Import VAT
Import VAT is value-added tax charged on goods entering the UK, calculated on the customs value plus any import duty and UK-side incidental costs — usually 20%.
Last reviewed 16 July 2026.
Import VAT is UK value-added tax levied on goods imported from outside the UK. It is charged on a broader base than duty: the customs value of the goods — which already includes freight and insurance to the UK border — plus any import duty and incidental costs (such as UK handling, clearance and inland transport) to the goods' first destination in the UK. The standard rate is 20%, with some goods at 5% or 0%.
Import VAT is paid at the border by default — unless postponed via PVA (postponed VAT accounting), which lets a UK VAT-registered business account for the import VAT on its VAT return instead of paying it in cash when the goods arrive. For most VAT-registered importers, import VAT is ultimately recoverable, so it is a cash-flow item rather than a permanent cost.
That distinction matters. A business that is not VAT-registered, or that imports goods used for exempt activities, cannot reclaim the import VAT — so for them it behaves like a real cost and belongs in the landed-cost figure.
How it affects your landed cost
Whether import VAT belongs in your landed cost depends on your VAT position: for a VAT-registered reseller it is usually recoverable and best modelled as cash flow, while for a non-registered buyer it is a genuine cost. Our calculator shows the import VAT on your shipment separately so you can treat it correctly — as a timing issue or a true cost — rather than blurring it into your margin.
Calculate your landed costImport VAT — FAQ
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