How do I work out the UK import VAT due on my goods?

March 15, 2019

Work out the value of the goods in pounds sterling by using the foreign currency exchange rate that applies at the time of the sale. HMRC publishes exchange rates on a monthly basis.

1. Work out the total value of all items in your parcel The total value of an item includes:

  • the total price paid for the item
  • all postage, packaging and insurance for the parcel The total value does not include any duty you pay for the goods in your own country.

2. Find the right rate of UK import VAT to use

The rate of UK import VAT charged depends on what the item is.

You have to pay a standard rate of UK import VAT on most items. This is currently 20% of its value.

Some goods are charged at a reduced rate. These include items such as children’s car seats. The reduced rate is currently 5% of the value of your goods.

There are also goods that are still VAT-taxable but the rate of UK import VAT is 0%. This is known as zero-rate. You must still submit a report even if no UK import VAT is due. Examples of this include most food and children’s clothes.

Get a full list of reduced or zero-rated goods.

3. Calculate the UK import VAT you will need to pay

UK import VAT is charged as a percentage of each item in your parcel. It is calculated on the cost of the goods plus shipping, insurance and incidental costs.

  1. Use the UK import VAT rate that applies to each of the goods in your parcel.
  2. Multiply the value of your item by the correct UK import VAT percentage rate.
  3. Add the amounts calculated for your items together.

If a parcel contains goods with multiple UK import VAT rates, HMRC would expect a fair and reasonable payment for each of the shipping, insurance and incidental costs to the appropriate UK import VAT rates.