read. I am a manufacturer and retailer (in charge of the entire value chain) and I will be going to the UK for a trade show. So I am bringing in the products myself, that I myself will be selling. What will the appropriate value be in my case? Do I factor the cost price of my product or do I factor the price I give to my retailers?

    example:

    My cost: 10 pounds

    Price to retailers: 20 pounds

    Price to end customer: 40 pounds

    Hope you are able to help xx

    1. Andrew Minalto

      Hi Helen,

      Hmm, I’m not sure to be honest how it works in a situation like this.

      But I think it’s your cost/value you will have to declare (10 pounds).

      You may want to write an email to HMRC to be 100% sure on this.

      Thanks,
      Andrew

  23. Hi thanks for the informative article, I have a question.

    I am looking to import watches from China to the UK ordering around 100 of each type. Each watch costs on average £1 but I intend to sell each item for £10. There is FREE shipping

    1. Say I order 100 watches at £1 each Will I be liable for import duty and VAT on the price I pay or the price that I can sell them for?

    2. Am I correct in thinking it would be 20% VAT + 4.5% Import Duty?

    3. Would it be therefore more beneficial for me to import £15 of watches per order (as shipping is free anyway) to avoid VAT and Duty?

    1. Andrew Minalto

      1) ON the price you pay, yes (NOT the re-sale value).

      2) Yes, correct.

      3) I don’t think thats technically legal, splitting your order in smaller sizes like this.

  24. Hi Andrew, I recently purchased some items from Aliexpress the total cost around £120, so expecting VAT import duty to pay on arrival. On arrival it was delivered via UK Royal Mail, with no customs form sticker on package as is usual when purchasing from Aliexpress. Also the return address on parcel is for an address in the UK. Everything on the parcel suggests it was sent from in the UK, is this something you have come across before? And does it mean I don’t need to worry about import charges in this scenario?

    Thanks

    1. Andrew Minalto

      Hi Chris,

      Yes, thats very possible. Many Ali Express sellers use UK based warehouses now.

      Andrew

  25. michael lane

    Hi Andrew, I left my phone in Lanzarote at the check in (in Basket), on the way home, didn’t realise till was back in UK, it was handed into their lost property, I have paid UPS to collect and return to my sons place of work as he sorted it out for me. The phone has now been shipped back but Customs are asking for payment, (maybe because it was going to an business address?) the documentation states
    the phone is worth 200Euros. Will I have to pay as this is my personal phone which was on contract from Vodafone which I took on holiday with me??
    regards Mike

    1. Andrew Minalto

      Hi Mike,

      I don’t really know how situations like these are handled.

      You better call Customs and explain them in detail what happened and see what they say.

      Andrew

  26. Hi Andrew, what happens if you tell the Chinese seller to declare the correct customs value but they don’t? Can one pay the correct import tax afterwards? And what would you recommend to remedy this? Not saying this has happened to me but i am aware from some friends they regulary do this and its quite difficult to make them stop.

    1. Andrew Minalto

      Hi Michael,

      This happens quite often, yes.

      Personally I always (in case of expecting a courier shipment) inform courier company in advance that the shipment needs to go through Customs and send them REAL invoice before package arrives.

      But if it does slip through, there’s a special form you need to fill out from Customs to sort this out and pay taxes.

      Andrew

      1. Michael

        Thanks for your reply.

        What is this form called and where can i access?

        Do customs tend to frown on this and add extra charges in your experience?

      2. Andrew Minalto

        I will do a more in depth post on this issue very soon on my blog.

        Thanks,
        Andrew

      3. Michael Oladipo

        okay thanks. Do you know what the name of the form is?

      4. Andrew Minalto

        Check out this post:

        http://andrewminalto.com/shipment-without-customs/

  27. Hey Andrew,

    As mentioned in your other blog. I was wondering if Brexit would affect the VAT & import duty at all?

    Thanks for the great posts!

