Before you commit to your first order from China, make sure you understand what it's really going to cost. Duties, VAT, freight, and all the fees in between — explained clearly.
In summary: When importing from China to the UK, your landed cost includes four layers on top of the factory price — freight, import duty (charged by HMRC), VAT at 20%, and miscellaneous port and clearance fees. This guide breaks down each cost with real examples so you can price your products accurately before placing an order.
Welcome back to the Epic Sourcing blog, where we break down the bits of importing that most people only discover after they've made an expensive mistake.
Today, we're talking money. Specifically, the money you'll hand over to HMRC, your freight forwarder, and the courier before a single unit reaches a British warehouse.
Here's a tale as old as time. A UK entrepreneur finds a brilliant product on Alibaba. The factory price is £3.00 per unit. They order 500 units. They think: "I'll sell these for £12.99 — lovely margins." Then the shipping invoice lands. Then the customs duty bill. Then the VAT demand. Suddenly, their £3.00 product is costing £6.50 before they've sold a single one.
Sound familiar? We hear this story every week.
The good news: none of this is complicated once you understand how it works. The costs are real, but they're predictable — and when you know them upfront, you can price your products properly and protect your margins. For more background on the end-to-end importing process, our complete guide to importing from China to the UK is a great place to start.
So let's break down the costs.
When you import from China to the UK, there are four main cost layers on top of your factory price:
1. Freight — getting your goods from China to the UK.
2. Import Duty — the tax HMRC charges on your goods.
3. VAT — applied on top of the goods value plus duty.
4. Other fees — customs clearance, port handling, delivery to your door.
Let's go through each one.
You have two main options: sea freight and air freight.
Sea freight is the workhorse of international trade. It's slow — typically 25 to 35 days from China to the UK — but it's the most cost-effective option for larger orders. It's priced either per container or per cubic metre (CBM).
Full Container Load (FCL): You fill an entire 20ft or 40ft container. Best for large orders. A 20ft container typically holds around 25–28 CBM.
Less than Container Load (LCL): Your goods share space with other shipments, charged per CBM. Good for smaller orders.
Rough sea freight costs (China to UK, 2026): LCL approximately £80–£150 per CBM; FCL (20ft container) approximately £1,000–£2,500. Market rates fluctuate — always get current quotes.
Sourcing Hack #5: Work with a freight forwarder who specialises in China-UK routes. They'll get you better rates and handle the documentation (bill of lading, packing lists, customs entry) that you'd otherwise have to figure out yourself. We can recommend trusted forwarders if you're starting out — just get in touch.
Air freight is fast — typically 5 to 10 days — but expensive. It's charged per kilogram and is only cost-effective for small, high-value, or time-sensitive shipments. Rough costs (2026): approximately £4–£8 per kg. A 100kg shipment will cost you £400–£800 in freight alone.
Import duty (also called customs duty) is a tax charged by HMRC when your goods enter the UK. The rate depends entirely on what your goods are — each product type has its own commodity code and duty rate.
Common UK import duty rates for goods from China:
Clothing and apparel: 12% | Footwear: 6.5–17% | Electronics (most): 0–3.7% | Plastics and plastic products: 4–6.5% | Supplements and food products: 0–6.5% | Furniture: 0–5.6%
Sourcing Hack #6: Look up your product's commodity code on the UK Global Tariff before you commit to an order. Visit trade-tariff.service.gov.uk and search for your product. This gives you the exact duty rate and any other requirements (CE marking, product testing). Do this before your goods are sitting in a warehouse in Felixstowe.
Import duty is calculated as a percentage of your Customs Value — typically your goods value plus international freight. This is called the CIF value (Cost + Insurance + Freight).
Example:
Goods value: £3,000
Freight cost (sea): £500
CIF value: £3,500
Duty rate (e.g., clothing at 12%): £420
Import duty owed: £420
Here's where a lot of first-time importers get caught out. VAT is charged on the total of your goods value + freight + import duty. Yes, you pay VAT on top of the duty.
If you're VAT-registered in the UK (which you should be once your turnover exceeds £90,000, or you can register voluntarily earlier), you can reclaim this VAT as input tax on your VAT return. So it's not a permanent cost — but it is a cash flow hit.
VAT rate: Standard rate is 20%.
