The United Kingdom is a the leading market for Canadian companies. Trade to the UK is made stronger by the UK -Canada Trade Continuity Act. Yet, free trade to the UK often does eliminate import fees. All consignments to the UK are subject to duty, value add tax and other import fees.
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Do I have to pay duty on items to the UK from Canada?
Consignments with a value over £135 (around $200 CAD) can import duty free.
How to calculate customs duties for UK
Duty is calculated as a percentage of the value. The correct value is most often the transaction value, which is simply the price paid or payable for the goods. The percentage is determined by the HS classification of the goods. keep in mind at import duty. It's just one of many import fees, which can include VAT, brokerage fees, and carrier disbursement.
Why are there still import fees if my package to the UK was under £135?
All imports to the UK, regardless of value, are subject to the British value add tax.
Why do carriers have an import fee when clearance is inclusive to the UK?
Carriers charge a fee when payment of duty and VAT is necessary. The fee is commonly around 2.5% of the amount paid the UK Customs with a minimum fee.
How can I benefit from the UK Canadian free trade agreement?
If your goods meet to the "rules of origin" under the the terms of the CUKTCA, they can benefit from preferential duty free import. The rules of origin can be complex but fundamentally the goods have be be made in Canada. Simply ship from Canada does not qualify the goods as being of Canadian origin.
This Guide Provides a Complete Understanding of UK Import Fees
- UK Import fees are calculation with examples
- Low value duty free threshold
- Country of Origin and Preferential duty free import
- Valuation and Import Entry Value
- HS Codes and Product Description
- Certification of Origin
- Value add Tax
- Carrier disbursement fees
- List of common import fees to the UK
- Shipping Options to the UK
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Additional Useful information: Secure your shipping to the UK
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Import fees to the UK refer to the duties and taxes apply on goods that import into the country. These fees regulate trade and protect domestic industries. They typically are on the value of the goods.
There are several types of import fees that may be applicable to UK imports:
- Customs duties: Duty applies imports via their classification under the UK Trade Tariff. The applicable rate of customs duty will depend on the type of goods and the country they ship from. Read more: Import duty and calculation.
- Value-add Tax (VAT): This is a consumption tax that applies to most imports at the rate of 20%. VAT collection is via HM Revenue and Customs (HMRC). It is due at the time of import. Read more: VAT collection for e-commerce shipments import to the UK.
- Excise duties: These are fees that on certain commodities. Excise goods include alcohol, tobacco, and fuel. The applicable rate of excise duty will depend on the type of goods.
- Other fees: Depending on the type of goods, there may be other fees or charges that are applicable. For example, there may be fees for animal or plant health inspections, or for the use of certain port facilities.
- Carrier disbursement and brokerage fees: The import fees can include a charge for customs entry preparation and customs bonds (if via a customs broker) or carrier disbursement fees (for shipments that import via Royal Mail, or commercial air carrier).
- Useful reading: Understanding non-tariff barriers
It's important to note that the specific import fees that apply to a particular shipment will depend on the type of goods, the country they are coming from (Read more: Certificate of Origin), and other factors. It is import to confirm compliance and likely import fees with the consignee/ importer prior to shipping.
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Examples and Calculation of Import Fees to the UK from Canada
UK customs uses the following elements to calculate import fees: Assessment Value ,Commodity/ HS Code and Country of Origin. The final imports fees often also include a carrier disbursement fee. See below.
Example: Calculating UK Import fees £2000 import subject to a 9% duty
- Assessment Value in UKL: £2000
- Duty: £180
- Value for VAT: (£2000 + £180): £2180
- VAT: (20% * £2180): £436
- Total Import Fees: (Duty + VAT/ £180 + £436): £616
- Disbursement fee of (2.5% of disbursement): £15.4
- Total sample import fees + Disbursement (£616 + £15.4) = £631.40
Example: Calculating UK Import fees for a consignment £2000 benefiting from preferential duty free import via UK TCA
- Assessment Value in UKL: £2000
- Duty: £0
- Value for VAT: (£2000 + £0): £2000
- VAT: (20% * £2000): £400
- Total Import Fees: £400
- Disbursement fee of (2.5% of disbursement with £11 minimum charge ): £11
- Total sample import fees + Disbursement (£400 + £11) = £411
- Total savings using Canada UK Free Trade (£631.40-£411): £220.40
List of Common Import Fees to the UK
While the list of potential import charges can seem exhaustive, the most common items companies should consider when shipping to the UK include duty, VAT,import processing or carrier disbursement fees.
Read More: Understanding import duty
Download accompanying PDF
Country of Origin and Preferential Duty Free Import to the UK
The basis of most modern free trade agreements is the duty free import of goods made or obtain in whole from a specific country. Simply shipping from Canada does not automatically grant preferential duty free import. The goods have be made in Canada.
For example, goods sold from a Canadian online site that were made elsewhere are Canadian origin for purposes UK import.
Useful information regarding the difference between shipping from Canada versus Canadian origin goods.
Valuation and Import Entry Value to the UK
Valuation is a key data point that UK customs looks at closely. Valuation can be complex but for most imports it is simply the transaction value. For example, if the goods were sold online for CA$100, the declaration value should be CA$100. The H.M.Customs converts currency to UK Pounds as a first step. H.M. Customs follows the prevailing currency market exchange rates.
Useful information on ensuring the correct value.
H.S. Codes and Product Description for UK Imports
To more accurately determine the potential duty rate, it is helpful to obtain the harmonize code (HS Code). If not known, a specific product description can assist in making the correct classification. Verifying and finding the correct HS Code.
Certification of Origin for UK TCA duty free benefit
The Canada UK TCA (CUKTCA) do not require a separate certificate of origin. A list of necessary data elements in necessary but not in a specific format. An origin declaration can be part of the commercial invoice. To ensure goods enter correctly, it can be helpful to include both a separate certification of origin as well as a statement on the invoice.
See sample form to declaration of origin (Fillable PDF to download)
Value add Tax to the UK for Imports
Value add tax , VAT, is often the biggest import costs as it applies to all consignments to the UK. Businesses often can claim back the VAT but final consumers are subject to the cost. For online sellers, it is necessary that the VAT be paid upfront at time of checkout.
Useful information for online retailers regarding VAT requirements to the UK
Carrier Disbursement Fees to the UK Explanation
The vast majority of imports to the UK arrive via couriers including FedEx, UPS and DHL. To facilitate the clearance process, carriers often pay duty and taxes on behalf of the consignee. To account for this cost of prepayment, they add a fee. This “disbursement fee” and averages 2.5% of the total import fees. The minimum fee is between £12 and £17.
There are a several options for shipping freight to the UK.
When choosing a shipping method, important factors include the size and weight of your freight. Necessary transit time, nature of the goods are also important.
Reminder: Always confirm compliance prior to shipping.
