Importing from the USA to the UK: duty, VAT and paperwork

Is there a trade deal?

There is no comprehensive UK–US free trade agreement in force for most goods, so imports from the United States generally pay the third-country rate for their commodity code. Check the tariff for the specific code, as arrangements for some sectors can change.

Low-value parcels

If the goods in a consignment are worth £135 or less, no customs duty is charged. VAT is normally charged by the seller at the point of sale instead of at the border. Excise goods such as alcohol and tobacco are excluded from this rule.

Duty vs VAT vs cash outlay

Illustrative example only (assumed 4% duty rate — check the real rate for your code): goods £1,000 + shipping £150 + insurance £10 = customs value £1,160. Duty 4% = £46.40. Import VAT 20% of (£1,160 + £46.40) = £241.28. Money you pay out: £1,447.68, plus any courier or broker fee. A VAT-registered business can usually reclaim the £241.28, so its final cost is about £1,206.40 — but the VAT is still paid up front unless it uses postponed VAT accounting.

Working out the cost

Customs value is normally the price paid for the goods plus the cost of transport and insurance to the UK border.

Import VAT is charged on the customs value plus any duty. The standard rate is 20%, but some goods are reduced or zero-rated. VAT-registered businesses can usually account for it through postponed VAT accounting.

Couriers often charge a clearance or handling fee when they pay duty and VAT for you. This is the carrier's own charge, not a government tax.

Before you ship

Businesses importing into Great Britain need an EORI number starting with GB. You can apply for one on GOV.UK.

Official sources

• UK Trade Tariff — look up a commodity code
• Tax and customs for goods sent from abroad
• Get an EORI number