Using our example above:
CIF value: £3,500
Import duty: £420
Total for VAT purposes: £3,920
VAT at 20%: £784
Total landed cost (goods + freight + duty + VAT): £4,704
If you're VAT registered, you'll reclaim the £784 on your next return. If you're not, that £784 is a real, unrecoverable cost.
Sourcing Hack #7: If you're building a product-based business and importing regularly, consider registering for VAT voluntarily before you hit the threshold. The ability to reclaim import VAT makes a meaningful difference to your cash flow. Speak to your accountant — for most importers, it's a no-brainer.
Beyond freight, duty, and VAT, there are a handful of other costs worth knowing:
Customs Entry / Clearance Fee: Your freight forwarder charges a fee to file your customs entry (the C88 declaration) with HMRC. Typically £50–£150 per shipment.
Port Handling / Terminal Handling Charges: Charged by the port for receiving and handling your container. Typically £100–£300.
Inspection / Examination Fees: HMRC occasionally selects shipments for physical inspection. If yours is selected, you'll pay the costs (typically £300–£600). Not common, but worth knowing.
Drayage / Inland Delivery: Moving your container from the port to your warehouse or 3PL. Varies hugely by distance — £200 in Northampton or £500 in Edinburgh.
Let's say you're importing 500 gym bags from a factory in Guangzhou at £8 per unit (£4,000 total). Here's what your landed cost looks like:
Factory price (500 × £8): £4,000
Sea freight (LCL, ~3 CBM): £360
Import duty (bags at 3.7%): £160
UK VAT at 20% (if not VAT-registered): £904
Customs clearance fee: £100
Port handling: £150
Inland delivery to warehouse: £250
Total landed cost: £5,924
Cost per unit: £11.85
That £8 gym bag is now £11.85 per unit at your warehouse door. Before storage, before fulfilment, before marketing. You needed to know that before you set your retail price.
New to importing and not sure you're working with a trustworthy supplier? Read our safety checks before your first Alibaba purchase, and learn how UK small businesses can cut costs by sourcing direct from factories.
Order more, less often. LCL freight rates per unit drop as your order volume increases. Consolidating shipments saves money.
Use your own freight forwarder. Supplier-arranged freight is almost always overpriced. Always get your own quotes.
Understand your commodity codes. Some products qualify for preferential duty rates under UK trade agreements. A freight forwarder or customs broker can advise.
Plan around peak season. Freight rates spike in Q3 and Q4. If you can, place orders earlier in the year.
Work with a sourcing agent. An experienced sourcing agent in China can negotiate better factory pricing, consolidate shipments, and manage QC — reducing the risk of costly mistakes that eat into your margins.
You don't legally need one, but it's strongly recommended for your first shipment. A freight forwarder or customs broker will handle your customs entry (C88 declaration), duty calculation, and port liaison. The fee is typically £50–£150 per shipment and is well worth it.
Sea freight typically takes 25–35 days from China to UK ports (mainly Felixstowe, Southampton, and London Gateway). Air freight takes 5–10 days but costs significantly more. Most UK importers use sea freight for regular stock replenishment and air freight only for urgent or high-value shipments.
Yes — but with care. Many Alibaba listings are trading companies, not factories. Our guide to importing from Alibaba to the UK covers the key checks to run before placing an order.
UK entrepreneurs commonly import clothing, gym equipment, homeware, supplements, electronics accessories, and packaging. If you're thinking about launching a brand around any of these, our White Label Package and Private Label Package are designed to help you source the right products from verified factories.
Start with our in-depth guide on finding reliable manufacturers in China. And if you're thinking about launching your own branded product — like white label supplements — the process starts with finding the right factory.
We know this feels like a lot. But here's the thing — once you've done it a few times, importing from China becomes completely routine. The costs become predictable. You build them into your pricing model. And suddenly, what felt like a financial minefield becomes a genuine competitive advantage.
At Epic Sourcing, we help British businesses navigate exactly this — from finding the right factory in China to managing freight, quality control, and customs documentation. We've helped hundreds of UK importers go from "where do I even start?" to receiving their first container with confidence.
If you'd like a hand working out the true landed cost of your product before you commit to a factory — or if you want us to find you the right supplier in the first place — book a free strategy call or email hello@epicsourcing.co.uk. We'll sort it out together.
TK Wang, Founder & Director @ Epic Sourcing
