Import Duty from China to the UK: What You Actually Pay
Duty is the small bill, VAT is the big one, and only one of them ever comes back to you. Which one comes back depends on paperwork you set up before the goods leave China.
| The Bill | Who Pays It | Do You Get It Back |
|---|---|---|
| Customs duty | The importer | Never |
| Import VAT, usually 20% | The importer | Usually: VAT registered, your name |
| Courier handling fee | Whoever takes the parcel | No |
| Seller’s “VAT included” | Covers the VAT only | Not duty, not fees |
What you finally pay is decided by the product, the freight, and whose name goes on the customs entry.
What Will You Actually Pay?
A £10,000 order does not just cost £10,000 when it lands in Britain. Add the freight, the duty, the VAT, and the clearance fee, and the cash you need at the border jumps by thousands. Some of it comes back later. Some of it never does.
The tax does not start at your invoice, it starts at your invoice plus the freight. Suppose the goods cost £10,000 and shipping to the UK costs £2,000. Customs does not begin at £10,000. It begins nearer £12,000, adds any duty to that, and works out the VAT on the result.
That is why a freight quote is also a tax quote. Flying goods in to save two weeks quietly raises the value customs sees, so UK shipping times and your tax bill are the same decision wearing different clothes.
Duty itself is usually the smaller number, but the rate is not something you can guess. It runs from zero to a level that changes whether the product works at all, and it is set by the code your goods are declared under.
Which Money Comes Back?
Duty is gone forever, and VAT usually is not. If your business is VAT registered and the import is recorded in your name, the VAT normally comes back to you. Duty never does, no matter who you ask. So duty belongs in your selling price, and VAT belongs in your cash flow.
Most first-time importers get that backwards. They price the product as though the 20% is a real cost, decide the margin is impossible, and walk away from a product that would have worked.
If you are VAT registered, ask your agent about postponed VAT accounting. It puts the import VAT on your VAT return instead of taking it out of your bank account at the border. Same tax, different timing, and the timing is your working capital.
Email your customs agent before the shipment leaves China, and ask for it in your company’s name. They will not raise it for you. If the entry is filed the wrong way, you pay the VAT first and wait months to get it back.
Why “VAT Included” Can Still Cost You
When a seller says VAT is included, one tax was collected and nothing else was. The rule changes depending on who sold the goods and how the parcel was shipped. The £135 limit also applies to the whole parcel, not to each item inside it.
The courier asking for money at your door does not mean you were charged twice. Once a parcel is worth more than £135, the normal import rules take over and the VAT and any duty get collected at the border. The courier pays it, adds a fee for the favour, and hands you the bill. If the seller charged VAT at checkout as well, check the invoice rather than assuming both charges are right.
The £135 free ride also has an end date. The duty relief on low-value parcels is being removed by October 2028 at the latest, brought forward six months in June 2026. If you ship parcels one at a time from China to UK customers, rebuild those numbers now. If you import in bulk, this was never the number driving your cost.
Why DDP Can Hide the Real Cost
When a supplier quotes a delivered price, ask whose name goes on the customs paperwork. Under DDP shipping from China, the supplier or their agent is often the importer. If the importer is not your business, the VAT was not paid in your name, and there is nothing for you to claim back.
That turns a tax you could have recovered into a cost buried in the delivered price. The quote may still be the cheaper one. It is no longer the same comparison, because you are pricing a shipment that was never imported in your name.
Every shipping term you agree quietly picks who declares, who pays, and who can claim. That is really what CIF against FOB is about, one step earlier in the same conversation.
What to Check Before You Order
Your duty rate comes from a code, not from what you call the product. Get it confirmed from the real material, the real function, and what is actually in the box. The factory’s code is not yours, and the wrong one either overcharges you quietly or undercharges you expensively.
Your invoice is the evidence, so it has to say what really happened. The commercial invoice must match the goods, the price, the terms, and the code. Vague wording and suspiciously round numbers invite questions you would rather not answer a year later.
Before you place the order, confirm five things:
The code and the rate: for your product, in the UK, not the factory’s Chinese export code.
The real freight cost: to the UK border, because it is inside the tax base.
Whether you can recover the VAT: which decides if 20% is cash flow or cost.
Whether postponed VAT accounting is being used: and that your agent knows it.
Whose name is the importer: on the entry itself, not on the sales contract.
If any one of those is blank, your landed cost is still a guess. Your forwarder fills in the form, but you own what it says, which is why the shipping documents behind it are yours to check.
FAQ
Q1: Should I register for VAT just to import?
It changes the maths, but registering affects your sales as much as your imports. Weigh the VAT you would get back against the VAT you would have to charge and file, and put that one to your accountant rather than your forwarder.
Q2: Do I need a UK EORI number before the goods ship?
Yes. It is your customs ID, it is free from HMRC, and it has to exist before the customs form is filed rather than when the goods land.
Q3: Should I compare suppliers before or after duty and VAT?
After. A factory that is £500 cheaper can still be the expensive supplier once its product attracts a higher duty rate or a bulkier box.
Q4: Do samples from a Chinese factory pay duty too?
Samples can still attract duty and VAT, although relief exists when they meet the conditions. Do not let the factory invent a gift description or a token value; give your broker the real facts and ask.
Q5: My supplier offered to declare a lower value to save me duty. Should I?
No. You are the one signing for that number, and the saving is small next to a penalty, a hold, or becoming an importer HMRC finds interesting.
Q6: My shipment has three different products in it. Is that one code or three?
Classify each one separately, because they may share a code and they may not. The mistake is letting the factory pick a single code for the whole carton because that is easier for them.
Q7: I think I overpaid duty. Can I get it back?
Yes, and you have roughly three years from the payment to ask, which is long enough that most importers never get round to it. The usual causes are a wrong code or freight counted twice.
Q8: When is a customs broker worth paying for?
When the order is big enough that a mistake costs more than the fee, or when your product sits between two codes. On repeat volumes, a good one pays for himself the first time he prevents a correction.
Conclusion
The factory price is the only part of a UK import that nobody argues about later. Duty follows the code, VAT follows the paperwork, and both are settled while your money is still in your account.
If you would rather have the codes, the terms, and the paperwork sorted inside the order instead of at the border, that is what order management is for.
