1. Home
  2. /
  3. Blog
  4. /
  5. Importing
  6. /
  7. Import Duty & VAT...

Import Duty & VAT Threshold on Imported Goods

August 4, 2014 by Andrew Minalto - 605 Comments
Spread the love

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:


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,

Spread the love
Join 500+ Amazon Sharks Members
and Start your OWN Amazon FBA Business TODAY!

Other Similar Articles To Help You Take Your Online Business Elsewhere

Other Similar Articles About Importing

Click Here to Leave a Comment

  1. Hi Andrew:
    Thank you for all your great info.
    We are starting to export USA made apparel/ goods to the UK and other EU countries. Our products would be higher priced and not under the value limit for free entry. I have a few questions:
    1. We would be selling to retailers in the UK/EU and in turn they will sell to their customers. If we use UPS as a shipper would we show our “Cost” price” or “Wholesale price as charged to retailer” for VAT and Duties calculation purposes?
    2. We are also thinking to possibly use a fulfillment center somewhere in the UK/EU. I don’t believe there is an Duty-fee/VAT-free area in the UK/EU (there is in the USA and the duty is charged only when the goods leave the fulfillment center). The VAT differs from country to county (about 19 to 22+%). If the fulfillment center is in an EU country with higher VAT then we would need to pay the VAT in advance for the fulfillment center to accept the goods and the VAT charged would be based on the location country of the fulfillment center. Once the VAT is paid, the goods can move within the EU, but it seems best to pay the lowest VAT? Does this make sense?
    3. Is there any suggestion regarding alternate location for a fulfillment center to not have to pre-pay the VAT (therefore the VAT would be paid directly by the purchasing retailer based on his country’s VAT rate) ? If we use one in Switzerland, which is not part of EU, would this be a possibility?
    Thank you in advance for your assistance!

    1. Andrew Minalto

      Hi Nick,

      1) You would put your wholesale price on customs declaration – same as on customer’s invoice.

      2) Yes, that is correct. But you have to look @ FFH pricing and location as for example – if your main market will be UK, you would want to use a UK based FFH for quick/cheap delivery to customers. (Even if VAT rate is one or two percent higher than in other EU country).

      3) I can’t see any alternatives to this really. Unless you just keep stock in the US and send to customers from there.


  2. Mark Shelton


    I imported an astronomical telescope mount from the USA. I paid all import duty & taxes to UPS.

    Nearly one year later the mount had a manufacturing fault that required the mount to be shipped back to the USA. This was fixed free of charge by the manufacturer.

    On the outgoing documentation for the mount I filled out the customs declaration stating that this was a none chargeable warranty repair & I gave all details of the original consignment notes & paid invoice details for the duty & VAT. The return was handling by an agent who shipped the mount back via DHL.

    The manufacturer shipped the mount back to me by UPS & accidentally put a cost of $1000 US on there export documentation. I reluctantly paid the VAT & DUTY to UPS to get the mount released otherwise I would have had to have refused the shipment & landed in no mans land.

    £ weeks later I get an additional invoice for £1600.00 from UPS saying the the original shipment was undervalued. I refused to pay a third time for obvious reasons. UPS are now threatening legal action & despite going to my own solicitor I’m not convinced that he truly knows the position I’m in.

    Whilst I understand the onus is on the importer I feel I’ve not been negligent as I declared the full facts in my outgoing repair.

    Would you know where I stand with this-The issue is worrying me very much.

    1. Andrew Minalto

      I’m sorry Mark but I have no experience with situations like these so unfortunately can’t give you any advice….

      £1600 in taxes – that doesn’t sound right at all though! Where did they get the value, such high?

      And as you haven’t signed/approved this, I don’t think they can legally do anything about this?


  3. Hi,

    Thank you for all the information. I am starting a very small business…

    “VAT is not charged if:

    the FOB value, i.e. the value of the goods excluding shipping and insurance cost, does not exceed £15”

    If I sent goods in packages less than £15 at a time, but sent many packages, could I avoid the 20% VAT charge? And would it matter if I sent many packages in a year?

    Thanks again

    1. Andrew Minalto

      Yes, if you send them in multiple, individual shipments, you could avoid paying VAT on such cheap, low value items.

      No, it doesn’t matter how many packages you send in a year.


  4. Hi Andrew

    Have a basic question regarding an online item i bought from PA USA
    The item cost £31 & shipping £41 (nearest exchange rates at the time)
    Note the item weighs 1800grams but the box is bulky (model airplane kit) although i had a scimilar item as a gift from my sister that only cost.£17.20 to ship???
    Ny parcel was held at customs for 5 working days so including PARCEL FORCE worldwide handling fee of £8…. total in fees 1£18.70….. Is £10.70 the correct amount on this item or am i missing sonetging here??


    1. Andrew Minalto

      Hard to say how exactly they calculated it but it sounds about right, yes, if not less what it should actually be.

  5. Hi Andrew,

    I had a question about non-business gifts or shipping personal belongings. I had my parents in the US ship some items of mine to the UK where I am studying. Now the package was marked as gift from the postal office and my items included clothes and my laptop so they were expensive.

    I had to pay a large fee due to the UK VAT customs fee, though we were unaware I would have to do so. Is this valid? Would I be able to claim a refund somehow?


    1. Andrew Minalto

      yes, unfortunately that’s how it works…

      Even if they’re gifts or personal belongings, if the value is over certain limit, you have to pay taxes when send in such goods in the EU.


  6. Adrian Sherwood

    Hi Andrew,

    Thanks for this helpful article.

