Are you pricing a container from China and still guessing what HMRC adds at the border? Here is the machinery DTFU's UK clearance desk works through daily: the value duty is charged on, the 20% VAT stacked on top of it, the CDS entry that carries both, and the cash-flow settings that decide whether $3,692.60 leaves your account at the port.
Is UK import duty calculated on CIF or FOB?
Neither invoice term decides it — HMRC's valuation rules do, and on this lane they produce a CIF number. The customs value starts with the price you paid and adds every cost of getting the goods to the point where they enter the UK. On the shipping from China to the UK lane that means freight, insurance including open cover, loading and handling, container hire, terminal charges at the load port, inland transport inside China, and the bunker, currency, peak-season, security and war-risk surcharges.
The other direction is where quotes go wrong. Post-arrival costs come out of the valuation only when they are charged separately and can be distinguished, so a forwarder that folds Felixstowe-to-Birmingham haulage into one freight line has made your delivery dutiable.
| Goes into the customs value | Comes out of it |
|---|---|
| Goods price paid or payable, FOB or ex works | Import duty and VAT themselves |
| Ocean or air freight to the UK port | UK inland transport after the port, if separately invoiced |
| Insurance, including blanket policies | Post-arrival storage and demurrage |
| BAF, CAF, PSS, security and war-risk surcharges | Discounts agreed before shipment |
| Inland haulage and export clearance inside China | Port congestion charges billed after arrival |
Declaring FOB instead of CIF is the most common under-declaration on this lane. On $10,000 of goods with $2,475 of freight it understates duty by $198.00 and VAT by $534.60 — $732.60 a container before interest — and HMRC holds the carrier's entry summary declaration, so invoice, bill of lading and freight invoice get reconciled on a post-clearance audit.
Two additions catch second-time importers: free moulds, tooling or design work handed to a Chinese factory are assists and belong in the value, as do royalties payable as a condition of sale. HMRC's monthly exchange rate, not yours, applies when the entry is accepted.
UK Global Tariff: finding the commodity code that sets your rate
The UK Global Tariff is the UK's own schedule, in force since 1 January 2021 and published as the UK Integrated Online Tariff. Duty attaches at ten digits, not six. Work down from chapter to heading to commodity code, then read the measures attached to that code rather than its description — anti-dumping, quotas and document requirements live there.
There is no UK-China free trade agreement, so a Chinese certificate of origin buys nothing on duty. You pay the erga omnes rate plus whatever remedy sits on the code.
| Product family | Typical UKGT rate | What else to read on the code page |
|---|---|---|
| Electronics and appliances (chapters 84, 85) | 0 – 2% | Product safety and radio equipment documents |
| Machinery and mechanical parts (chapter 84) | 0 – 2% | Dual-use controls on some machine tools |
| Textiles and apparel (chapters 61, 62) | up to 12% | Fibre composition drives the subheading |
| Footwear (chapter 64) | 8 – 17% | Upper material and sole material, both |
| Ceramics (chapter 69) | up to 9% | Anti-dumping on certain tableware codes |
| Toys and games (chapter 95) | 0 – 4.7% | Age grading and EN 71 test reports |
| Folding e-bikes (8711 60) | Standard rate plus anti-dumping | Exporter-specific rates, additional codes |
Anti-dumping applies per exporter, not per country, and it is where a normal margin turns into a loss. Trade remedies notice 2025/3 keeps anti-dumping duty on folding e-bikes from China at rates that vary by named exporter and reach 70.1%. The notice also shows why the entry matters as much as the code: non-folding e-bikes under those commodity codes escape only if additional code 8100 is declared, and ceramic tableware carries a comparable remedy.
Where the code is arguable, describe the product as it will be sold rather than as the factory describes it on a proforma, and take an Advance Tariff Ruling — free, binding, and the one document that ends an audit conversation two years later.
What import duty and VAT add to shipping from China to the UK in 2026
Freight is not the subject here, but every dollar of it is dutiable. These are the sea freight and air freight rates DTFU books out of Shenzhen, Ningbo and Shanghai this month.
| Mode | Port-to-port | Door to door | Transit |
|---|---|---|---|
| LCL | $80 – $150 per CBM, $120 minimum | $180 – $300 per CBM | 30 – 38 days via Suez, 40 – 45 via the Cape |
| 20ft container (20GP) | $1,500 – $2,200 | $2,400 – $3,300 | 30 – 38 days |
| 40ft container (40GP) | $2,700 – $4,200 | Booked with 40HQ | 30 – 38 days |
| 40ft high cube (40HQ) | $2,800 – $4,400 | $4,000 – $5,600 | 30 – 38 days |
| Air freight, 100 – 500 kg | $5.00 – $7.50 per kg | $7.50 – $11.00 per kg | 4 – 8 days |
| Air freight, 500 kg and up | $3.80 – $5.20 per kg | $7.50 – $11.00 per kg | 4 – 8 days |
| Express courier | $8.00 – $14.00 per kg | $9.00 – $15.00 per kg | 3 – 6 days |
Freightos put China–North Europe at $3,442 per FEU in the week reported 20 October 2026, up 6% week on week as carriers pushed general rate increases into the 2027 contract round. A 40HQ in that band is contract and co-loading reality, not a spot print.
