Debitoor Dictionary

Accounting terms explained simply

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  1. Import VAT
  2. Export VAT
  3. Customs Duty
  4. Exchange gain or loss
  5. Fixed exchange rates

Import duty – What is import duty?

Import duty refers to a number of different taxes due on goods purchased from abroad.

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In the UK, there's no specific tax called import duty. However, if you purchase goods from abroad, you might need to pay a number of different taxes and duties, depending on the nature of the goods and where you purchased them from.

Importing, taxes, and duties

There are three main types of taxes and duties due on goods bought into the UK:

  • Import VAT. You will need to pay VAT on goods sent from non-EU countries if they are gifts worth £39 or more; alcohol, tobacco products, and perfumes or colognes of any value; or other products worth £15 or more.
  • Customs Duty. If you receive goods worth more than £135 from outside of the EU, you may need to pay Customs Duty.
  • Excise Duty, which is designed to limit the consumption of products that are seen to be damaging to the environment or to consumers’ health (for example, alcohol, tobacco, or fuel products).

You may need to pay more than one type of tax on your imported goods.

How do I pay import duty?

The way you pay import duty depends on which taxes you need to pay, and where the goods are being sent from.

If you need to pay Customs Duty, the payment process is usually handled by the courier or delivery service handling your goods. They should contact you to explain how much is due and how you can pay.

Excise Duty is usually considered an indirect tax, which means that the customer covers the tax by paying more for the product, but does not actually pay the tax directly to the relevant tax authorities. For imports from other EU countries, you should check that Excise Duty was included in the total price. However, if Excise Duty is due on imports from non-EU countries, you may need to handle the process yourself.

If you purchase goods from outside of the EU, you will pay VAT at the same rate as you would pay on goods bought in the UK. Whereas VAT is usually paid to the supplier, import VAT is paid directly to HMRC. However, VAT-registered companies can reclaim this VAT as ‘input VAT’. If your business is VAT-registered, you do not usually pay VAT on products imported from other EU countries.