    Could you please tell me, if I purchase a product from the US to get it shipped to the UK then whether I need to pay UK VAT or the US VAT or both UK and US VAT charges?

    Many thanks in advance.

    1. Andrew Minalto

      ONLY UK VAT of course.


      1. Adrian Sherwood

        Hi Andrew,

        Thanks a lot

        That was very helpful 🙂

      2. Andrew Minalto

        You’re welcome! 🙂

  7. Hi,

    I’m hoping to have a fairly large and expensive unmade movie prop kit shipped from the USA to the UK, it is from a friend and is for my own use.

    I know I am going to have to pay VAT on the value of the item, the combined postage/insurance and any Duty incurred.

    I see by looking online if it is labelled correctly (i.e.as listed on an import website: The import duty rate for importing Movie Prop into United Kingdom is 0% , the import VAT is 5%, when classified under Antiques, Art & Collectibles → Collectibles → Collectible of historic / cultural interest with HS commodity code 9705.00.0090. Additional taxes apply: , , , , , , , , , . ) then the import duty may be 0% rated and the UK VAT rate reduced to 5%.

    Is that correct, if so how does one advise the USA sender to best label the package?

    Given the value of the item and shipping combined comes in just shy of $3,000 I’d like to get my % charges as low as possible!

    All advice appreciated in advance. – Andy.

    1. Andrew Minalto

      Hi Andy,

      You should really call HMRC and ask for details on what you’ll need e.g. any documentation/proof they may be asking at customs for clearance.

      I haven’t imported such items so don’t know really what they may ask.


      1. Thank you for the response.

        Will contact HRMC.

        Kind Regards,


      2. Andrew Minalto

        No worries, you’re welcome Andy!

  8. HI,

    I am planning to start an online for customers in UK & Ireland. If an item that I listed is sold I will ask my supplier who is based in HK to directly ship item to the buyer (drop-ship model), then who will be liable to pay VAT & Customs? Buyer or Me as a seller?

    What VAT thresholds needs to be considered here to register for VAT?

    If I cross VAT threshold, should I register for VAT? and how much VAT should I pay?

    1. Andrew Minalto

      Your buyers will have to pay import duty & VAT.

      As for applying for VAT, thresholds, amounts to pay etc. – these are all questions you will need to ask your accountant as in your situation (sending goods directly from supplier to customers) “may” require registration for VAT immediately. But I’m not an accountant so can’t give you such detailed advice.


  9. Roy Gregory

    Dear Andrew,
    I will shortly be importing goods from Thailand using a UK limited company.

    I understand the principles of invoicing and paying vat and import duty but could you tell me how I will know when the goods reach the customs so that I can pay the taxes and get the goods released. Also can you please tell me how long it normally takes for Customs to release the goods when payment has been made?

    Our annual turnover is well below the threshhold required to register and pay vat so can we reclaim the vat paid on the goods and how do we go about doing that if we are not registered?
    Best Regards
    Roy Gregory

    1. Andrew Minalto

      Hi Roy,

      Thanks for your email.

      The shipment holder (courier or freight forwarder) will inform you when goods arrive in the UK (if they have correct contact details for you).

      It just takes few days for customs to release your goods, often even less than that.

      You can’t claim VAT back you pay on imported goods if you’re NOT VAT registered business. Please check out this post for more details:




  10. Hi Andrew i am interested in purchasing some items from a hong kong supplier of keys for cars he has quoted me a price for the goods of $1200 dollars the items will be delivered via dhl i would have to pay import into the uk what happens does the person i purchase from decalre the full amount to dhl and i pay for the duty look forward to hearing from you

    1. Andrew Minalto

      Hi Tim,

      Yes, just ask supplier to declare full value and attach invoice to the package (outer part – in the document pocket/sleeve).

      Then DHL will do customs clearance and you simply need to pay all taxes/processing fee.


  11. Hi, I am starting an online business. I am importing some items from china to the US. I took a freight forwarder to handle everything.
    Im wondering, how would I know if they are charging me what the actual duties cost? They just sent me a bill with all my charges including duty fees, how do I know they didn’t add more than the actual charge. Is there a way to verify that?
    Also, I’m wondering, how do I figure out the actual cost of each item. I orderd items with different prices from this manufacturer. Then I paid taxes and shipping. So how do I figure out the actual cost of the product?

    1. Andrew Minalto

      Hi Rachel,

      You should ask them to provide a break down of all fees/costs you have to pay them with VAT, import duty clearly displayed along with other charges.

      As for calculating shipping cost per item – well, you will have to do some manual work there. Use product’s price to calculate taxes (can use a ball park figure of 25%) and then add fraction of the shipping cost based on item’s weight or value.


  12. Hi Andrew

    I recently purchased a specialist weightlifting bench from the US. The bench cost 500 dollars to buy and I paid 300 dollars for shipping. I did my homework and was under the impression that once the bench entered the UK I would be contacted by customs and told how much I had to pay to have my item released. To my surprise the bench got delivered yesterday by the courier and I signed for it. I am not complaining that I have seemingly not been requested to pay any import tax or VAT on my purchase but I am a little baffled by it. Can you think of a reason why I have not been asked to pay any import tax or VAT? I am not a business. I am a private individual who just bought this item off the Internet because I couldn’t source it from within the UK?

    1. Andrew Minalto

      Hi Gavin,

      Some couriers actually deliver shipment first and then send tax invoice via post. So it could well be the case this time.

      Very unlikely that such a large shipment slipped through customs without clearance.