One tax consequence matters. A bundled UK delivery is paid for twice: $420 of Felixstowe-to-Birmingham haulage left inside the freight line draws $33.60 of duty and $90.72 of VAT, $124.32 for work done after the goods passed the point of introduction.
How much import VAT will you pay at 20%? A worked example that reconciles
Take a $10,000 FOB order of 2,000 pieces, 4,200 kg, in a 20ft to Felixstowe at a mid-band 8% duty rate. Every line below appears on the CDS entry and then on the VAT return.
| Step | Calculation | Amount |
|---|---|---|
| Goods value, FOB Shenzhen | Commercial invoice | $10,000.00 |
| Freight and insurance to Felixstowe | Carrier invoice plus cargo cover | $2,475.00 |
| CIF customs value | Goods + freight + insurance | $12,475.00 |
| Import duty at 8% | 8% × $12,475.00 | $998.00 |
| VAT base | CIF + duty | $13,473.00 |
| Import VAT at 20% | 20% × $13,473.00 | $2,694.60 |
| Total tax payable | Duty + VAT | $3,692.60 |
| Landed cost | Goods + freight + tax | $16,167.60 |
Tax is 29.6% of the CIF value, and the VAT line is 2.7 times the duty line. That is why a first order fails on cash flow rather than tariff: 8% is survivable, 20% applied to a base that already contains freight and duty is what empties the account.
| Line | Per unit, 2,000 pieces | Per kilo, 4,200 kg |
|---|---|---|
| Import duty | $0.50 | $0.24 |
| Import VAT | $1.35 | $0.64 |
| Landed cost, VAT paid | $8.08 | $3.85 |
| Landed cost, VAT recovered | $6.74 | $3.21 |
A $5.00 ex-works unit lands at $8.08, and $6.74 of that is real cost once the VAT is reclaimed.
Monthly and annual landed-cost maths
At two 40ft-equivalent shipments a month on the same profile:
| Period | Import tax | Landed cost | Of which recoverable VAT |
|---|---|---|---|
| One shipment | $3,692.60 | $16,167.60 | $2,694.60 |
| One month, two shipments | $7,385.20 | $32,335.20 | $5,389.20 |
| One year, 24 shipments | $88,622.40 | $388,022.40 | $64,670.40 |
The $23,952 of duty is permanent and belongs in your unit price; the $64,670 of VAT is not a cost if it is accounted for in your name.
Postponed VAT accounting: keeping the 20% instead of paying it at the port
Postponed VAT accounting lets a VAT-registered importer declare and recover import VAT on the same return, so nothing is paid at the border and nothing has to be reclaimed later. It is permanent and selected on the declaration itself.
Three boxes do the work: import VAT into box 1 as output tax, the same amount out of box 4 as input tax, the customs value into box 7. For taxable business use the net cash effect is zero. Evidence is the monthly postponed import VAT statement from the CDS dashboard, downloadable for six months — that, not a C79, is what your accountant needs.
A C79 exists only where you actually paid the VAT, at clearance or through deferment. HMRC issues it by the tenth working day of the following month and it expires after six months too.
Deferment is the other half. An account backed by a Customs Comprehensive Guarantee postpones duty to the 16th of the following month — two to six weeks of credit, averaging 30 days — and covers duty, import VAT, excise and anti-dumping. A guarantee sized for a normal month gets refused in a peak month, and refusal means the container waits.
| Setup | Cash out at clearance | When the VAT comes back | Cash tied up on this shipment |
|---|---|---|---|
| Duty and VAT paid at the port, no PVA | $3,692.60 | Next VAT return, up to three months | $2,694.60 for a quarter |
| PVA, duty paid at clearance | $998.00 | Same return, box 1 against box 4 | None of the VAT |
| PVA plus duty deferment | Nothing at clearance | Same return | Duty settles on the 16th |
Over 24 shipments the first row moves $88,622.40 out of the business and the third moves none of it.
