Goods imported from outside the EU require you to pay import duty and VAT, and make a declaration to customs.
Imports from overseas are treated differently depending on whether the goods come from countries within the EU or from elsewhere. Within the EU, most goods can be imported with minimal customs control and, mostly, no import duty or VAT to pay.
Within the EU most goods are in free circulation. Importing goods from the EU is sometimes not termed as ‘importing’ - this is often referred to simply as a ‘movement’ of goods, or as an ‘acquisition’. The term ‘importing’ is often used with the implied meaning that the goods have come from outside the EU.
Goods can be moved freely within the EU, although VAT and excise within member states should be taken into consideration. Goods in free circulation in the EU can be moved from country to country with minimal customs control. Unless the goods are subject to excise duty, eg alcohol, or licence requirements such as agricultural goods, they generally cross borders without any special taxes and minimal import paperwork. For more information, see the guide on trading in the EU.
Imports from outside the EU are treated differently:
- you must make an import declaration to customs
- you generally have to pay import duty and import VAT (plus VAT on import duty), although use of some customs procedures may suspend or relieve you from these taxes
Businesses that are already involved in international trade and have an Economic Operator Registration and Identification Number (EORI), may wish to consider registering with HM Revenue & Customs (HMRC) as an Authorised Economic Operator (AEO). While the scheme is not compulsory, companies that meet the requirements will be registered as AEOs and can take advantage of simplified customs procedures that relate to the security and safety of their imported goods in transit. See the guide on Authorised Economic Operators.
Imports from outside the EU into the UK must be declared to HMRC. This is usually done using the Single Administrative Document (SAD), also known as form C88. SADs can be submitted either electronically using the Customs Handling of Import and Export Freight (CHIEF) system, or manually (although manual submissions may take longer to process). See our guide on UK’s import and export processing system, CHIEF.
To make the declaration the correct customs classification is required. See the guide on classification of goods.
Find commodity codes and other measures applying to imports and exports by accessing our online UK Trade Tariff tool.
The declaration also includes a customs procedure code explaining what is being done with the goods, eg import to free circulation or use of one of the customs procedures such as temporary admission. Together with the commodity code, this helps determine what rate or type of import duty is to be charged and how the goods are to be treated.
You can use an agent, such as a freight forwarder, to make the declaration on your behalf. This can make importing simpler and faster if you are not authorised to make electronic declarations yourself. You can register for some electronic Customs declaration processes such as Exports on the Government Gateway website.
See the guide on how to value your imports for customs duty and trade statistics.
New safety and security laws in force since 1 January 2011 mean that goods destined to arrive in the EU must be declared to the Office of First Entry to the EU - that member state’s Import Control System (ICS) - within set time limits. The legal onus is on the Carrier of the goods to make the ICS declaration, however the Carrier may, with its explicit knowledge and consent, delegate this activity to the importer and/or his agent. As such, an Entry Summary Declaration must be made for your goods. UK ICS will provide the Carrier, or delegated declarant, with an Movement Reference Number for the goods.
Community/common transit procedures
Community Transit (CT) is a customs procedure which allows customs and excise duties and VAT on imported goods to be suspended until the goods either reach their point of destination in the community or are exported out of it. The CT procedure can also be used for movements to and from the European Free Trade Association (EFTA) countries, and is then known as common transit. The EFTA countries are Switzerland, Liechtenstein, Norway and Iceland.
The New Computerised Transit System (NCTS) must be used for all community/common transit declarations except for private travellers (with goods in excess of their allowances) and for some authorised simplifications. Any potential taxes and duties on the goods must be guaranteed. Use of NCTS does not normally preclude use of other customs procedures such as customs warehousing.
Traders who are approved as AEOs can gain access to certain simplifications in customs procedures such as guarantee waivers and approval to start NCTS movements at their own premises (Authorised Consignors) or end the movements there (Authorised Consignees) without having to produce the goods to Customs.
If the journey begins outside the EU, the Transport Internationaux Routiers (TIR) procedure can be used for movements to and from countries that are contracting parties to the TIR Convention. The goods must travel by road in approved vehicles or containers under customs seal, accompanied by a TIR carnet document. You, or your freight forwarder, must be authorised to use TIR and the potential taxes and duties on the goods must be guaranteed.
All traders moving goods across the EU under TIR are required to submit a declaration using NCTS when the consignment reaches the frontier of the EU. Find details of TIR and NCTS and links to newsletters on Community/Common Transit and TIR on the HMRC website.
See the guides on moving your goods and moving goods by road.
Taxes and duties on imports
It’s important that as a trader you know whether you have to pay import VAT and duty on your goods before they can be cleared for entry into the UK.
Imports may be liable to import duty, depending on the classification of the goods and where they come from. Your goods might also be liable to additional duties such as anti-dumping duties. See the guide on anti-dumping and countervailing duties.
You can pay a reduced or zero rate of import duty on imports of certain goods from some countries, though there may be a limited annual quota. You usually need to provide documentary proof showing where the imports originated from. See the guide on rules of origin. Find out how to access Tariff quotas on the Europa website.
Goods are not normally released by HMRC until you have paid all the charges due. However, you can defer payment.
You may also be able to claim a relief allowing you to pay lower charges, or none at all.
VAT is charged on goods imported from outside the EU at the same rate as if you bought the goods in the UK. VAT-registered businesses can reclaim the VAT as input tax in the same way as VAT is paid on UK purchases. You will also have to pay VAT on any import duty.
Import VAT is paid directly to HMRC, whereas domestic VAT is normally paid to a supplier of goods. After an Import VAT payment is made by a UK VAT registered trader an HMRC form C79 showing the VAT paid will be electronically produced and sent to the business address. You can use this as evidence of the VAT paid on your VAT return; authorised traders may also be able to use the deferred accounting scheme to pay VAT.