      1. Thanks Andrew

        If the carrier invoices me, how do I know if I am being charged correctly? If HMRC invoice me directly then I’ll know but how do I know that the carrier is not overcharging me? I am happy to pay HMRC what they wish but I did not choose this carrier, the sender did. I do not feel that I have any duty to pay them anything as I have never knowingly entered into a contract with them.

      2. Andrew Minalto

        The money goes to HMRC anyway, it’s not the courier that takes it!!!

        In the invoice you’ll see a detailed break down of the costs – VAT, import duty, processing fee.

        If you want then, you can double check if numbers are correct.


      3. Ah ok, I get you now.

        I’ll just wait and see what comes.

        Thanks again.

  13. Hi Andrew,

    I buy and sell antique artwork to supplement my pension and some of the items are made in England but are now located in different countries – typically Australia and Canada, where there are many old English families. I can buy, for example, a vase from an English home and pay no VAT, yet the same vase located in Canada seems to incur VAT. This doesn’t seem fair.

    Is there any way around this?


    1. Andrew Minalto

      Hi Freya,

      Unfortunately that’s how it works… if you import valuable goods from outside European Union, you have to pay taxes.

      There’s no way around it.


  14. Hi Andrew,

    thats a LOT of advice up there! So here are my questions which I think will be useful to others too.

    I am Hong Kong based company and I have garments I want to sell In UK. The stuff is coming from Hong Kong. I am trying to weigh up the pros of carrying with me as Merchandise In Baggage or just posting it to myself in the UK and then distribute.

    1.HMRC says MIB can NOT be part of baggage allowance. So does this mean I need to pack my merchandise separately and pay for it as a separate item of baggage?

    2. Is this just so customs can get VAT from the shipping cost portion of my merchandise?

    3. Arriving at the airport I wont need to fill in a C88 SAD if my merchandise total value is below GBP800. But I will pay import duty and VAT once they have agreed with my valuation right there at the airport red zone?

    4. If I was were to post it to myself. I just fill in a CN22, pay my import duty and VAT when collecting from the post office? Meaning less hassle from customs going through all my luggage?

    Thanks v much

    1. Andrew Minalto

      Hi Matt,

      I’m sorry but I really don’t have any experience in doing something like this so can’t provide any advice…


  15. Hi Andrew,

    I work for an online homeware company, unfortunately a few items we ship to our customers arrive damaged, to which we dispatch replacement orders at no additional cost to the customer.

    Should duty be applied to these replacement orders? Do I need to complete paperwork to avoid further charges?


    1. Andrew Minalto

      Hi Sarah,

      Do you ship from UK to UK based customers?

      If so, I can’t see really how import duty relates to this as you pay import duty when you import goods in first place.


      1. Hi Andrew,

        No we export internationally, mainly US and Australia.


      2. Andrew Minalto

        Then yes, people will have to pay import taxes on products you send out as replacements….


  16. Hi Andrew,
    Great article but I have a question, how about clothing I live in Spain and I ordered a pair of shoes from China and they cost €100, how much will I be paying for my order?

    1. Andrew Minalto

      Hi Bilal,

      You’ll pay +/- 25% on top of that in taxes (VAT and import duty).


  17. James sherwood

    I’ve just returned from Chicago after visiting my sister, I left my wedding ring at hers and have had her post it back via usps international (insurance $1000) but now I’ve received a customs bill of £135 but I brought this item in the UK over 4 years ago so do I still have to pay all these customs charges. If not does anyone have a contact I can use.



    1. Andrew Minalto

      Hi James,

      Your best bet is to call HMRC and ask for advice. Chances are that if you can prove that you imported this item in UK 4 years ago, you don’t have to pay taxes again. I’m not sure how this works really, haven’t been in a situation like this.


  18. Hi Andrew,

    Great article but I have a few questions that I would really appreciate if you could help answer…

    1) The threshold limit for which no VAT is charged you mentioned was £15, is this meant to be for the total value of the goods only or the total value of the goods plus the cost of postage? E.g. Product value £10 + Postage cost £5 = £15

    2) You also mentioned that import duty is not charged if the total order is worth £135 or less. Does this figure include the cost of postage e.g. Product value £100 + Postage cost £35 = £135 or is it for the total value of the goods only?

    3) I am thinking of placing an order for several plastic model kits from Japan for which the total cost without postage comes to a total of £500. These plastic model kits are for personal use rather than for resale and I was wondering what would be the best method (cheapest) to import into the UK, should I send this as a single package and incur import duty, VAT and Parcelforce’s clearance fee or should I divide my orders up into packages that are less than £135 each and incur just the VAT and Parcelforce’s clearance fee? Or would it perhaps be better to send this as a single package via Fedex?

    Your opinion and assistance would be most welcomed. Thanks.

    1. Andrew Minalto

      1) As far as I know, it’s on total value of the goods, yes, excluding shipping costs.

      2) Same thing.

      3) Import duty is usually not that high (3-5%) so it’s simply not worth doing multiple shipments to avoid it. You’ll pay much more in additional shipping charges, additional customs clearance fees than you would make any savings.

      So just send them all in one go via cheapest courier your supplier can organise for you.


  19. I purchased some cream for medical use from usa total came to £44.00 incl delivery as it was a free delivery but dhl courier say I need to pay £16 for duty and vat I think that is a bit too harsh amount on so small money that I spent

    1. Andrew Minalto

      Well, unfortunately that’s how it works…

      You have to pay courier a custom clearance/processing fee – that’s why you get a rather high cost associated with low cost imports.