    Best Regards,

    Matt

    1. Andrew Minalto

      Hi Matt,

      I will have a Brexit article on my blog tomorrow.

      As for VAT & import duty on imports from EU countries – it depends on what kind of agreement will be in place, we don’t really know any details on this right now.

      Thanks,
      Andrew

  28. Hello.
    You said they ask for proof..
    I bought that guitar many years ago and i dont have any proof of the purchase i made probably 4 or 5 years ago? Means they don’t let me get it? What are other ways of proving the value?

    1. Andrew Minalto

      I’m not sure Jack, I have never been faced with a situation like this.

      You should simply call Customs and ask for advice there.

      Andrew

  29. Hello i would really appreaciate if you could help me. Im receiving a used guitar that worths 5000 us dollar in uk. That means i have to pay 1000$ for cutoms? Anyway to lower the price?

    1. Andrew Minalto

      Hi Jack,

      Yes, you’ll have to pay VAT & import duty on that purchase, even if it’s a used item.

      Customs will ask you for proof of purchase, proof of payment to confirm the value of the item.

      Andrew

  30. Andreea Rumsby

    Hey, i’ve been searching for answers for days now and still no luck. Will try my best to explain my situation…

    Basically I live in the uk , However I want to sell to the US for the moment and would like to dropship from china (would be mainly using aliexpress).

    Does the wavering of any vat and custom duty work out the same here…

    i.e as long as it’s under £15 for no vat charges and under £135 for no duty charge??

    1. Andrew Minalto

      Hi Andreea,

      No, in this situation you have to look @ rules in the US, not UK.

      Here’s more info on taxes, thresholds on imports in the US:

      https://www.cbp.gov/trade/basic-import-export/internet-purchases

      Thanks,
      Andrew

  31. Hi Andrew,

    I have another question. We are trying to import goods from China to UK. The sales agent is based in a country other than China and UK. The sales agent was able to provide us good discounts but in return a % commission of the total value of the order. Do we have to pay duty and VAT on that commission as well?

    Thanking in advance,
    Raza

    1. Andrew Minalto

      Hi Raza,

      No, you don’t have to as you’ll basically pay separately to them. It will be a service invoice.

      Andrew

  32. Hi Andrew,

    If the supplier from China is offering free shipment and mentioned on the invoice. Does customs would ask to declare shipment cost separately to calculate import duty and VAT? Either way the duty and VAT should remain the same. Or am I miss8my something?

    Thanks

    1. Andrew Minalto

      Hi Raza,

      I believe it can be free shipping, yes, as VAT stays same AND actually you’re paying more in import duty (as normally import duty would be calculated on product cost only, without shipping). So if you don’t declare shipping costs separately, you pay import duty on whole amount, including the shipping charge.

      So it’s always advisable to have shipping costs shown separately on your invoices.

      Thanks,
      Andrew

      1. Hi Andrew,

        Thanks for your reply. I actually got confused from the below text from this link https://www.gov.uk/goods-sent-from-abroad/tax-and-duty. It says that the value includes postage and packing.

        Customs Duty
        You’ll be charged Customs Duty on gifts and other goods sent from outside the EU if they’re above a certain value, unless the duty comes to less than £7.

        The value includes:
        the price paid for the goods
        postage, packaging and insurance

        Thanks,
        Raza

  33. My apologies if already asked, there is a long trail below.
    I’d like to bring in goods on my person. Specifically gemstones, they are small and valuable and I feel better to keep them with me rather than courier them as the services in the areas I travel in are not reliable. These are customs exempt, but VAT is due. Value is usually 1-2K per trip.
    Unlike other countries where you just go to the customs desk at the airport (e.g. Switzerland) and pay, UK customs seem to have no sensible way to deal with this.
    On arrival, often there is often no one there at customs and if you call them on the red phone, they treat you as if you are insane to be declaring anything voluntarily.
    Is there any practical way to deal with this other than paying a broker several hundred pounds to meet me at the airport, which simply isn’t cost-effective at the level I am bringing stuff in?
    Many Thanks in advance.

