If you are importing goods into the UK from overseas then you may be required to pay Import Tax. The amount and whether it is applied will depend on a number of factors including the value of the goods that you are importing.
An import tax calculator can help you calculate the level of duty required. To find out how much you owe, you will need to locate your product code. Another element that will be required to accurately calculate the duty that you owe is the country of origin of your product.
If you are working with a logistics company to import goods into the UK, they will calculate the level of duty and ensure that is collected, helping to smooth the shipping and delivery process.
In this guide, we’ll take a closer look at import tax, how much it is and when it’s paid.
How much is import tax in the UK?
The vast majority of goods that are imported into the UK are subject to import taxes and duties. It’s therefore important that you understand what these are and how they will be applied to your goods prior to beginning the import process.
VAT is charged on all goods sent from outside the UK to Great Britain, and outside the UK and EU to Northern Ireland. An exception is made for gifts that are worth £39 or less.
VAT will be paid when the goods are bought, or to the delivery or logistics company before the goods are delivered. If you are paying goods to the delivery company, it will be charged on the value of the total package. This will be made up of the value of the goods, postage, packaging and insurance and any duties that are owned.
The VAT that is charged will be set at the rate that applies to your goods. VAT is generally applied to all imports at the same rate that would be applied to the product or service if it was supplied within the UK. At present, the standard rate for VAT is 20%. VAT can usually be reclaimed if the business is VAT-registered.
Customs Duty will be levied on all goods that are sent from outside the UK, or outside the UK and EU in the case of Northern Ireland, if they are excise goods and worth more than £135.
Duty is paid on the price paid for the goods as well as the postage, packaging and insurance. Duty is currently set at the following rates:
- Goods less than £135 in value – 0%
- Gifts above £135 and up to £630 – 2.5%
- Gifts above £630 and other goods above £135 – the rate is dependent on the type of goods being imported and where they are being sent from.
For most importers, the rate of duty will be the goods above £135 rate, so will be dependent on the items and where they’re being imported from.
Do I have to pay duty on items shipped to the UK?
You will be required to pay duty on any items shipped to the UK that are worth more than £135 and are not gifts. The rate of duty will depend on the item that is being shipped and where in the world it’s being shipped from.
Importers bringing goods into the UK are required to ensure that the goods are presented to HMRC at the place of importation. An import declaration must be completed in advance by the importer or by their agent. This might include a logistics company. The declaration is known as the Single Administrative Document (SAD) or Form C88. In the UK this is submitted electronically.
The importer will declare the Customs Procedure Code (CPC) in box 37 of the import declaration. The importer will also be declaring to HMRC whether the duties are to be paid or suspended. The importer will then have three choices:
- Pay all duties when the goods are being imported via the import declaration.
- Suspend the customs duty and import VAT and then place the goods into a customs suspensive arrangement.
- Pay all the import duties and suspend the excise duty by immediately placing the goods into a customs suspensive arrangement.
When goods are placed into a suspensive arrangement they are moved to an approved excise warehouse under the UK Excise Movement and Control System (EMCS).
An excise warehouse is an HMRC-approved place of security where excise goods are kept without having to pay the excise duties.
An excise warehouse is any place of security approved by HMRC for the deposit and keeping and securing of excise goods without having to pay the excise duties. It is subject to certain specific conditions set by HMRC for the deposit of goods liable to excise duty. When the excise goods leave the duty suspension system they are then liable for excise duty.
Your logistics company can advise about what is the best approach for your goods, will calculate what duties are due, take care of all the paperwork and then ensure that your goods reach their destination.
Do I have to pay duty on items shipped from Europe to the UK?
Since the UK left the European Union, importing from the EU became subject to the same rules and regulations governing imports from elsewhere. This means that your goods will be liable for import duties and taxes if you are importing from the European Union. This applies to goods exceeding £135.
The tariff that you pay will depend on the goods that you are importing to the country, regardless of how they were purchased and who is shipping them, or if you’re sending them back to the destination country.
However, it’s important to remember that different rules apply to Northern Ireland which has remained in the EU Single Market. This means that you can import goods into Northern Ireland as before without them being subject to import duties. However, should you then wish to move those goods from Northern Ireland to Great Britain, they will then be liable for import duties.
This can be confusing and the rules are liable to change. Working with a logistics company can simplify the process, ensuring that you are always up to date with the latest regulations and import charges.
Can you ship to the UK without VAT?
Import VAT is a fee that is currently paid on any goods that are sent to the UK from abroad. Instead of the normal VAT that is paid at the checkout for these items, the importer pays import VAT. This is calculated on the total cost of the item, as well as the shipping and handling costs that are accrued when the courier brings the purchase to the UK. The usual UK Import VAT rate is currently 20%
Trusted import services from SSO International Forwarding
The rules and regulations regarding importing goods to the UK can seem complicated, particularly if you are doing it for the first time. Working out your likely import taxes is important to your calculations. If you choose to go ahead and import goods, then making sure you know how to pay your duties is vital.
SSO International Forwarding provides a comprehensive import service. We can calculate the rate of duty that you will be required to pay and ensure that it is paid in a timely manner.
We work to ensure that your goods reach their final destination as quickly as possible. We simplify the customs process and help you import with confidence.
Contact us to find out more.