  20. Hi wondering if you can help. I ordered 5 hats from us as sample to check quality. Total price was £30 . On top of that I paid £14.78 shipping cost. When package arrived in UK I had to them pay another 13-17 pounds customs if I remember correctly. I now want to order in bulk but I am scared the customs vat and shipping cost is going to be through the roof. They are saying 8$ a hat and I am ordering 225 hats. What sought of shipping vat and duty costs will I be looking at? Will costs come down the more I order. Would o be best getting 500 hats in the same order instead of 225 every few months.
    Lastly if they was to drop the value of the goods to say 5$ a hat on the invoice will that lower or increase shipping, duty and vat costs for me. Will I be better off or is it better to increase the price really.
    Thank you in advance

    1. Andrew Minalto

      Hi Ely,

      Thanks for your comment.

      The reason why you had to pay that much (£13-£17) in taxes on your sample shippment is because there’s a fixed clearance fee, charged by courier company. When your order size increases, this fee stays the same and you only pay VAT @ 20% and import duty.

      So yes, with your next order, the charges will be smaller – percentage wise. As a ball park figure, you can use 25% for VAT and import duty. So if your order is worth say £1000, you should expect to pay around £250 in taxes.

      You can’t ask your supplier to lower invoice’s value – that’s tax evasion and illegal.


  21. Sir Ragnar

    Hey Andrew,

    Thanks for the detailed guide, exactly what I was looking for.

    I am located in USA, and trying to sell an item in EU (UK to be exact) to a vendor/distributor for the first time.

    I currently sell an item that has 0% duties

    I will be importing a product from China to United Kingdom to another vendor, and will be doing so on DDP Icoterms.

    This is my first time importing to UK, from my understanding:
    – Duties on this import shipment will be 0
    – VAT, I will have to pay 20% for the total sale price of the order

    1. Is the details I outlined above correct?

    2. Do I need a VAT registration number or anything? I just am selling to another vendor, so that will be the limit of my business in UK/EU.

    3. If the person you are selling to is VAT-Registered Business, they will be collecting VAT from their customers. Does that mean, I, the supplier then have to pay any VAT? It sounds like the responsibility of paying/collecting VAT is transferred to my vendor.

    4. I buy from my supplier for $X, and selling it to my vendor/distributor for $Y. Do I pay VAT on how much I get the goods from my supplier, or how much I am selling it to my vendor in UK, when importing? (These goods directly go from China to UK)


    1. Andrew Minalto

      1) Yes, if you say that import duty is 0%, only VAT @ 20% is payable (on goods value + shipping costs).

      2) No, you don’t need a VAT number.

      3) No, you – based in the USA – don’t deal with VAT etc. Your UK customer will deal with all of that.

      4) As I said, you don’t pay VAT in this case. Your customer in UK will pay it.


      1. Sir Ragnar

        Thanks for the reply Andrew.

        It seems like a very difficult and expensive task to get VAT registered if you are a new business (and outside of UK).

        Would the vendor/distributor then need to be the Importer of Record for the shipment?

        In this case, DDP terms are pretty much not possible correct? We would probably have to go DAP?

      2. Andrew Minalto

        I don’t know really as I haven’t been in a situation like this.

        But yes, it would be much simpler if the vendor/distributor would be the importer and one that handles all the paper work and taxes.


  22. Scott Larsen


    Great site!

    I’m in the U.S. I purchase custom shirts from India that were the wrong size. Instead of paying a ridiculous amount at FedEx to return them, I used the USPS. The returned box is sitting in customs with the response of

    “invoice of the items is required for assessment of duty if applicable.please quote the local parcel no given by the postal office”

    Do I have to pay on returned goods ?

    Thank you

    1. Andrew Minalto

      Hi Scott,

      Not sure what this means really so you’ll have to contact USPS to find out more on what exactly you need to do.


  23. I have a small online store business that recently received a request for shipping to the UK. Normally we include shipping in our pricing inside the U.S., but due to the cost to UK ($45USD) we were going to charge our customer $25 which is the difference of what we normally cover. My question is this: since the VAT is based on purchase + shipping, should we back down the price of the purchase and just charge purchase + flat shipping? I’m worried that she will get charged a VAT rate based on the full shipping rate ( am I making any sense?)

    1. Andrew Minalto

      Hi Deanna,

      Yes, VAT will be charged on shipping too.

      I can’t give you any advice on tax evasion though.


      1. Deanna

        I’m not trying to evade paying taxes. I was trying to explain that we include shipping in the price of a customer’s purchase. At least in the U.S. We don’t charge additionally for shipping. It’s included! So for Int’l we would as well, but my concern is that how will the customs view that? Is there a way for them to see that the shipping is included in the purchase price? Or do we have to breakdown the price for them?

      2. Andrew Minalto

        You should show up shipping separately on the invoice because while VAT is calculated on goods value + shipping, IMPORT DUTY is calculated on goods value alone. So if you include shipping price in goods value, customer will have to pay higher import duty.


      3. Deanna

        Okay, thank you!

      4. Andrew Minalto

        You’re welcome Deanna! 🙂

  24. Eirian Jones

    Hi Andrew,

    I was wondering if you can help.

    I’ve purchased a bag from Macy’s USA to ship to the UK, boarderfree is there appointed international shipping agent. At checkout it wasn’t clear I could pre-pay the estimated duty & taxes cost – therefore will need to pay upon delivery – How does this work?

    I have used the estimated duty calculator and its saying it will be around £30 (£140 for the bag and £16 for delivery) reading through boardefree articles it says the duty and tax payable can vary, I’m now worried I will get stung for a much larger bill than expected. How does this work and is it likely?

