How to Calculate UK Import Duty and Customs Tariffs

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In 2021, the UK debuted a new method of taxing goods that enter the region from other countries: the UK Global Tariff (UKGT). This system was designed to simplify the tariff process for both businesses and everyday people by dropping significant import costs and streamlining the import process. 

According to the UK government website, the goals of the UKGT were partly to “reduce cost pressures and increase choice for consumers,” as well as support the expansion of international buying and trading out of the UK. But what exactly is the UKGT, and what does it apply to? Learn the answers to these and other questions about this tariff system below.

What Is the UKGT?

In January of 2021, the UK government implemented the UKGT, a new system of tariffs for imported goods. The UKGT replaced the European Union’s Common External Tariff (CET), which charged significant rates on imported products. At its base, the government introduced the UKGT in order to benefit all businesses and individuals importing goods into the UK. The larger goal was to eliminate or substantially decrease a large majority of tariffs. They also aimed to lower the cost of many everyday essential products that the UK did not produce in large amounts within its borders. Under the UKGT, the tariffs on imported goods were lessened, with upwards of 47% of imports having no tariffs at all (as opposed to the 27% of non-tariff items under the CET). Additionally, the plan designated that tariffs that are under 2% would be eliminated altogether.

Tariffs remain present in certain industries sustained in the UK, including most agriculture and automotive imports. However, everyday consumers are less likely to pay significant fees for products they import. The UKGT decreased tariffs on household appliances and technology, including laundry machines, dishwashers and thermometers, as well as household items like baking ingredients. 

The UKGT policies also sought to make tariffs easier for the UK general public to understand and pay. One way they accomplished this was by changing the tariff currency from Euros to pounds. They also got rid of the Meursing table, a tariff chart developed by the EU that charged tariffs on products containing specific kinds of milk and sugars. Overall, consumers and companies that seek to import items from outside of the UK will largely benefit from the implementation of the UKGT program.

What Does the UKGT Apply To?

While many products under UKGT are no longer subject to tariffs, it’s important to stay aware of the imports that still are. According to UK Customs, the UKGT applies to all items imported to the UK from countries that have no Free Trade Agreement with the UK. Tariffs are not charged on any items from countries that the UK holds a trade deal with or those that fall under the Generalized Scheme of Preferences. The GSP is meant to describe countries that are favorable to trade with due to their economic status, their human rights conventions and/or their governance.

One of the most significant imports that the UKGT applies to is automobiles, which have a 10% tariff charge. Ceramics and agricultural products, including most meats, also retain a tariff. The government justifies keeping these tariffs in place in order to support the growth of these industries within the UK. 

That said, production-related imports, including screws and bolts, are no longer subject to fees. Additionally, guns, arms and ammunition still are charged a tariff, even for countries within the Generalized Scheme of Preferences. There are approximately 9,500 items that still fall under the tariff, so when in doubt, checking the UK Customs website or contacting them directly can be useful for understanding your tariff charges.

How Is the UKGT Calculated, and How Do You Pay?

The UKGT varies greatly in cost between individual items and services and the countries they originate from. Commodity codes are used to classify individual goods and determine their tariffs. The easiest way to find out the tariff amounts you may owe under the UKGT is to look up potential imports on the UK’s trade tariffs webpage. Here, you can search for goods and find out the tariffs that may be charged for those items.

Under the UKGT, for most imported products beyond the UK, you may need to pay additional import taxes. Charges that may apply to your imports are UK duty and VAT, a type of tax that is charged on items (over a certain currency amount) that are imported anywhere from outside of the UK. This tax is related to the nature of an item and its import status. VAT is often charged at 20% of the item’s value. Coupled with VAT, duty charges are meant to consider the insurance, shipping and handling of an imported item.

Different items and countries of origin qualify for different levels of duties and VAT. For example, collectible and vintage items are subject to lesser VAT charges than non-vintage items. If you want to find out whether your imports are subject to duty or VAT, you can use the UK government’s online duty + VAT calculator. If you owe VAT on any imported goods, you will be contacted by your mail service and asked to pay the fees before receiving your package. If you do not pay within three weeks, they may send your package back to its country of origin.

Special Considerations on Imports

At times, tariff amounts may be reduced on account of special conditions. One exception for tariffs may be related to the quantity of an item. For instance, if you are receiving a small amount of an import that is typically tariffed, you may be able to apply for 0% or reduced taxing under the tariff rate quota (TRQ). The TRQ allows for tariff relief when ordering a limited quantity of certain products, which you can review on the UK government’s website.

World events can also have an impact on tariff costs. Covid-19 led to changes in tariffs on items related to public medical safety. In 2022, both import duty and VAT were suspended for all medical items and protective gear brought in by charities or medical organizations. Individuals can email to ask for an approval form for import relief on goods that are imported for a philanthropic effort or medical office or hospital. Additionally, as of 2022, the UKGT is charging extra for imports from Russia due to the ongoing war between Russia and Ukraine.

Ultimately, determining your tariffs under the UKGT is fairly simple, thanks to the government’s various calculation tools. Hopefully, the implementation of the UKGT will accomplish exactly what it aims to do: make importing goods easier for common citizens.