Goods such as tobacco and alcohol products are subject to excise duty.
Suspending or delaying import charges
There are a number of customs procedures which can benefit traders and can be used to help delay or suspend paying duty.
Imported goods are not normally released by customs until you have paid duty and VAT. Import duty is one of two main duties collected by HMRC. Import duty is a tax charged on goods imported into the EU. The other main duty is excise duty, which is a tax on goods such as alcohol or tobacco. For more information see the section on excise duties and the page ‘VAT on goods from EU countries’ in the guide on imports and purchases from abroad: paying and reclaiming VAT.
However, if you import regularly you can set up a deferment account with HMRC, allowing you to pay monthly in arrears. You must provide a financial guarantee from a bank, insurance company or building society to cover the charges you owe. Read guidance on deferring import duty and VAT on the HMRC website. You can also find more information in the guide on customs warehousing.
Depending on your circumstances, you may be able to delay your liability to import duty or VAT.
If you do not need the imported goods immediately, or you intend to re-export them, you can store them in an authorised customs warehouse. You do not have to pay import duty, excise duty or VAT until you remove the goods into free circulation. Read about customs warehousing on the HMRC website
Reliefs on imports for export or re-export
There are a number of customs procedures that can benefit traders who plan to send their goods out of the UK.
If you are importing goods that you will later export or re-export, you may be able to claim relief from customs charges due on importation.
It is important to note that Temporary Admissions (TA) does not remove the need to comply with any import/export prohibitions or restrictions, for example for drugs, counterfeit/pirated goods or endangered species (including derivatives such as ivory, furs and goods made from skins).
If goods are to be temporarily imported for use, relief from import duty or VAT may be available, provided the goods will remain in the same condition as they are imported, eg goods for demonstration, professional equipment, samples, goods for an exhibition or for humanitarian purposes. Read about temporary admission on the HMRC website.
One method of TA is the ATA carnet. The carnet is issued in the country of dispatch usually by local chambers of commerce and industry and is used in place of customs documents normally required at import and/or re-export. ATA carnets are only applicable in countries which are signatories to the ATA Carnet or Istanbul Conventions. Read about ATA carnets on the HMRC website.
You cannot use any of these reliefs for goods that you plan to process before re-exporting. However, minor handling is permitted to preserve the goods and prevent their deterioration.
Processing and re-exporting
If you are importing goods that you intend to process and then export, you can claim Inward Processing (IP). There are two methods of duty relief - suspension and drawback. IP suspension allows you to import and process the goods while suspending duty and VAT payments. With IPR drawback, duty and VAT is paid on importation but can be reclaimed. You must be authorised by HMRC to claim these reliefs. Read a guide to IPR on the HMRC website.
Onward supply to the EU
If you are importing goods that you plan to supply to another EU member state, you may be able to claim Onward Supply Relief (OSR). This allows you to import the goods without paying import VAT. Instead, VAT is paid when you supply the goods to your customer. Read about OSR on the HMRC website.
Import reliefs on previously exported goods
If you export goods to be repaired or processed outside the EU before being re-imported, you may be able to claim Outward Processing Relief (OPR). You claim relief from import duty on the value of the goods you originally exported or the difference in duty between the exported and re-imported goods. You need to be authorised to claim this relief. OPR from the HMRC website
For imports of goods that were previously exported but have not been processed overseas, you may be able to claim Returned Goods Relief (RGR). For example, you might use this if your customer rejects and returns the goods.
Depending on the circumstances, you may be able to claim full or partial relief from import duty, import VAT or both. RGR from the HMRC website
For more information on these reliefs, see the guides on outward processing relief (OPR) and imports and purchases from abroad: paying and reclaiming VAT.
Special import reliefs
You should be aware that there are further types of relief that can be claimed for certain types of goods or goods that are used in certain ways.
There are several special reliefs that may apply to your particular circumstances. For example:
- you can import goods for charities, goods for exhibitions, and low-value samples, free of duty - read a guide on importing samples on the HMRC website
- you may be able to import scientific goods to be used in tests free of duty and VAT - read a guide on importing goods for tests on the HMRC website
These reliefs are part of the Community System of Duty Reliefs (CSDR). Typically, these reliefs apply to imports that serve a social purpose, such as imports of goods for people with disabilities or museum exhibits.
If you import goods to process into a product that carries a lower rate of import duty than the imported goods, you can apply for processing under customs control (PCC) and pay duty on the lower rate applicable to the processed goods. However, the duty and import VAT due must be calculated on the higher value of the processed products. PCC from the HMRC website
The special relief from import duty for imports of spare parts for civil aircraft ceases on 31 December 2009. From 1 January 2010, these goods will come under the regular customs warehousing procedure, which allows suspension of payment of import duties and/or import VAT when non-Community goods are stored within premises or under an inventory system authorised as a customs warehouse. If excise duty is applicable, it too is suspended while non-Community goods are under the customs warehousing procedure.
If you operate a depot for aviation spare parts, you can either apply to be authorised to operate a customs warehouse or deposit your goods in an existing customs warehouse facility. If excise duty is applicable, it too is suspended while the goods are in customs warehousing.
For more information, see the guide on customs warehousing.
Reclaiming taxes on rejected imports
If you have received a faulty delivery, you will probably need to reject the goods you have been sent. You can usually do this if the goods are defective or were damaged before clearing customs. You can also reject goods that are not in accordance with your purchase contract. You may not want to pay import VAT or duty, or you might want to reclaim any VAT or duty you have already paid.
You must notify HMRC in advance, and then dispose of the goods. Claims must be made within a year of the duty becoming due. You can do this by exporting them outside the EU, for example by returning them to your supplier, or destroying them.
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