    Lastly DHL are the courier, I don’t understand how they can charge a fee when I’ve already paid the delivery cost?

    I hope you can help! Many thanks Eirian

    1. Andrew Minalto

      Hi Eirian,

      It should be roughly £40 in taxes, including clearance fee. It shouldn’t be much bigger than that.

      DHL will clear the goods through customs for you and simply invoice you for VAT and import duty payment + clearance fee.


  25. tony gabrille

    Hello Andrew , really great article. i have couple of questions would really appreciate if you could help.

    1. We are a new start up (gift retailer) looking to order items (aprons and wallets) from U.S. I placed an order now with the supplier in U.S. they will be delivered soon. Now What do i do now ? should i just wait for the parcel to come , go to postoffice , pay the Vat/customs and collect it? take them to store and sell them?
    is that that simple?
    or AM I MISSING something here: as in when they say ‘DECLARE to CUSTOMS’ Do i have to fill in any other forms???

    Do i need EROI number to order /collect the above items?

    2. normally when i order from suppliers they send it through fedex/DHL etc. Do i need freight forwarder? what does freight forwarder actually do.. do the Fedex/DHL take care of customs etc???

    i would really appreciate if you could kindly clarify .


    1. Andrew Minalto

      Hi Tony,

      Thanks for your comment.

      1) yes, you just wait for the package to arrive. If it’s sent via courier, they will contact you about tax payments prior delivery. You don’t have to do anything extra – courier companies will clear the goods through customs, you just pay the invoice. You don’t need EORI number unless they ask you for it.

      2) No, you don’t need to use a freight forwarder when using courier companies like Fedex, DHL etc.


  26. Andrew

    Really pleased to have found your site. Travelled to Singapore and due back in the UK in about a weeks time. I forgot to pack my laptop which was essential for my visit. I bought a Apple MacBook Pro using my personal Visa with the intention of putting it through as a business expense. The cost was roughly $3,500 SG, which is roughly 2:1 against pound sterling. At Singapore airport I can claim back GST( Singapores VAT equivalent) which is 7% on purchases. When I declare it at Heathrow will it be the gross amount or minus the 7% GST. I’m VAT registered am I right in thinking there’s just Vat on this item to pay or will there be duty also? Cheers Matt

    1. Andrew Minalto

      Hi Matt,

      Yes, it should be NET amount (purchase price – 7%) as that’s the actual sum the item cost you to purchase.

      And yes – import duty on laptops is 0% so you’ll only need to pay VAT.


      1. Thanks for clarifying things!

  27. Wendy Livesey

    Hi Andrew, I wonder if you can help? We are a UK company who purchases many goods from the EU, one of our suppliers has offered us a container shipment direct from China, will we have to pay duty when it is delivered? Our purchase invoice and payment will be with our supplier in Germany and they will ship the order from China to the UK.

    Many thanks


    1. Andrew Minalto

      Hi Wendy,

      Yes, you’ll have to clear the goods yourself and pay taxes in a case like this.

      So you have to decide whatever it’s worth your time/hassle/extra cost.


      1. Wendy Livesey

        Thanks Andrew, impressed with your prompt reply!

      2. Andrew Minalto

        you’re welcome Wendy! 🙂

  28. Hi Andrew. First of all i want to say what an informative site this is and to congratulate you on good advice.
    I have recently become a limited company and have imported goods for China for the first time, I received a text call today to pay my taxes today of £51 which really confused me and i paid on line, however I ordered £5k of goods, I have e-mailed my supplier and asked what price they valued the goods and they have told me they valued them at £350, im not sure why they have done this, should I contact DHL and explain what has happened, i really do not want to mess my new business up, Thank you

    1. Andrew Minalto

      Hi Sue,

      This is very typical of Chinese suppliers to under-value shipments…

      But yes, you just want to call DHL asap and inform them about this situation – there won’t be any penalties to you. Just provide them with real invoice for real amount so they can re-calculate your tax bill.


  29. Hi
    Had an old pair of maui jim glasses repaired in hong kong for £25.00 uk money ( i live between thailand and uk ) Hong kong at the time only repairer near thailand, but since postage better to uk asked to send there care of my daughter.
    My daughter gets a bill letter for £186 duty,vat and clearance ( crazy ) i call they said they stated on customs dec, 9000hkd ( crazy )
    Any way, you guessed it no way paying that, not even if they are sentimental.

    So my question is is it better to send to me in thailand or back to uk with correct repair cost of £25.00. ( by the way Maui Jim do insist they marked it correctly but i will never know as they will not show me the dec done )

    Please any answers would be great.
    This is my own old glasses sent for repair to plastic nose bridge.

    1. Andrew Minalto

      Hi Kevin,

      I really have no experience on importing such repaired items, so don’t know what to suggest to you…

      Probably yes, just send it back and re-send to UK with correct value of repair service.


  30. o.hennessy

    Hi Andrew,
    Im new to the US and I recently ordered some clothes from a UK site, not realising the whole customs situation. Now they’ve smacked me with an 80 dollar customs bill which I genuinely cannot afford to pay! If I don’t pay will they return the package to the sender (so that I can tell the site its a return and they just refund me)? Do Customs charge me anything at all in this case? Eg Handling or processing fees or the cost of the return postage?

    Thanks, Orla

    1. Andrew Minalto

      Hi Orla,

      Usually that is the case, yes, but I don’t really know how US customs work, so you should ask them directly what happens if you refuse to accept the package.


