UK import duty and VAT on goods from China

The two charges at the border

When commercial goods arrive from China you normally pay two things: import duty and import VAT.

Import duty is a percentage set by your product's commodity (HS) code — commonly in the 0–12% range, though some goods are higher or zero-rated. Import VAT is charged at the standard UK rate of 20%.

How it is calculated

Duty is charged on the customs value of the goods, which typically includes the product cost plus freight and insurance to the UK.

VAT is then charged on that customs value plus the duty. In other words, VAT is calculated on the goods, the shipping and the duty combined — which is why the order of the sum matters.

The £135 threshold — often misunderstood

The well-known £135 figure mainly governs how VAT is collected on low-value consignments (at the point of sale rather than at the border); it is most relevant to small e-commerce parcels.

For normal commercial bulk orders, duty and import VAT are accounted for at import regardless of value. The threshold is not a duty-free allowance for business shipments.

Reclaiming the VAT

If your business is VAT-registered, import VAT is generally recoverable — either through your monthly import VAT certificate (C79) or via Postponed VAT Accounting, which lets you account for import VAT on your VAT return instead of paying it upfront.

This is why a proper, standard UK VAT invoice matters: it keeps the VAT reclaimable and your bookkeeping clean. Duty, by contrast, is a real cost and is not reclaimable.

What you need in place

You will need an EORI number to import, the correct commodity code for each product, and accurate paperwork (commercial invoice, packing list). A customs agent or a door-to-door sourcing service can handle the declaration for you.

Because duty rates depend entirely on the commodity code, always confirm the code and current rate on the HMRC Trade Tariff — or ask us to check before you commit to an order.

A worked example, end to end

Say you buy £8,000 of goods and pay £1,200 for sea freight and insurance to the UK border. The customs value is £9,200. If your commodity code carries a 4% duty rate, that is £368 of duty. Import VAT is charged on the customs value plus the duty — 20% of £9,568 — which is £1,913.60.

So the goods that cost £8,000 need £11,481.60 to land. If you are VAT-registered, the £1,913.60 comes back through your VAT return, and your real cost is £9,568. If you are not registered, all of it is cost. That single difference changes which products are worth importing at all.

Note that the value import VAT is charged on is wider than this example shows: it also takes in incidental costs up to the goods' first destination in the UK, such as customs clearance charges, handling, storage and demurrage. Budget a little above the simple calculation.

Where the duty rate actually comes from

There is no general 'import duty from China' rate. The rate is set by your commodity code, and it varies from 0% to well over 10% depending on what the product is and what it is made of. Textiles and footwear sit at the higher end; many electronics and machine parts are at 0%.

This is why classification is worth getting right rather than delegating to whoever files the entry. Our commodity code guide covers how to find and check yours, and the free import duty calculator will look up the rate and do this arithmetic for you.

Anti-dumping duty: the charge that dwarfs the others

Some goods of Chinese origin carry anti-dumping or countervailing duty on top of the normal rate, and it can be far larger than the duty itself — sometimes tens of percent. Ceramic tiles, aluminium products, certain steel, bicycles and solar equipment are recurring examples.

It is not visible from the headline duty percentage, so it catches people out after the goods have shipped. Check the measures listed against your specific code for Chinese origin before you commit, not after.

Postponed VAT accounting, and why it is usually the right choice

If you are VAT-registered you can use postponed VAT accounting, which means you account for the import VAT on your return rather than paying it at the border and reclaiming later. There is no application — you give your VAT and EORI numbers to whoever handles your customs entry and tell them to select it.

The benefit is cashflow rather than tax: the money never leaves your account. On regular shipments that can be thousands of pounds of working capital freed up. You then download the monthly statement from your customs account to support the return.

Who has to be the importer for any of this to work

None of the reclaim mechanics work unless you are the importer of record on the declaration. If a supplier or forwarder ships DDP and declares in their own name, no C79 or postponed VAT statement is ever issued to you and the 20% becomes an unrecoverable cost.

That is common enough on China imports to be worth its own guide — see the DDP import VAT trap. Before accepting an all-in delivered price, ask whose EORI will appear on the declaration.

Budgeting for it properly

Treat duty and VAT as part of the landed price from the first quotation, not as an arrival surprise. A supplier's FOB price tells you very little about what the goods cost you in the UK.

For a repeat product it is worth building the whole calculation once — goods, freight, duty, VAT, and any anti-dumping — and then reusing it. That number is what you compare against your current UK supplier, and it is what our free price comparison gives you.