UK Import Duty and VAT: Global Tariff, Preferences, PVA

The UK Global Tariff

Since 1 January 2021 Great Britain applies its own UK Global Tariff (UKGT) under the Taxation (Cross-border Trade) Act 2018. Goods are classified with 10-digit commodity codes in the UK Online Trade Tariff. Many UKGT rates were simplified compared with the EU tariff, but rates on textiles, footwear and agricultural goods remain significant (for example 12% on cotton T-shirts of 6109 10 00).

Northern Ireland follows EU customs rules for goods at risk of moving into the EU under the Windsor Framework, and uses the UK Internal Market Scheme for goods that stay in the UK.

Customs value and duty

The UK uses WTO valuation rules on a CIF basis to the UK border, like the EU. Add freight and insurance to the point of entry, plus assists and royalties where relevant. Duty is ad valorem, specific or mixed, and shown as third-country duty in the tariff tool.

Exchange rates for customs value are published monthly by HMRC. If the price depends on a royalty, a buying agent or goods supplied free by the buyer, document the adjustment: valuation is one of the areas HMRC audits most often after clearance.

Preferences

Free trade agreements

The UK has agreements with the EU (Trade and Cooperation Agreement), Japan, Australia, New Zealand, Korea, Switzerland, Türkiye, CPTPP members and many others. Each has its own rules of origin and proof, for example a statement on origin under the EU–UK agreement.

UK–Türkiye

The UK–Türkiye Trade Agreement has applied since 1 January 2021. It gives zero duty on industrial goods and preferences for some agricultural goods that meet its PEM-style origin rules, proved by EUR.1 or invoice declaration, and permits cumulation with EU materials. An enhanced agreement is under negotiation; the fourth round was held in February 2026.

Developing Countries Trading Scheme (DCTS)

The DCTS replaced the UK GSP on 19 June 2023. It has three tiers: comprehensive preferences for least developed countries (duty-free, quota-free), enhanced preferences, and standard preferences. Origin rules are more flexible than under the old GSP and allow cumulation with other DCTS countries and some partners.

Import VAT and postponed VAT accounting

Import VAT is 20% standard (5% or 0% for some goods) on the customs value plus duty plus costs to the first destination. VAT-registered importers can use postponed VAT accounting (PVA): instead of paying at the border, they declare and reclaim the import VAT in the same VAT return, using the monthly postponed import VAT statement downloaded from HMRC. PVA is the default choice for most businesses because it removes the cash-flow cost.

Low-value goods

For consignments up to £135, VAT is not collected at the border: the overseas seller or online marketplace charges UK VAT at the point of sale and accounts for it to HMRC. Customs duty relief currently applies to such consignments, except excise goods; separately, gifts between private individuals are relieved up to £39.

The government will remove the £135 customs duty relief. The HMRC policy paper published on 13 July 2026 says the new arrangements will start on a date set by Treasury regulations, by October 2028 at the latest. Sellers or marketplaces will become responsible for the duty, with a new UK fiscal representative role jointly liable for the debt. The £39 relief for gifts between private individuals is retained.

Trade remedies

The Trade Remedies Authority investigates dumping, subsidies and import surges and recommends measures to the Secretary of State. Anti-dumping and countervailing duties are shown against the commodity code with the exporter-specific rate.

On 1 July 2026 the steel safeguard was replaced by a Steel Trade Measure covering 20 steel product categories: quarterly tariff-free quotas about 51% smaller than before, and a 50% duty on imports above quota, shown as third-country duty in the tariff tool.

Reliefs and special procedures

Duty is not always due at the moment of import. Several authorisations let you suspend or reduce it, and they matter most when goods are re-exported or processed.

• Customs warehousing: store non-UK goods with duty and import VAT suspended until they are released or re-exported.
• Inward processing: import goods for processing and re-export without paying duty; duty is due only on goods that stay on the UK market.
• End-use relief: reduced or zero duty for goods put to a prescribed use, such as certain aircraft or ship parts.
• Returned goods relief: no duty on UK goods re-imported unchanged, usually within three years.
• Temporary admission: duty-free use of goods such as exhibition items or professional equipment for a limited period.
• Freeports and free zones: designated sites where duty and import VAT are suspended on goods held or processed inside them.

Declarations and representation

Import declarations are made in the Customs Declaration Service, usually by a customs broker acting as direct or indirect representative. An indirect representative is jointly liable for the customs debt, which is why many brokers ask overseas sellers for a UK-established importer or a deposit. Keep commercial invoices, transport documents, origin evidence and the C79 or postponed VAT statements for at least four years.

Worked example: T-shirts from Türkiye

A UK retailer imports cotton T-shirts of 6109 10 00 made in Türkiye. Customs value CIF Felixstowe: £20,000.

Without a valid proof of origin: UKGT duty 12% = £2,400. VAT base £22,400; VAT at 20% = £4,480.

With a EUR.1 or invoice declaration under the UK–Türkiye agreement and goods that meet the origin rule: duty 0%. VAT base £20,000; VAT £4,000, accounted for through PVA so no cash is paid at the border.

Saving from origin compliance: £2,400 duty on one shipment.

Checklist

• GB EORI in place (XI EORI for Northern Ireland movements).
• Commodity code and measures checked in the UK Online Trade Tariff.
• Origin evidence ready for the relevant FTA or DCTS.
• PVA selected in the declaration if VAT-registered.
• For B2C parcels up to £135: VAT registration as seller or marketplace, and a plan for the end of duty relief by October 2028.
• Steel and trade-remedy measures checked.