  31. Hello Andrew, wow, that’s it!? ‘I’ll probably need a more specific description’ ? Thanks!

    And you are manifestly incorrect to state that i will be unable to clear the goods myself, it is perfectly possible for an individual to do this and i have done so myself, several times, at both Felixstowe and Southampton. It can be complex, especially the first time but you are misleading your readers when you say that only a qualified customs broker can clear a shipment and put together a customs declaration.

    Very disappointing.

    1. Andrew Minalto

      Hi Naka,

      How do you do it on your own? I have always believed that you can’t do it on your own….

      What’s the procedure? how do you create customs declaration?


  32. Hi Andrew. I was recently in the US on a very long road trip with some US friends which consisted mainly of clothes shopping at vintage stores, yard sales and flea markets across the US and amassing a van full of the stuff. I did this safe (i thought) in the knowledge that one of my US friends is an experienced shipper of similar goods worldwide and had said he would take care of this for me, which to a certain extent he has. So i now have approx 350kg of used vintage clothing and accessories of hugely varying ages, types and fabric content underway to the UK by seafrieght, (i’m assuming as part of a mixed container). However, he just emailed me a copy of the shipping documents and he has given an extremely simplified description of the goods: x number of ‘mixed used clothing’ etc etc. After looking at the customs duty calculator and the myriad codes and descriptions, fabric contents, woven/unwoven etc i am very concerned that such a simple description of the goods may well create a nightmare of problems on arrival. Can you shed any light on what i can expect? I had originally planned on trying to clear this shipment myself but i just don’t know where to start given this huge unknown. Many thanks, Naka.

    1. Andrew Minalto

      Hi Naka,

      Yes, you’ll probably need a more specific description of goods. But anyway, you can’t clear the goods by yourself! You need a qualified customs broker to do this for you – put together customs declaration. They will also advice you on documentation needed etc.


  33. Hi Andrew. You provide a very valuable service. How would you advise us to ship a replacement cell phone from the U.S. to our daughter who is in Paris, France on a college internship?

    1. Andrew Minalto

      Hi George,

      I probably shouldn’t advise this but you should send it via USPS, mark on customs forms as GIFT worth $10 and she won’t have to pay any taxes or import duty.


  34. I’ve just encountered an interesting dilemma. Yesterday I lost an old friend to cancer and on the same day discovered that a group of ’boutique’ guitar effects builders in the USA hold an annual auction of effects pedals with ALL proceeds going to a cancer charity. Seems like a good idea – a kids cancer charity gets money, I feel like I’ve done something and also have something to remember my friend by. Of course, this kind of thing means that you are buying the item at considerably OVER the standard price … as a result of which you end up paying well over the odds in VAT (and possibly duty). So, if I try to support someone’s charitable efforts … I pay tax on it. Yes, it’s complicated because I do receive something with some value … but it doesn’t seem quite right.

    Probably easiest just to make a charitable donation over here, but a shame not to support a great charitable initiative.

  35. hi andrew
    thinking of buying ice cream machine from ali express china
    cost 1900 US Dollars free shipping
    please could you work out import charges RRRRRRRR

    1. Andrew Minalto

      Hi Liam,

      It will be roughly 25% so $500 or so for VAT and import duty.

      To get more precise figure, use this calculator:



  36. Imogen Kennedy

    Hi Andrew
    Thanks for your very helpful article.
    I am in India currently, hand choosing products for my new business in the UK.
    Therefore I will be personally overseeing the sending a consignment, probably around 200kg using an agent in Delhi. He says he uses Fedex.
    Then I will be flying back to UK to receive the goods.

    You advise using a freight forwarder. Could you share with me how to proceed in the above scenario?
    Is Fedex a freight forwarder who will get the goods to my door or do I require another agent on the UK side?
    Sorry I’m a bit confused!

    Many thanks,

    1. Andrew Minalto

      Hi Imogen,

      No, if you’re using a courier service, such as Fedex, you don’t need any extra services or separate freight forwarder. Fedex will clear goods through Customs and deliver goods to your address in UK.

      Only with air freight and sea freight we use freight forwarders to simplify the whole process. Not with courier deliveries.


  37. Thank you Andrew. At least I feel confident I’m not missing anything on this subject. Thanks again

    1. Andrew Minalto

      no worries, you’re welcome Bremar!

  38. Hello Andrew,
    I have been reading these questions and am impressed with your knowledgeable answers.
    I have an offshore registered company in Hong Kong. I buy products from China and sell in the uk and Europe to private individuals through eBay and amazon. Because it’s an offshore company I must pay vat immediately on every sale as there is no VAT threshold applicable to offshore companies selling in uk.
    I buy goods for £X and sell at £Y. VAT, which as we all know stands for value added tax is then payable on the actual sale price of the goods ie £Y. I am therefore paying VAT on the whole price of the goods because I don’t think I can claim any element back because there is no vat in china.
    Q. Do you know of any element of my costs eg the original purchase price that I can set off against the VAT I must pay.
    I know in theory I must charge a price plus VAT and that’s how it is on the invoice but in reality To remain competitive I have to absorb most of the VAT myself so the total charge to the private individual isn’t too high . Thank you

    1. Andrew Minalto

      Hi Bremar,

      Are you living in China?

      1. Bremar

        No not now. I am English but went out to china to work where I have been for 4 years but a few months ago (beginning 2015) I moved to America where I am now working under a visa. This other business started small but is now growing. Products are sent to a small company in the uk where they are posted worldwide. I sell through amazon and eBay. Because the products are sent out from the uk. I pay uk VAT from day 1 of any sale, but there seems no way of recouping any of the costs except the import VAT. I had always thought vat was about a tax on the increased value of the product. As in value added tax.
        Thank you for any advise.

