UK Import VAT Calculator

Import VAT = (customs value + customs duty) × VAT rate. Customs value is CIF — goods + freight + insurance to the UK border.

For example, goods at £10,000 with £500 freight and £100 insurance have a customs value of £10,600. With 4% duty (£424), the VAT base is £11,024. At 20% VAT, import VAT is £2,204.80. The rate is set by the commodity code in the UK Global Tariff — usually 20%, sometimes 5% or 0% for specific categories.

PVA lets UK VAT-registered importers account for import VAT on their VAT return instead of paying at the border.

The same amount goes in Box 1 (output) and Box 4 (input), making it cash-neutral for fully taxable businesses. Use PVA by ticking the option on the customs declaration. The Monthly Postponed Import VAT Statement from the CDS portal shows the figures. PVA is optional but most VAT-registered importers use it.

Yes. The VAT base includes customs duty, so VAT is effectively charged on the duty as well as the goods.

For example, on a £10,000 import with £400 duty, VAT applies to £10,400, not £10,000 — adding £80 of VAT on top of the duty itself. The same applies to handling fees and any other charges added to the customs value by HMRC's valuation rules. This is sometimes called "tax on tax".

The basis on which both duty and import VAT are calculated. The default is the transaction value (Method 1) — price paid plus freight and insurance to the UK border.

Excludes UK-side delivery costs, marketing fees, and royalties unless required by the contract. HMRC may reject Method 1 if the price is artificially low or between connected parties — alternative methods then apply. Most commercial imports use Method 1 without issue.

For consumer purchases under £135, VAT is collected by the overseas seller at point of sale, not at the border.

The seller registers for UK VAT and charges 20% on the order. No import VAT at the border, but a UK VAT number must appear on the customer's receipt. Above £135, normal border VAT applies. The threshold is per consignment, not per item — split shipments do not get round it.

Look up the 10-digit commodity code in the UK Global Tariff at gov.uk.

The code determines both the duty rate and any reduced VAT rate or import licence requirement. Most consumer goods have duty rates between 0% and 12%. Textiles and footwear sit higher. Goods under a trade agreement may qualify for preferential or zero duty — but only with valid origin documentation (a statement on origin or a movement certificate).

FOB is the price at the seller's port — buyer pays freight and insurance to the UK. CIF includes those costs in the selling price.

UK customs always uses the CIF-equivalent value as the customs value — if you import FOB, the freight and insurance you pay separately must still be added to compute the customs value. The Incoterms label on the invoice determines who pays which leg, not what HMRC values.

Yes, if you are UK VAT-registered and the goods are used for taxable business activity.

Reclaim either through the C79 monthly import VAT statement (if paid at the border) or through the MPIVS under PVA. Both go in Box 4 of the VAT return. Non-registered importers cannot reclaim — the VAT is a sunk cost. Personal imports also cannot reclaim. Keep the C79 or MPIVS for at least 6 years for compliance checks.

Yes — a Duty Deferment Account (DDA) lets approved importers settle customs duty (and historically VAT) on a single monthly direct debit.

Most large importers run a DDA to keep goods moving without per-shipment payment delays. Apply through HMRC's online service and provide a financial guarantee — usually a bank bond. PVA has reduced DDA usage for VAT but it remains common for duty. The monthly bill is settled on the 15th of the following month.

Commercial samples of negligible value come in VAT-free under HMRC's 'no commercial value' relief. Private gifts up to £39 are also VAT-free.

Above the threshold, normal VAT and duty apply. Business gifts and promotional samples that have commercial value attract the same treatment as ordinary imports. Mark the customs declaration accurately — misuse of gift status is a common audit finding and triggers back-dated VAT plus penalties.

CDS (Customs Declaration Service) is the system every commercial UK import and export declaration is filed through, replacing CHIEF in 2023.

Each commercial consignment needs a CDS declaration filed by the importer or their freight forwarder. The declaration includes the commodity code, customs value, country of origin, duty calculation, and PVA election. Errors trigger holds at the border. Most importers use a customs broker — direct filing is complex enough that HMRC publishes a multi-volume tariff manual to support it.

No — import VAT applies only to goods. Services from overseas suppliers to UK businesses use the reverse charge mechanism.

Under reverse charge, the buyer accounts for both output VAT (Box 1) and input VAT (Box 4) on the same return — cash-neutral if fully recoverable. Unregistered businesses receiving overseas services may need to register if the value pushes them over the threshold. Digital services to UK consumers are typically charged with UK VAT by the overseas supplier under the registered non-resident rules.