  34. Hi Andrew,

    Great article! Maybe you could advise me on a related matter?

    I would like to start a marketplace for overseas retailers to advertise and sell their goods in the UK. I have seen that some couriers allow sellers to pay the UK custom and VAT charges which would be ideal as it would mean that buyers are not surprised with these extra costs once their purchases arrive in the country.

    So for example, if the seller wishes to sell a product for £150 (inc. delivery and insurance) with 2% customs duty, 20% VAT and £10 handling fee, the seller would have to add an additional £43.60 to the desired £150 retail price to cover these charges. The advertised retail price on the marketplace would therefore be £193.60.

    My question is can the seller still declare a goods value of £150 to customs despite selling for £193.60?

    If the seller is legally obliged to declare a value of £193.60, with the same charges they will pay more out (£53.37) and ultimately end up with less than the £150 that they desire.

    Hopefully you can shed some more light.

    Many thanks.

    1. Andrew Minalto

      Hi Chris,

      Thanks for your comment.

      This is quote specific situation so I don’t know really how this could be done, properly anyway.

      eBay & Amazon does this but they have special agreements in place with courier companies. I’m sure that sellers can and do declare the actual cost (£150 in your example) but I don’t really know how this is set-up from legal/law point of view.

      Thanks,
      Andrew

      1. Thanks Andrew. Your comment about eBay led me to Pitney Bowes website and it appears they offer a global shipping solution to all online marketplaces. It could be expensive but certainly worth looking into.

        I appreciate you taking the time to reply.

        Chris

  35. Andrew,

    Thank you for your post.

    You are suggesting us not to register VAT if the sales under the threshold.

    Yes it is correct if the cost of the item is low.
    But what if the cost of the item is high? If we declare the cost high, the sales VAT will equals as the import VAT, or may lower than the import VAT. It is because the import VAT is mainly affected by the FOB price.

    1. Andrew Minalto

      Hi Ken,

      It does not make difference – in terms that – you’ll be out of pocket more if you’re VAT registered. Yes, difference with small margins will be smaller but still – you’ll pay more in tax.

      And no, import VAT is NOT calculated on FOB price. It’s calculated on product price + shipping + import duty value.

      Andrew

  36. Hi,
    Really useful – thanks. Possibly a daft question, but I will ask anyway, but if VAT registered, is the VAT paid on import then be offset (deducted) in arriving at the amount due for quarterly VAT return (ie the usual OUTPUT tax less INPUT Tax) ?

    So I am in effect just paying some VAT in advance ?, and the final cost of goods does not really include the VAT element. Make sense ?
    Thanks

    1. Andrew Minalto

      Hi Andy,

      Yes, correct.

      Andrew

  37. Hi Andrew. i am thinking of purchasing 16gb RAM from Ebay America for my Apple Macbook as it is quite a bit cheaper than here in the uk. The cost of the RAM is $60 + $11 postage. What extra taxes and duties will i have to pay in total. Thanks

    1. Andrew Minalto

      Hi James,

      You’ll have to pay VAT @ 20%.

      Import duty for this product is 0%.

      So basically it’s just 20% + small customs clearance fee (usually £10-£20, depending on carrier).

      Thanks,
      Andrew

  38. Hi, I would like to buy scarves from China, which are labelled ‘made in China’. I would like to either ask can. I ask them to add my label, or can I legally add my own brand label, and resell them I am hoping to ask the suppliers to only sell to m e these particular designs.
    The have bought samples, and they are good quality and are very reasonable. I want to add smart Packaging and additional labelling, is there anything else I need, or anything I need to be aware of. The average value of each order will be under £200.
    Very many thanks
    P.j

    1. Andrew Minalto

      Yes, of course you can do that!

      Ideally ask supplier to add your own labels/tags as it will be cheaper to do in China.

