Import VAT and Customs Duty Calculator: The Landed Cost of Goods From Abroad
When you buy goods from outside the UK, the price on the website is rarely the price you end up paying. On top of the goods and the shipping, the border can add customs duty, import VAT and a courier handling fee. Added together these give the landed cost, the true amount it takes to get the goods to your door. The calculator below works out each charge and the total, and the guide explains how the numbers are built and where people go wrong.
What is the landed cost of an import?
The landed cost is everything it takes to get goods from a seller abroad to your address in the UK. It starts with the price of the goods and the shipping, then adds the charges the border applies. There are three possible border charges: customs duty, import VAT, and, for a few goods like alcohol and tobacco, excise duty. On top of those a courier or Royal Mail usually adds a handling fee for collecting the charges on your behalf. Knowing the landed cost before you buy is the difference between a bargain and a nasty surprise on the doormat.
Import VAT and customs duty calculator
Enter the price of the goods, the shipping and insurance to the UK, your duty rate and the VAT rate. The calculator returns the customs value, the customs duty, the import VAT and the total landed cost. If you do not know your duty rate, look up the commodity code for your goods on the government Trade Tariff service.
Import VAT is charged on the customs value plus the customs duty. Your duty rate depends on the commodity code, so check the Trade Tariff for your goods.
How the charges are worked out
The charges are built in a set order, and each one feeds the next. Getting the order right is what makes the total correct.
- Start with the price you paid for the goods, then add the cost of shipping and insurance to the UK. That combined figure is the customs value.
- Apply your customs duty rate to the customs value. The rate comes from the commodity code for your goods on the Trade Tariff and can be anything from nought percent upward.
- Add the duty to the customs value, then charge VAT on that combined figure, normally at 20 percent. This is why the VAT lands on the duty as well as the goods.
- Add the duty, the import VAT and any courier handling fee to your original costs. The result is the landed cost.
| Step | Amount |
|---|---|
| Goods value | £1,000.00 |
| Shipping and insurance | £150.00 |
| Customs value | £1,150.00 |
| Customs Duty at 4% | £46.00 |
| Import VAT at 20% | £239.20 |
| Courier handling fee | £12.00 |
| Total landed cost | £1,447.20 |
What counts as the customs value?
The customs value is not just the price of the goods. It is the price you paid plus the cost of transport, insurance and handling to get the goods to the UK border. Customs officers call this the transaction value method, and it is the figure that both the duty and the import VAT are built from. A common mistake is to treat the sticker price as the customs value and then wonder why the final bill is higher. If the seller charged you for shipping and insurance, that cost is part of the value the border taxes.
How much customs duty will you pay?
Customs duty depends on what the goods are and where they were made. Every type of product has a commodity code, and that code sets the duty rate for goods from a given country. Rates start at nought percent for many products and climb from there, so there is no single import duty figure. You find your rate by searching your goods on the government Trade Tariff service. Two rules are worth remembering. There is usually no customs duty on goods in a consignment worth £135 or less, and very small amounts of duty, around £9 or less, are normally not collected. Duty is charged on the customs value, which already includes your shipping.
How import VAT is calculated
Import VAT is charged at the same rates as VAT inside the UK, so 20 percent for most goods, 5 percent for a few, and nought percent for things like most books and children’s clothing. The catch is the value it is charged on. Import VAT applies to the customs value plus the customs duty, and it also picks up any onward delivery and handling to the first place the goods reach in the UK. Because the duty is inside the VAT base, a higher duty rate quietly raises your VAT as well. If you use our VAT calculator to add or remove VAT on a plain price, this is the same 20 percent applied to a wider figure.
The £135 rule for low value parcels
Goods sent to a UK consumer in a consignment worth £135 or less follow a different path. Instead of import VAT at the border, the seller or the online marketplace charges UK VAT at the checkout, and there is no customs duty. You do not pay the VAT twice. The £135 is measured on the intrinsic value of the goods alone, so it leaves out shipping, insurance and taxes, and it applies to the whole consignment rather than to each item. Go a penny over £135 and the normal border rules take over, with import VAT and any duty applied in full.
| Consignment | What happens |
|---|---|
| £135 or less, goods only | Seller or marketplace charges VAT at the point of sale, no duty or import VAT at the border |
| Over £135 | Import VAT and customs duty are charged at the border |
| Any excise goods | Excise duty and VAT always apply, whatever the value |
Do you pay VAT and duty on gifts?
