The value you declare when your goods enter the UK drives the duty you pay. And if you move goods within your own group, that same value has to line up with your transfer pricing. Get the two out of step and you have a problem on both sides: customs on one, corporation tax on the other.
In short: most imports are valued using Method 1, the transaction value, the price paid for the goods when sold for import to the UK. It is used for over 90% of dutiable imports. Where you move your own goods within a group, or the price is influenced by the relationship between buyer and seller, the customs value needs care, and it must be consistent with your transfer pricing. A customs value and a transfer-pricing policy that contradict each other is a risk to both.
UK law sets out six valuation methods, to be tried in order. Method 1, the transaction value, is the price actually paid or payable for the goods sold for import to the UK, with certain additions (for example transport to the UK border, and some royalties or “assists”). Over 90% of dutiable imports use it.
If there is no sale, or Method 1 cannot be used, you work down the remaining methods in turn.
The value needs a closer look when, for example:
These are exactly the situations our clients are in, so they are worth getting right rather than assuming Method 1 always applies.
If you are part of a group, the price at which goods move between group companies is a transfer-pricing matter for corporation tax, and the same figure underpins your customs value. The two cannot sensibly diverge:
We consider that interaction, so it is joined up, working with the corporation-tax side where a fuller transfer-pricing review is needed, rather than leaving customs and tax to contradict each other.
Where the valuation is finely balanced and you want certainty, you can apply to HMRC for an Advance Valuation Ruling: a legally backed decision confirming the correct valuation method before you import. HMRC issues it within 90 days, and it gives you a defensible position.
Author: Michelle Lawrence (customs).
Reading time: about 4 minutes.
Sources (verified 12 Aug 2026; over-90% figure verified by Michelle Lawrence): Customs valuation: Method 1 (transaction value); the over-90% figure: Prepare to work out the customs value of your imported goods; Working out the customs value of your imported goods; Apply for an Advance Valuation Ruling.
Not automatically Method 1, because there may be no sale for export at the point of import. This is a common situation for DDP sellers holding UK stock, and one to get right. Talk to us.
It can. If an adjustment changes the value of goods already imported, there may be a customs consequence to deal with, and with time limits for correction, early action is important.
We join the two up. We deal with the customs valuation and bring in the corporation-tax team where a deeper transfer-pricing review is needed.
If you move goods within your group, or you are not sure your customs value and transfer pricing agree, contact our customs team.
Associate Director
VAT
Director
Head of Indirect Tax & HR