      But if that’s not possible, you can do it on your own, it’s perfectly fine.

      Thanks,
      Andrew

  39. Katherine B

    Hi Andrew

    Something just to check please as it is never stated online properly and I just want to be sure.

    I understand importing into the UK over £15 limit one gets taxed for the goods and postage.

    But what exactly makes up to the £15 limit? Is that goods alone, or goods and postage. I would just like to be clear as I’m about to start ordering world wide in small amounts.

    Many thanks
    Katherine

    1. Andrew Minalto

      Hi Katherine,

      I think it’s goods + shipping, yes.

      Andrew

      1. Katherine B

        HI Andrew – you think….

        I need to find out exactly and it’s really hard to do so. I did once read that it was the value of the item under £15, then over £15 the value of the item plus the shipping. But everyone seems to be so vague and never defines things precisely

      2. Andrew Minalto

        Hi Katherine.

        Why don’t you simply call HMRC and ask?

        Sorry, I just don’t deal with such small shipments and don’t know how they calculate this.

        Andrew

  40. You mention that books are exempt from import duties. Do you have an official source for this? I know that imported books are VAT exempt but I could not find anything official about the import duties.

    I plan to import about £1,000 worth of encyclopedias from Canada to UK. Thanks.

    1. Andrew Minalto

      Hi Bob,

      Books are exempt from VAT & import duty.

      You can find this info on the HMRC website. More info here:

      http://andrewminalto.com/import-taxes/

      Thanks,
      Andrew

  41. we want to ask you regarding some clearification of claim received from insurance co.

    we hae received material from Germany,Out of full consignment same material go damaged

    during transit.We have put claim on insurance co. They have arranged survey of the damaged material

    and agreed to settle our claim.While settling the same they have informed us that they will give claim on

    basic value and will not consider duties and taxes(custom duty excise and octroi ) paid by us to clear the

    material..Duties and taxes comes to about 30%of basic value.

    I feel what they say is not logical.

    PL GUIDE ME IN THIS MATTER

    1. Andrew Minalto

      This is really between you and the insurance company – what cover amount you have paid for, what are terms etc.

      Not much I can help with.

      Sorry,
      Andrew

  42. steve kelly

    Hi Andrew
    I am importing a kinetic log splitter from China for $1100
    I was quoted $160 to ship. Now I am expected to pay another $549

    Terminal Handling USD 96.00
    Documentation USD 101.00
    Port security fee USD 8.00
    Customs clearance fee USD100.00
    Delivery to door USD 220.00
    Roe Surcharge USD 24.00

    Total: 549 USD

    I guess ill be charged import duty and 20% VAt on $1649?

    Is this all above board what I have to pay?
    Thanks Steve

    1. Andrew Minalto

      Hi Steve,

      Yes, this is all correct.

      Chinese suppliers usually just give shipping price to your nearest port, without all these extra charges.

      That’s why I always recommend using a freight company who can give you Door to Door quote, which will cover EVERYTHING.

      The VAT won’t be on full amount though as VAT is payable on all costs/product price until it enters UK (so for example local delivery to your door will be exempt from this).

      Andrew

  43. […] have just read your article on VAT and import taxes when buying goods from China and have a couple of […]

  44. Hi I’m intending to purchase gold from an online respected site based in Dubai, I noticed in the last few months the prices of gold in this site has tripled I mentioned to them once if I will be charged tax & I think this had been added to their prices, Do you charge tax for buying gold for personal use from UAE? Please get in touch ASAP? Is there a minimum or maximum spend allowed? Thank you

    1. Andrew Minalto

      Hi Cathy,

      From what I know, there’s no import duty to be paid on imported gold (rate is 0%) BUT you’ll have to pay standard VAT rate @ 20%.

      Thanks,
      Andrew

  45. Hi Andrew

    What a great post, really summed it all up very clearly! I am looking to import for the first time and have been reading around and your post was by far the most succinct and well-explained. Bravo!