      2. Andrew Minalto

        Yes, in that situation I’m afraid you can’t get more VAT back, apart from what you have paid at time of import.


  39. Hi Andrew,
    Great article, I run a UK based limited company (non VAT registered), I just received my first shipment from China, via Fedex courier.
    I naively accepted the package without checking the commercial invoice first. It turned out that the invoice is completely wrong, it declared 150USD instead of 650USD, HS code is wrong, items are wrong and even the Consignee is wrong as it’s under my personal name (with a typo) instead of the limited.
    What do you suggest to do? and moreover how can I be dead sure this doesn’t happen again in the future?
    I explicitly asked the supplier to put my company name (and I naively assumed they were to declare the right value).
    I guess I’ll have to wait some days for the Fedex bill on the stated amount. And then how should I proceed?

    Thanks a lot,

    1. Andrew Minalto

      Hi Mario,

      You should contact Fedex as soon as possible and explain the situation. Then send them requested documents (invoice, proof of payment) so they can correct this.

      There are no fool proof ways to avoid such situations in future as Chinese suppliers tend to under-value orders all the time.

      What I personally do is when I see that package arrives in UK (by online tracking number), I contact courier company straight away and send them correct invoice so they can do customs clearance procedure properly.


      1. Thanks a lot Andrew! Just contacted Fedex they’ll amend the entry as soon as I send the revised invoice (hoping the supplier send me one)

        Thanks again,

      2. Andrew Minalto

        You’re welcome Mario! 🙂

  40. Correction *Main selling platform being this WEBSITE that I’m having made.



  41. Hi Andrew. Thumbs up for the wonderful service!

    A non UK/EU based company wants to charge me VAT for designing and developing a website for a new start-up I intend to launch here in UK. Question is, can they do that? The beneficiary address is Hong Kong. They will buy a.co.uk domain for me and provide webhosting facilities also.

    Can you please guide me Andrew.

    Thank you.


    1. Andrew Minalto

      Hi Imran,

      IF they’re register as VAT payer in UK, the MUST charge you VAT, yes. Also, non-EU based companies selling digital services to EU customers such as web hosting, must register for a VAT number in EU since beginning of this year and charge VAT on all sales, yes.

      You should ask them their VAT number and verify whatever they’re registered or not.


      1. Thanks Andrew. I just sent them an email now waiting for their response.

        I will be importing mobile phone and computer accessories and other general consumer electronics items like travel adapters etc. from China through Alibaba predominantly. The details on your website are truly amazing regarding what to watch out for and how to go about dealing with potential suppliers. Hats off!

        I will mostly be selling these on to wholesalers and retailers and possibly entertain those looking for a one off item through this website. Main selling platform being this platform.

        In quoting my prices to potential buyers, should I incorporate VAT on these items? How do I go about this please guide.

        Thanks again!


      2. Andrew Minalto

        Hi Imran,

        It depends whatever you’re VAT registered or not. If you’re, you have to show VAT on all invoices. If not, you’re not allowed to show VAT. As simple as that. If you plan dealing mostly with VAT registered businesses, you should register for VAT too.


      3. Hi. Some businesses purchasing from me might be VAT registered even though my business may stay well below the £82,000 annual threshold. Do I still register or no need until I go beyond the threshold?



      4. Andrew Minalto

        If it’s just some customers, then no, you don’t want to register for VAT until you reach the threshold.


  42. Thank you so much!!!

    1. Andrew Minalto

      You’re welcome! 🙂

  43. Thank you for Reply. well i was checking dutycalculator for my Product HS code import duty price but there is no result shown. Can you just give rough idea of Cosmetic products or Hair Care products Import Duty Rates. it will be very helpful for me to prepare my Import goods in Uk. Thank you Once again.

    1. Andrew Minalto

      Simply call HMRC and ask them exact rate!

      It could be anything from 0 to 15%.

      usually though it’s below 5%.

  44. Hi Andrew .. I am Aditya. well first of all i am very Thankful to you for sharing your Experience and Knowledge with all of us.

    My question is If i buy some goods from china or USA and i paid them from my home Country India and give my Shipping Address of UK. Then what would be Invoice Value of Goods bcz as i am citizenship of UK but paid all Amount from In India. Can You please help me to solve this puzzle. waiting for your reply. Thank you.

    1. Andrew Minalto

      I haven’t been in a situation like this so not sure but most likely, Customs in UK will need to see real invoice which will be in USD most likely and then proof of payment (from your bank). Then they probably do calculations to see if it’s correct amount or not.


  45. Hello Andrew, I regularly order from the US and have been for the past few years, I have always made sure that my orders have at least £5 clearance of the £135 threshold. Recently even though my orders are below this I have been having Import Duty added on aswell as the VAT, when I telephoned them they said it was to do with the weight bracket? Has something changed??
    Many thanks 🙂

    1. Andrew Minalto

      NOT as far as I’m aware!

      Weight shouldn’t be taken into account when doing import duty & VAT calculations.


      1. Charlotte

        Thankyou Andrew 🙂
        I have just phoned about the most recent order and the lady has told me that my order came to £133.60, they then added on the VAT adjustment fee of £6.25 which has taken me over the limit which is why I have been charged Import Duty aswell, as I mentioned I always managed to order without hitting the £135 limit before, the same way I do now, is the VAT adjustment payment new??!!

