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UK valuing goods for Brexit import VAT & customs duties

  • Nov 19, 2020 | Richard Asquith

When the UK leaves the EU VAT regime and Customs Union after 31 December 2020, import VAT and potentially customs duties will become liable on goods coming in from the EU for the first time. 

The rules on how to calculate the base cost of goods vary for import VAT and customs. It is important you understand the rules and differences to avoid under declaring taxes – which can lead to blocked goods and fines – or overpaying and making loses. In all cases, it's important you categorise your goods with HS commodity code for your customs declarations, tariff and VAT calcualtions.

Import VAT goods value

Import VAT is calculated on the customs valuation (see below) plus incidental costs of import. This can include the transport costs between the port of clearance and the delivery address. Import VAT also includes the customs tariffs. You can avoid cash payments of UK import VAT via the new Postponed Accounting deferred VAT.

Customs value for import tariffs

A number of methods may be used to identifying the value of imports for customs purposes. The most common example is the transaction values, which includes:

  • Invoice purchase price (evidence required)
  • Delivery costs to border
  • Calculating customs duties / tariffs

One the value is determined; the tariff rate may be selected. This is based on:

  • type of goods; 
  • ship from country; and 
  • country of origin. 

The UK has set a proposed Global Tariff which will apply to imports from all countries around the world. It is currently negotiating a no-tariff trade deal with the EU to continue the current regime. If this Free Trade Agreement is not struck, then EU imports into the UK will be liable to the Global Tariff schedule. UK imports into the EU would be subject to the EU’s standard most favoured nation rates lodged with the World Trade Organisation.


Need help with your UK VAT compliance?



Researching UK VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade. 

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He can be contacted at: richard.asquith@avalara.com. He is part of the European leadership team which won International Tax Review's 2019 Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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