Gifts sent between private people get a little more room, but they are not automatically free. A gift worth £39 or less carries no import VAT. Above £39 import VAT is due, and once the value passes £135 customs duty can apply too, though a reduced gift rate of 2.5 percent may be used on gifts valued up to £630. None of this covers alcohol or tobacco, which are taxed whatever the value. To count as a gift the item has to be sent from one private individual to another, with no money changing hands, so business samples and online orders do not qualify.
| Gift value | Import VAT | Customs Duty |
|---|---|---|
| £39 or less | None | None |
| Over £39 up to £135 | Due | None |
| Over £135 | Due | Due, a 2.5% gift rate may apply up to £630 |
Excise goods: alcohol and tobacco
Alcohol, tobacco and similar products sit outside every low value shortcut. They always attract excise duty and import VAT no matter how small the order, and the £135 rule and the small duty waiver do not help. If you are bringing in wine, spirits or cigarettes the landed cost will include the excise duty on top of the customs duty and VAT, so these imports are far more heavily taxed than ordinary goods.
Delaying import VAT with postponed accounting
If your business is registered for VAT, you do not have to pay the import VAT in cash at the border at all. You can account for it on your VAT return instead, declaring it and reclaiming it on the same return so the real cost is nothing for a fully taxable business. This is called postponed VAT accounting, and our full guide on postponed VAT accounting explains how to set it up and which boxes to complete. The duty still has to be paid, but the VAT stops being an upfront cost. You report the figures through your usual VAT return.
Courier handling fees are not a tax
When a parcel is held for charges, the courier or Royal Mail adds a handling fee for clearing it and collecting the money. This is a commercial charge, not a government tax, and it is separate from the duty and VAT. Royal Mail charges around £8, Parcelforce around £12, and other couriers set their own fees, which can be higher on larger shipments. It is a small amount next to the tax on a big order, but on a cheap item the handling fee can cost more than the goods, which is why an inexpensive parcel from abroad sometimes feels so poor value once it lands.
Mistakes people make with import charges
- Treating the sticker price as the customs value and forgetting that shipping and insurance are taxed too.
- Thinking import VAT is only charged on the goods, when it is charged on the goods, the shipping and the duty together.
- Assuming that under £135 means no tax, when the seller has already charged VAT at the checkout.
- Measuring the £135 limit on the price including postage rather than on the value of the goods alone.
- Reading £135 as a per item figure, when it applies to the whole consignment.
- Believing all gifts are tax free, when only gifts of £39 or less escape import VAT.
- Mistaking the courier handling fee for a government charge.
Just need to add or take VAT off a price? Our free tool does it at any rate in a couple of clicks.
Open the VAT calculatorFrequently asked questions
Add the goods and the shipping to get the customs value, apply your duty rate to that, then charge VAT on the customs value plus the duty. Add the duty, the VAT and any courier handling fee to your original costs and you have the landed cost. The calculator above does all of this for you.
Yes. The value that import VAT is charged on includes the transport and insurance to the UK, plus the customs duty. So the shipping is taxed, and so is the duty, which is why the final figure is more than 20 percent of the goods price on its own.
There is normally no customs duty on a consignment of goods worth £135 or less. VAT still applies, but for these low value orders the seller or the marketplace charges it at the checkout rather than the border collecting it from you. Excise goods like alcohol and tobacco are the exception and are always taxed.
There is no single rate. Duty depends on what the goods are, set by their commodity code, and on the country they came from. Many products are nought percent, while others run to double figures. Look up your item on the government Trade Tariff service to find the exact rate, then put it into the calculator.
A genuine gift worth £39 or less is free of import VAT. Above £39 import VAT is due, and above £135 customs duty can apply as well. The item has to be sent from one private person to another with nothing paid for it, and alcohol and tobacco are taxed at any value.
The handling fee is what the courier or Royal Mail charges for clearing your parcel through customs and collecting the tax on your behalf. It is a commercial fee, not a government charge, and it is on top of the duty and VAT. Royal Mail is around £8 and Parcelforce around £12, with other couriers setting their own.
You should never pay it twice. On low value orders the VAT is charged once, at the checkout. On larger orders it is charged once, at the border. If your business is VAT registered you can use postponed VAT accounting to declare and reclaim the import VAT on the same return, so it is not an upfront cost at all.
Not yet. The government has consulted on removing the customs duty relief for low value goods, but nothing has changed in law for 2026 and any change would not arrive until 2029 at the earliest. For now the £135 rule works exactly as described above.
Sources: HMRC, Tax and customs for goods sent from abroad · HMRC, Valuing imported goods using method 1 · HMRC, Working out the VAT value using the customs value · HMRC, Import VAT and customs duty on gifts · HMRC, Check when you can account for import VAT on your VAT Return · GOV.UK, Trade Tariff and VAT rates. Figures reflect the latest published HMRC guidance as at August 2026, and duty rates should always be checked against your commodity code before you buy.