Igor Gorbunov

Import Expert

Experience - 3 years

Everything You Need to Know About UK Import Tax and Duty

Shipping goods to the UK? Then you need to understand what import taxes and duties apply to your shipment. Below we break down each type of charge, who pays it, when it applies, and how to calculate it correctly.

Trade with the UK: Opportunities and Challenges

Trade between Malaysia and the United Kingdom has been steadily growing for more than two decades, reaching €5.6 billion. With both countries actively reducing trade barriers, the UK market is becoming more attractive not only for Malaysian but also for Ukrainian exporters. The key is understanding the UK tax system and customs rules.

Types of Taxes and Duties in the UK

Import duties and taxes in the UK are managed by HMRC (Her Majesty’s Revenue and Customs). The main categories are:

Customs Duty
Value Added Tax (VAT)
Anti-Dumping Duty
Excise Duty

1. Customs Duty

Customs duty applies to imported goods valued above £135, except for gifts.

Gifts from £135 to £630 — duty rate is 2.5% or less
Gifts over £630 and all other goods over £135 — duty rate depends on the product type and country of origin. You’ll need the commodity code

Table:

Type and Value of Goods	Duty Rate
Any goods under £135	Not applicable
Gifts £135–£630	2.5% or less
Gifts over £630 and goods over £135	Depends on country and code (link)

2. VAT (Value Added Tax)

The standard VAT rate is 20%, but there are reduced rates for certain goods:

Rate	Applied to
20% (standard)	Most goods and services
5% (reduced)	Health products, heating, child car seats
0% (zero)	Most food, books, children’s clothing

Gifts valued under £39 are VAT exempt.

3. Anti-Dumping Duty

This duty applies to imports sold below market value in the UK. It protects local businesses from unfair competition. The rate can reach up to 50% of the product’s value.

4. Excise Duty

Applies to imported alcohol and tobacco products. Rates vary by product type.

Alcohol:

Type	ABV	Rate (per litre of pure alcohol)
Beer	3.5%–8.5%	£21.01
Low-alcohol beverages	<3.5%	£9.27
Medium-strong beverages	8.5%–22%	£28.50
Very strong	>22%	£31.64
Sparkling cider	3.5%–5.5%	£9.67
Sparkling cider	5.5%–8.5%	£24.77
Still cider	3.5%–8.5%	£9.67
Wine and others	3.5%–8.5%	£24.77

Tobacco:

Product	Rate
Cigarettes	16.5% + £5.89 per pack of 20
Cigars	£3.68 per 10g
Hand-rolling tobacco	£10.53 per 30g
Pipe and chewing tobacco	£4.85 per 30g
Heated tobacco	£1.82 per pack

How to Calculate Duties and VAT

Example:

Goods: 2000 umbrellas
Unit price: £5
Total value: £10,000
Insurance and freight: £500
Duty rate: 4%
VAT rate: 20%

CIF: £10,500 × 4% = £420 → VAT = £2,100
FOB: £10,000 × 4% = £400 → VAT = £2,000

Duty Thresholds

Category	Threshold
Commercial shipments	£0 (all are taxed)
Personal shipments	Below £135 — exempt from duty
Gifts	£135–£630 — 2.5%

How to Pay Duties and Taxes

Duty Deferment Account — consolidate payments monthly; registration required
Cash Account — manage via the Customs Declaration Service (CDS)
General Guarantee Account — allows multiple guarantees and deferred payments
Immediate Payment — via CDS or CHIEF using a CDSI reference number

Conclusion

Importing into the UK requires clear understanding of duties, VAT, and related fees. Even if your courier handles payment, knowing the rules helps you avoid surprises.