DDP from China: the import VAT trap in an all-in price
A DDP quote looks like it covers everything. If you are not the importer of record you never get the evidence to reclaim the import VAT — and 20% becomes a real cost.
Why DDP looks so attractive
Delivered Duty Paid means the seller quotes one number and handles everything: freight, UK customs, duty and import VAT, delivered to your door. For a first-time importer that is enormously appealing — no forwarder to appoint, no customs entry to worry about, one invoice.
Chinese suppliers and the freight lines that serve them push DDP hard for exactly that reason. The quote is simple, it is often a little cheaper than arranging your own freight, and nothing about it looks like a tax problem.
The problem: you are probably not the importer
Under DDP the seller is responsible for clearing the goods, so the customs declaration is usually made in the name of the seller or, more often, the freight forwarder's own UK entity. Whoever is named on that declaration, with their EORI, is the importer of record.
That matters for two separate reasons. First, the right to reclaim import VAT follows ownership of the goods rather than the name on the declaration, and a forwarder clearing goods it does not own cannot reclaim the VAT either — so there is no reclaim sitting with them for you to ask for. Second, under DDP the seller normally keeps title until delivery, which means that at the moment of import you may not be the owner at all.
No C79, and the reclaim becomes an argument
The evidence HMRC expects for reclaiming import VAT is the C79 certificate, or a postponed VAT accounting statement if you use PVA. Both are generated from the customs declaration and issued only to the party named as importer, against their EORI.
So if you were never named, no C79 or PVA statement appears in your account and you have no routine evidence for your VAT return. HMRC will consider alternative evidence that you owned the goods and that import VAT was paid, but that is discretionary and treated as exceptional — it is not something to plan around. In practice the 20% was paid by somebody else, and getting it back turns into an argument rather than a routine deduction.
What it actually costs
Take a £10,000 order with £1,000 of freight. The customs value is around £11,000; at a 4% duty rate that is £440 of duty, and import VAT at 20% of £11,440 is £2,288.
If you are VAT-registered and you are both the owner and the importer, that £2,288 flows through your VAT return and costs you nothing in the end. Under a DDP arrangement where a forwarder is named, it is baked into the price you paid and you have no C79 to support a deduction. A DDP quote that looked £300 cheaper than arranging your own freight can therefore cost you around £2,000.
The fix is a sentence in the purchase order
You do not have to give up the convenience. Ask the supplier or forwarder to arrange the whole shipment but to declare it in your name, using your EORI and your VAT number, and agree that in writing before the goods move. HMRC allows a third party to handle the mechanics as long as the declaration names you.
In practice that usually means shipping DAP rather than DDP: the supplier still delivers, you are the importer of record, and you get the C79 or the PVA statement. If a forwarder refuses to declare in your name, that tells you what their arrangement actually is.
Questions worth asking before you accept a DDP quote
Whose EORI will appear on the customs declaration? Will I receive a C79 or a postponed VAT accounting statement in my own VAT number? What commodity code will be declared, and at what value?
The last question matters too: because the forwarder is bearing the duty under DDP, they have an incentive to declare a low value or a convenient code. If that declaration is wrong, it is still an entry made about your goods.
How we handle it
We quote a landed price that includes freight, duty and VAT so you get the simplicity of DDP, but the customs entry is made in your name, so the import VAT is recoverable in the normal way if you are VAT-registered.
If you are not VAT-registered the calculation is different — the import VAT is a real cost either way — and we will say so rather than selling you a structure that does not help.
Frequently asked questions
Can I reclaim import VAT on a DDP shipment?
The right follows ownership of the goods, but the evidence follows the declaration. Under DDP the entry is usually made in the seller's or the forwarder's name, so no C79 or postponed VAT statement is issued to you. HMRC can accept alternative evidence that you owned the goods and that import VAT was paid, but it is discretionary and exceptional — so treat import VAT on a DDP shipment as money you may not get back.
What is a C79?
The certificate HMRC issues as evidence of import VAT paid. It is generated from the customs declaration and issued only to the party named as importer, against their EORI. If you were not named, you never receive one.
Is DAP better than DDP?
For a VAT-registered UK buyer, usually yes. Under DAP you are the importer of record, so you receive the C79 or the postponed VAT accounting statement and the import VAT is recoverable. The supplier can still arrange the shipping.
Can I keep DDP convenience and still reclaim the VAT?
Yes, if the declaration is made in your name using your EORI and VAT number. Agree that in writing before the goods move. A third party can handle the mechanics; what matters is who is named as importer.
Does this matter if I am not VAT-registered?
The import VAT is a genuine cost to you either way, so the reclaim argument does not apply. What still matters is that the declaration about your goods is accurate — value and commodity code included.