    One related question I have is I am wondering if it is any different if I am actually producing my own products in the country from which I import from (ie. I am not purchasing the products as made, but rather buying various materials, making the items, then importing them – all materials sourced and product build is in that same country). How would I calculate the unit price in this instance? Would I use the cost price? And if so, would I need to submit anything like the full list of materials used to specify how the cost price is derived?

    I was also wondering if say I decide to use some materials from various countries, which are then sent to the country that I import the final product from (where it is all put together). Would that affect the import duty fee or VAT if the materials come from various places?

    Cheers!
    Dave

    1. Andrew Minalto

      Hi Dave,

      Who would “build” these items for you? Your own company or supplier/manufacturer?

      Andrew

      1. Thanks for the quick reply Andrew.

        Initially I would use specialist tradesmen (so essentially another person/business) for the initial order/s, but provide them with all the materials to make the product. So the other business is only for the skilled labour/production.

        If sales were to go well I would then look to set up my own company there bring all of it within that same company, if it makes more financial sense to do so. The reason I do not intend to do this from the start is because I do not have many orders currently, but if it does come through then I would be happy to set up there.

        Is there any benefit/preferential to either of these (having company based there vs using other business for part/production)?

        Thanks!

      2. Andrew Minalto

        Hi Dave,

        To be honest I have never done anything like this, so don’t know for sure how this all works out tax wise…

        But it would only make sense that you provide all invoices for materials + invoice from last/final supplier who assembles units and pay import duty & VAT on that amount – final cost per item.

        With your own company in China, things get more complex and you should probably consult an accountant for best set–ups tax wise.

        Andrew

  46. Hi,
    I send back the goods to US after few days coz i wasn’t happy with the product but I receive letters and mails from dhl telling me to pay duty and tax because has already delivered
    Why I have to pay duty and tax for something I send it back already?
    Please tell me what to do
    Oliver

    1. Andrew Minalto

      Hi Oliver,

      You need to ask this DHL – maybe you can provide proof that you have sent these goods back and don’t have to pay taxes.

      Andrew

  47. Hi,
    I have some damaged items of a large value to return to China and will have to send them in an container. As they are faulty I would not of imagines i would have to pay customs charges in China as I already paid when they entered the UK. As they are returns should I have to pay?

    1. Andrew Minalto

      Hi Lisa,

      No, you shouldn’t have to pay if all documentation is correct.

      Please consult with your shipping/freight company and ask them for correct procedure.

      Andrew

  48. Hi,

    I’m importing a computer into the UK from outside the EU. Its not a new computer but a used one (used by me). I am a full time student studying in the UK and will need it for study purposes however I will have to courier it to myself because of its size. Will I have to pay any tax/duty on import? Its approx 1000 pounds in value.

    1. Andrew Minalto

      Hi Karan,

      Yes, from what I know you’ll have to pay VAT/import duty if you ship it via courier.

      Andrew

  49. Hi Andrew,

    Just wonder my friends posted me something from Hong Kong that value is higher that £15, however, no one ask me to pay for duty or VAT. Do I have to report it?

    Thanks.

    1. Andrew Minalto

      No, you don’t! 🙂

  50. Hi Andrew I want to buy a batman Batmobile from hong kong the cost of it on ebay is 385 pounds and it is a large package. Will I’ll i be paying any duties and taxes if so how much do you think because I tried the duty calculator dint have exact matches for the Batmobile the duty calculator also says there is no taxes or duty to be paid if getting things from hong kong is that right.also will it be cheaper in taxes and duties if I get the same thing in from Malaysia because it is the same price there.
    Thanks

    1. Andrew Minalto

      Hi Rita,

      It will be roughly 25% in taxes on top of what you pay to supplier.

      There’s no difference between China and Malaysia – if you’re UK based, taxes are same for imports from outside EU.

      Andrew

      1. Thanks andrew

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