How to calculate customs duty in the UK?

Calculating Customs Duty in the UK

When importing goods into the United Kingdom, it is crucial to understand and calculate the applicable customs duty. Customs duty is a tax levied on imported goods and is based on their value and classification.

Commodity Codes and Duty Rates

The UK uses a Harmonized System (HS) code to classify imported goods. Each HS code has a corresponding duty rate. These rates vary depending on the type of goods being imported. For instance, umbrellas fall under HS code 6602 and are subject to an import duty rate of 4.5%.

Calculating Import Duty

To calculate the customs duty payable, follow these steps:

1. Determine the HS Code: Identify the relevant HS code for the goods being imported.
2. Find the Duty Rate: Check the UK Tariff for the applicable duty rate based on the HS code.
3. Calculate Duty: Multiply the value of the goods (CIF) by the duty rate. The CIF (Cost, Insurance, and Freight) value includes the cost of the goods, insurance, and shipping charges.

Example:

Let’s say you are importing umbrellas with a CIF value of £100. The HS code for umbrellas is 6602 and the duty rate is 4.5%.

Duty = CIF Value × Duty Rate
Duty = £100 × 4.5%
Duty = £4.50

Therefore, you would be liable to pay £4.50 in customs duty on the imported umbrellas.

Importance of Correct Classification

It is essential to correctly classify the imported goods to ensure fair and consistent application of customs duty. Misclassification can lead to incorrect duty calculations, penalties, and delays in clearance.

Useful Resources

• UK Tariff: https://www.gov.uk/trade-tariff
• Commodity Code Database: https://www.gov.uk/trade-tariff/codes
• Customs Duty Calculator: https://www.gov.uk/duty-calculator