UK import duty is a tax levied by HMRC on goods imported into Great Britain from countries outside the UK, calculated as a percentage of the customs value of the imported goods. Understanding how to calculate your import duty liability before placing an order from China or Vietnam is essential for UK businesses, as it directly affects total landed cost and the financial viability of any sourcing decision.
For UK businesses sourcing from China, import duty is one of the most significant and frequently overlooked costs in the supply chain. Many first-time importers focus exclusively on the factory price and freight cost, only to be surprised by an unexpected duty bill when their goods arrive at Felixstowe or Southampton. Import duty rates on Chinese goods can range from 0% to over 12% depending on the product category — and for high-volume orders, even a 4–5% duty rate can represent thousands of pounds in additional cost that wipes out the margin advantage of sourcing from Asia.
Since Brexit, the UK has operated its own Global Tariff schedule, separate from the EU’s Common External Tariff. This means UK duty rates may differ from EU rates, and UK importers can no longer use EU trade agreements to reduce duty on goods from countries such as Vietnam (the UK has its own UKVFTA). Getting import duty right is not just about cost management — it is a legal obligation. Under-declaring the customs value of goods to HMRC is a criminal offence, and HMRC carries out audits and post-clearance amendments that can result in back-payments, penalties, and interest charges.
UK import duty is calculated using the following formula:
The key steps are:
| Product Category | Typical UK Duty Rate (China) | UKVFTA Rate (Vietnam) | Notes |
|---|---|---|---|
| Clothing & Apparel | 12% | Reduced / 0% (staging) | UKVFTA can significantly reduce duty on qualifying Vietnamese garments |
| Footwear | 8–17% | Reduced (staging) | Rates vary by material (leather, synthetic, textile) |
| Electronics & Consumer Tech | 0–3.7% | 0–3.7% | Many electronics attract 0% duty; check exact code |
| Furniture & Homeware | 0–6.5% | Reduced / 0% | Varies significantly by material and product type |
| Plastic & Rubber Products | 2.7–6.5% | Reduced | Depends on product function and HS chapter |
| Toys & Games | 0–4.7% | 0–4.7% | Many toy categories attract 0% duty |
| Sports & Fitness Equipment | 0–4.7% | Reduced / 0% | Varies by equipment type |
Note: Duty rates are indicative based on the UK Global Tariff. Always verify the exact rate using your 10-digit commodity code at gov.uk/trade-tariff.
A common mistake UK importers make is calculating duty on the FOB (factory or port) value of the goods alone. HMRC requires duty to be calculated on the CIF value — Cost + Insurance + Freight to the first UK port of entry. If you are buying FOB Shanghai and your sea freight to Felixstowe costs £2,500, that freight cost must be added to your customs value before applying the duty rate. Failing to do so constitutes an under-declaration to HMRC.
| Item | Value (£) |
|---|---|
| Cost of goods (FOB China) | £15,000 |
| Sea freight to Felixstowe | £1,800 |
| Cargo insurance | £120 |
| CIF (Customs) Value | £16,920 |
| Import Duty (12% — e.g. clothing from China) | £2,030 |
| Import VAT (20% on £18,950) | £3,790* |
| Total Landed Cost | £23,740 |
*Import VAT is reclaimable by VAT-registered businesses on their next VAT return. The effective additional cost for VAT-registered importers is therefore £19,950 before VAT recovery.
We help you identify the correct 10-digit commodity code for your product before you order, so you can accurately forecast duty costs and avoid mis-classification penalties from HMRC.
For eligible product categories, we compare the landed cost of sourcing from China versus Vietnam, helping you identify whether switching to a UKVFTA-qualifying supplier could generate significant duty savings.
Before you commit to a sourcing programme, we produce a full landed cost model including factory price, freight, duty, VAT, and last-mile delivery — so you know your true margin from day one.
We work with a vetted network of UK-licensed customs brokers and freight forwarders who ensure your import declarations are filed correctly, your duty is calculated accurately, and your VAT is recoverable.
The UK Trade Tariff tool at gov.uk/trade-tariff allows you to search for your product and find its 10-digit commodity code. You can search by product description or browse the HS chapter structure. It is important to identify the correct code — not the closest approximation — as different commodity codes within the same product family can attract very different duty rates. For example, different types of footwear (leather upper, textile upper, rubber upper) each have their own code with different duty rates. If you are uncertain about the correct code for your product, a UK-licensed customs broker can provide a Binding Tariff Information (BTI) ruling from HMRC that legally confirms the correct classification.
Yes — for many product categories, sourcing from Vietnam can significantly reduce UK import duty under the UK-Vietnam Free Trade Agreement (UKVFTA). The UKVFTA, which came into force in January 2021, provides preferential (reduced or zero) duty rates for goods that genuinely originate in Vietnam and meet the agreement’s rules of origin requirements. The most impactful categories include clothing and apparel (where China attracts 12% duty), footwear, furniture, and certain electronics. However, goods must meet the rules of origin criteria — simply shipping Chinese goods via Vietnam does not qualify. The products must be substantially manufactured in Vietnam using Vietnamese or UK inputs.
Import duty and import VAT are two separate charges on imported goods. Import duty is a tariff charged by HMRC based on the type of product (its commodity code) and its country of origin — it is a one-off cost that is never recoverable. Import VAT is a 20% tax charged on the duty-inclusive customs value of goods entering the UK — but unlike import duty, it is fully reclaimable by VAT-registered businesses on their next VAT return. For a VAT-registered UK business, the true additional cost of importing is therefore the import duty only — not the import VAT, which is simply a cash flow consideration. Non-VAT-registered businesses (e.g. those below the £85,000 VAT threshold) cannot reclaim import VAT, making it a genuine cost.
HMRC has broad powers to investigate and penalise importers who under-declare the value of goods or mis-classify products to achieve a lower duty rate. Penalties range from a percentage of the unpaid duty (for non-deliberate errors) to criminal prosecution for deliberate fraud. HMRC also conducts post-clearance audits on importers’ records, which can result in back-duty demands going back up to three years, plus interest. Common errors include using an incorrect commodity code, omitting freight and insurance from the customs value, under-valuing goods by declaring below the invoice price, and failing to account for royalties or licence fees that form part of the transaction value.
Genuine commercial samples of negligible value — such as single units sent by a supplier for evaluation — may be imported duty-free under the UK’s relief for commercial samples. However, the samples must be clearly marked as samples, have no commercial value, and be used solely for assessment purposes. Samples that have commercial value (i.e. could be sold) are subject to the same duty and VAT rules as regular commercial imports. If you are ordering evaluation samples prior to a production run, your supplier should clearly mark the shipment as “samples — not for resale” and declare a nominal value on the commercial invoice. Be aware that couriers such as DHL and FedEx will still file a customs declaration and may charge an import VAT and duty amount regardless.