GB or XI EORI number: which one goes on a China-to-UK entry
A GB-prefixed EORI is what a China-to-England entry needs; without it the goods cannot clear and storage starts the day the vessel arrives. Applying is free and takes minutes, but eligibility is the trap: to hold a GB EORI your business normally needs premises in Great Britain. A Chinese exporter with none generally cannot hold one, which is the legal reason DDP exists as a product rather than a pricing trick.
The XI prefix is a different number for a different border: goods moving into Northern Ireland from Great Britain, NI-to-non-EU movements, declarations made in NI, customs decisions in NI. Only businesses established in NI or the EU can be named declarant on NI declarations.
| Movement | EORI on the entry | Why it matters |
|---|---|---|
| China to Felixstowe, cleared in your name | GB | Requires a GB establishment |
| China to a Belfast warehouse | XI | Declarant must be NI or EU established |
| GB to NI, goods not at risk under UKIMS | XI, trader or agent | Green lane, reduced data |
| GB to NI, goods at risk of entering the EU | XI | Full declaration, duty may apply |
The Windsor Framework split separates those two GB-to-NI rows. Goods moved under a UK Internal Market Scheme authorisation and not at risk of entering the EU take the simplified green lane; everything else takes the red lane and can attract duty. A GB EORI on a Belfast-bound entry is rejected, the goods are held, and storage runs while a ten-minute application is filed.
What a CDS import entry actually contains, field by field
The Customs Declaration Service replaced CHIEF for imports, and for exports by 2024. No paper single administrative document survives; the customs declaration is a data set, and a handful of fields decide whether the container is released today or queried for a week.
| Field | CDS data element | What goes wrong |
|---|---|---|
| Declaration type | 1/1 | IM for imports; any other type blocks release |
| Procedure code | 1/10 | 4000 for release to free circulation |
| Additional procedure code | 1/11 | Must be valid against the 1/10 code chosen |
| Additional information | 2/2 | PVA flag, waivers and statement codes |
| Documents and references | 2/3 | Invoice, bill of lading, licences, AD additional code |
| Importer name and EORI | 3/15, 3/16 | Must match the EORI record exactly |
| Delivery terms | 4/1 | Incoterm and named place; drives the valuation |
| Country of destination | 5/8 | GB, not CN |
| Net and gross mass | 6/1, 6/5 | Must match packing list and manifest |
| Commodity code | 6/10 | Ten digits; an eight-digit entry is rejected |
| Preference | 6/17 | Blank for China, because no agreement exists |
| Guarantee | 8/2 | Deferment or cash; a missing guarantee stops release |
A single-commodity entry costs £45 – £95 at a UK broker, plus £10 – £30 per extra commodity line and £50 – £150 per amendment. Twenty SKUs in one container turn a £65 entry into a £300 one.
CDS then checks the entry against the entry summary declaration the carrier filed before loading. Disagree on package count or weight and the declaration is queried, the container is held, and storage starts — most holds on this lane trace to an invoice revised after the shipping instruction went out. Product marking is checked in the same window: CE is still accepted in Great Britain for most product types under the 2024 amendment regulations, with UKCA running alongside, but a missing declaration of conformity holds goods as surely as a wrong code.
Clearing through a customs agent or filing your own CDS entries
HMRC recognises two forms of representation and the difference is liability, not paperwork. A direct representative acts in your name: your EORI on the entry, you as debtor, the agent as service provider. An indirect representative acts in its own name and is jointly and severally liable alongside you. Neither can act without written instructions stating which applies, and you remain responsible for the declaration's accuracy either way.
Self-filing means a CDS subscription, declaration software, a guarantee or deferment account, and someone who reads the tariff whenever a product changes; otherwise a customs clearance partner files it for £45 – £95 an entry. At 24 entries a year and £95 an entry, broker fees come to £2,280. A four-point classification error on a $12,475 entry costs $499 of duty a shipment, $11,976 across the same 24.
| Your situation | Sensible default | Reason |
|---|---|---|
| First year, mixed SKUs | Agent, direct representation | Your EORI and C79 stay in your name |
| Over 200 entries a year, stable range | Self-file or dedicated agent | Fee saving funds a classification hire |
| High-value single-commodity containers | Either, with a ruling in hand | The ruling removes the main error mode |
| Non-established overseas seller | Indirect representation or DDP | You cannot hold a GB EORI |
DDP or DAP: who is legally the importer of record after Brexit
Under DAP the buyer clears and pays; under DDP the seller does. Both deliver to the same door, and the entire difference sits at the border.
| Obligation | DDP | DAP |
|---|---|---|
| Export clearance in China | Seller | Seller |
| Freight to the UK | Seller | Seller |
| UK import declaration | Seller, on its own or its agent's EORI | Buyer, on the buyer's EORI |
| Duty and import VAT | Seller | Buyer |
| Legally the importer of record | Seller | Buyer |
| C79 or PVA statement in the buyer's name | No | Yes |
Run the $16,167.60 shipment through both. On DAP the buyer pays $3,692.60, reclaims $2,694.60 through PVA or a C79, and carries $13,473.00 net. On DDP the buyer pays $16,167.60 and recovers nothing, because the VAT was never accounted for in its name: 16.7% more for a VAT-registered business.