        Thanks again 😀

      2. Andrew Minalto

        Hmmm, that’s weird… VAT payment shouldn’t be taken into account when calculating import duty AS import duty is paid solely on goods value.

        And then VAT is paid on goods value + shipping + import duty.

  46. Hi Andrew,
    Please can you advise me on one point , tax is a pain but is there any way of paying for the import costs and not pay the post office or ant other company for there handling fees. The post office charge of £8.00
    Thank you for the advise and help on your site.

    1. Andrew Minalto

      Hi Mark,

      Sorry, no – there’s no way around that.

      Post office’s charge of £8 is actually very small fee – couriers charge more and customs brokers even more than that.

      So you simply have to take this £8 fee into account when doing your calculations.


  47. Hi Andrew,
    I am so glad I came across your website – and this has been great information that you’ve provided. I am looking for something similar but am not able to find the correct answers – maybe you can guide me in the right direction. I have a small business in USA where I import products from India. My sister is handling the business in USA, now whilst I am currently temporarily staying in France. So, I would like to sell our products here in Europe. If I import products from India directly here to be distributed to the various shops – do they pay the VAT and duty? And how much is the VAT and duty in Europe? Is there any way I pay these extra VAT/duty – so it is no trouble to the shop owners? And Who should I use as the logistic company – since these would be several small 10-20 kg shipments – and I don’t want to end up paying a whole lot just for shipping. Also, I don’t want to disclose where I get my products from to the shop owners – but the AWB bill always has the sender’s info.

    I would appreciate your feedback and advice.

    Thank you

    1. Andrew Minalto

      Hi Sonu,

      Thanks for your comment.

      Yes, if you import these products from India into EU (France), you’ll have to pay VAT and import duty. VAT in France currently is 20%. Import duty varies from product to product but is usually below 5%. So in total, as a ball park figure you can use 25% for VAT and import duty (exact import duty rate you’ll find out on first shipment).

      If you send goods directly to shops, they will be billed these taxes so if you want to avoid it, it would be best to ship to you first and then you ship to shop owners. This way you also won’t reveal your supplier contact info.

      As for best shipping method from India -you want to ask your supplier as they will know best which shipping company to use for such 10-20 kg shipments.

      Hope this helps Sonu & Good Luck!


      1. Hi Andrew,

        Thank you for your response and advice. Sorry I wasn’t clear in my last question that I am staying in France only temporarily and therefore am looking for ways on how I can import and distribute our products directly to various shops in Europe with the constraints that 1. I don’t want to disclose the suppliers to the shops and 2. I didn’t want the shop owners to be troubled by all the custom clearance fees and formalities. Do you have a solution for this except for finding someone in the middle 🙁 ?

        Thank you

      2. Andrew Minalto

        I don’t think there’s a way around this, sorry.

        You will have to use some sort of company that can clear these imported goods and then deliver them to shops.

      3. Hi Andrew,
        Can you give me an example of such companies?! I didn’t know that there were companies doing this. I thought I would have to get someone I knew to be doing this for me.


      4. Andrew Minalto

        No, sorry, I don’t know any such companies, especially in France.

        But I guess you could find a freight forwarder or distribution or warehouse/storage company who can do this for you.


  48. Hi Andrew, I have loooked all over the internet and cannot find any clear asnwers hence the following. I recently bought come clothing from a US brand online. It was delivered to my London address with DHL. I paid VAT and duty through their website. I had to return one of the dresses that did not fit and would like to be refunded my VAT and duty charges. The US brand have given me a refund document and have told me to contact my local customs office while DHL says that they have to sort it out on their side in the US.
    What is the quickest way for me to be refunded? I am not VAT registered. HELP.
    Also I cannot seem to figure out where my local customs office is….


    1. Andrew Minalto

      Hi Mary,

      This should be done via HMRC so contact them and ask for the correct procedure of getting VAT back on items you returned.


  49. Hi guys, I am planning on drop shipping items from china to the UK and FedEx is my shipper. I worked out all of the costs using the duty calculator but I don’t want my customers to have to pay the Taxes (there isn’t any duty to pay) when they receive the item, how do I pay this before they are billed for it, who do I pay, when do I have to pay and by what payment method (e.g. PayPal, Direct Debit etc.) Thanks in advance.

    1. Andrew Minalto

      Hi Ciaran,

      By default, your customers will face VAT & clearance charges in a scheme like this. As receiver is one that pays these fees, not exporter.

      If you want to cover these fees on your own, you’ll have to send packages to you first and then forward them to customers once you have paid VAT & clearance fee to courier.


  50. Hi there andrew i am importing some make up boxes from china and have just received the samples and they have arrived damaged, the supplier says he cant refund what i paid as it was sent via dhl and express shipping, i am now worried that if i give a large order then alit may arrive damaged as the supplier has said he wont be able to replace them, do you know if the supplier is supposed to replace the items, am new to this and not sure what to do as i can be out alot of money. Any advice will be appreciated.

    1. Andrew Minalto

      Hi Samaira,

      Supplier can basically do what they want – you have no control over how they treat situations like these. A good supplier would be more understanding and give a refund or send replacement but then on the other hand, they may be thinking that you’re trying to scam them out. Who knows.

      Anyway, if packages are sent via courier, shipments should be insured. So before you’re accepting courier delivery, you should open boxes and check if items are ok. If not, you can then claim and insurance claim for damaged goods. But before sending fragile items, you need to find out what procedures courier have in place for insurance to be valid as they may require some specific packaging for fragile items, labels on outside of box saying FRAGILE etc.


Leave a Reply

%d bloggers like this: