When your goods enter the UK, customs duty is the charge that catches people out, because, unlike import VAT, it is usually a real cost you cannot get back. So the value you declare, the code you classify under, and whether your goods qualify for preference all feed straight into what you pay. Getting the customs side right from the start keeps your goods moving and protects your margin.
In short: UK customs duty is charged when your goods are imported, worked out as the customs value of the goods multiplied by the duty rate for their commodity code. Unlike import VAT, duty is normally a cost you cannot reclaim. Goods of EU preferential origin can often be imported at 0% duty under the UK-EU Trade and Cooperation Agreement, if the rules of origin are met and the claim is made correctly.
Three things decide your duty:
Import VAT is charged separately, on top, and is usually recoverable, so duty and import VAT are two different things. We explain the VAT side on import VAT and postponed VAT accounting.
Moving goods into Northern Ireland works differently again. See moving goods into Northern Ireland.
Because duty is generally not reclaimable, it lands on your cost base. A percentage point here or there on every consignment adds up quickly. And errors cut both ways:
That is why the value, the code and the origin are worth getting right first time.
Often, yes. The most common route for German and Austrian businesses is preferential origin: if your goods originate in the EU under the UK-EU Trade and Cooperation Agreement, and you hold the right proof, they can usually be imported at 0% duty. Origin is not automatic: being shipped from the EU is not the same as originating there, so it needs verifying. See preference and origin.
Where certainty matters, HMRC offers Advance Rulings that legally confirm your classification or valuation before you import.
Author: Michelle Lawrence (customs).
Reading time: about 4 minutes.
Sources (verified 12 Aug 2026): duty rates and commodity codes: UK Trade Tariff; customs value: Working out the customs value of your imported goods; preferential origin: Claiming preferential rates of duty between the UK and EU.
No. Duty is a charge based on the goods and their origin and is usually a cost. Import VAT is a separate charge, usually recoverable if you are UK VAT registered.
Often not. EU-origin goods can qualify for 0% duty under the UK-EU agreement, if the rules of origin are met and you hold valid proof of origin.
The importer of record. On DDP terms that is you, the overseas seller.
Yes. That is one of the reasons overseas businesses come to us rather than a VAT-only adviser. We work with your customs agent to ensure that you get things right first time.
Tell us what you import and where it is made, and we will tell you how the duty works for you and whether preference can bring it down. Contact our customs team.
Associate Director
VAT
Director
Head of Indirect Tax & HR