That gap is why part of the DDP market is really DAP with a duty allowance in the rate. The tell is the document: no C79 and no postponed import VAT statement showing your own EORI means you were not the importer, whatever the quote called itself. DDP is right for samples, non-VAT-registered buyers and marketplace flows — a tax decision, not a convenience upgrade.
Low-value consignments and the end of the £135 duty relief
Consignments of £135 or less currently enter without duty, and B2C import VAT is collected at the point of sale by the seller or marketplace. Above £135 the standard rules apply, which is why so much China-to-UK e-commerce is engineered around that number.
That engineering expires. HMRC's policy paper on reforming customs rules for low value imports, published 13 July 2026, removes the relief for goods of £135 or less and replaces it with new arrangements: low-value imports defined by consignment value, a fiscal representative who carries joint and several liability for an overseas seller's customs debts, and new declaration data through secondary legislation. The operative date is appointed by the Treasury no later than October 2028, accelerated from March 2029 at Tax Update Day 2026. The Exchequer takes £225 million in 2028-29 and £535 million in 2029-30.
| Consignment | Today | From the appointed date, by October 2028 |
|---|---|---|
| £135 or less, B2C | No duty, VAT at point of sale | Duty at the commodity code rate, plus VAT |
| £135 or less, B2B | No duty, VAT reverse charged | Duty, VAT and full declaration data |
| Above £135 | Duty and VAT as normal | Unchanged |
Model it before the deadline. On the 8% model a £10 accessory picks up £0.80 of duty a unit — on a thin direct-to-consumer margin, the difference between a viable price and a subsidised one. The usual answer is UK fulfilment with a VAT registration and a fiscal representative, booked before volume is committed.
FAQ
How much is import duty on goods from China to the UK? Depends on the commodity code: electronics and machinery commonly sit at 0 – 2%, textiles up to 12%, footwear 8 – 17%, toys 0 – 4.7%. On a $12,475 CIF value an 8% rate is $998.00, before any anti-dumping duty.
Is UK import VAT 20% of the goods value? No. It is 20% of CIF plus duty. On $10,000 of goods with $2,475 of freight and $998 of duty the VAT is $2,694.60, not $2,000.
What is postponed VAT accounting and who can use it? Any VAT-registered UK importer. Declare import VAT in box 1 and reclaim it in box 4 of the same return, so no cash leaves the business. Evidence is the monthly postponed statement, available for six months; a C79 exists only where you actually paid the VAT.
How long do I have to pay deferred duty? Until the 16th of the month after the entry, or the next working day. Two to six weeks of credit, averaging 30 days, covering duty, import VAT, excise and anti-dumping duty.
Do I need a GB or an XI EORI? GB for England, Scotland and Wales, which requires a GB establishment. XI for goods moving into Northern Ireland and for NI declarations, with a declarant established in NI or the EU.
Can a Chinese supplier hold a UK EORI number? Not normally, because a GB EORI requires a UK establishment. That is why overseas sellers use DDP with a forwarder clearing as indirect representative, or appoint a fiscal representative.
What does a customs broker charge per entry in the UK? £45 – £95 for a single-commodity CDS entry, £10 – £30 per additional commodity line, £50 – £150 to amend.
What happens if I declare FOB instead of CIF? You underpay. On $10,000 FOB with $2,475 of freight that is $198.00 of duty and $534.60 of VAT per container, and HMRC reconciles the entry against the carrier's manifest on audit.
Is there anti-dumping duty on Chinese goods entering the UK? Yes, on specific commodity codes rather than whole countries. Folding e-bikes carry exporter-specific rates reaching 70.1%, and ceramic tableware carries a comparable measure.
What changes for the £135 low-value relief? HMRC's 13 July 2026 policy paper removes the duty relief for consignments of £135 or less, adds a fiscal representative role and new declaration data, operative no later than October 2028.
How do I reclaim import VAT if I am VAT-registered? Use PVA on the return, or claim against the C79 if you paid at the port or through deferment. Both need the import declared on your own EORI — under DDP you cannot reclaim it at all.
If you want the entry, the EORI and the deferment setup checked before your next vessel sails, DTFU files UK entries in-house and quotes the tax line next to the freight so the landed number sits on one page — send your shipment details to our UK clearance desk.
