Whether you are importing from the EU, Asia, or North America, the UK's import framework treats all third-country imports under the same rules. The practical mechanics — registering, declaring, paying duty, accounting for VAT, and reconciling everything to your accounts — are the same whether your supplier is in Berlin or Shenzhen. New importers often discover too late that the cost of getting compliance wrong is not just back duty and VAT, but interest and penalties that can quickly exceed the savings of finding the cheapest supplier.
Start with the EORI
Every business that imports or exports goods across the UK border needs an EORI (Economic Operator Registration and Identification) number. UK-based businesses receive a GB EORI. Businesses that also move goods to or from Northern Ireland need an XI EORI in addition. EORIs are issued by HMRC at no charge, but application can take a few business days, so apply before the first shipment leaves the supplier.
Without an EORI, customs declarations cannot be submitted and goods are held at the border. We see this every few months with first-time importers whose freight forwarder assumes the registration is already in place.
Commodity codes and the UK Global Tariff
Every imported product is classified under a commodity code from the UK Global Tariff. The code (typically eight digits for export, ten for import) determines the duty rate, any quotas, licensing requirements, and product-specific controls. Misclassification is the largest single cause of HMRC import disputes, and the consequences run for several years given the standard four-year recovery window for underdeclared duty (six years where there is loss of duty caused by carelessness).
Getting the code right means understanding the tariff's section, chapter, heading, and subheading structure, and reading the General Interpretation Rules where products are not obviously placed. HMRC offers an Advance Tariff Ruling for complex cases, providing binding classification for three years.
Customs value: more than the invoice
The customs value is the basis for both duty and import VAT. The default method is transaction value: the price paid or payable for the goods when sold for export to the UK, plus certain additions (freight, insurance, royalties paid as a condition of sale, assists, packaging costs, and selling commissions) and minus certain deductions.
The freight and insurance additions trip up many importers using CIF or DAP Incoterms because they assume the supplier invoice is the full customs value. Freight to the UK border, even where included in a single supplier invoice line, must be separately identifiable.
Origin and preferential rates
Imports from countries with which the UK has a trade agreement may qualify for preferential (often zero) duty rates if the goods meet the rules of origin and the importer claims preference correctly. The UK has agreements with the EU (under the TCA), Japan, Canada, Australia, New Zealand, and others, and continued some EU-era agreements with countries such as Singapore, South Korea, and Mexico.
Claiming preference requires a statement on origin from the supplier (or in some agreements an exporter declaration on an invoice) and supporting evidence that the goods meet the origin criteria of the relevant agreement. HMRC can request the evidence years after the import, so document retention is critical.
Import VAT: pay or postpone
Import VAT is charged on the customs value plus duty. UK VAT-registered businesses can choose to postpone import VAT under Postponed VAT Accounting (PVA), avoiding payment at the border and accounting for it on the next VAT return. The Monthly Postponed Import VAT Statement (MPIVS) is the source document for PVA entries.
Non-VAT-registered importers and businesses that opt out of PVA must pay import VAT at the border (or via deferment) and cannot recover it. This is one reason why even small importers register voluntarily for VAT when they hit a reasonable volume of standard-rated business sales.
Duty deferment: when to set one up
A duty deferment account lets you defer payment of customs duty and any import VAT not under PVA until the 15th of the following month. The benefit is consolidated monthly payment instead of payment per consignment, and the cash-flow saving for regular importers is significant.
Setting up a deferment account requires a guarantee, but guarantee waivers are available for businesses with a good compliance history under the Customs Comprehensive Guarantee (CCG) scheme. For irregular or low-volume importers, deferment is overhead for limited benefit. For weekly or daily importers it usually pays for itself in the first quarter.
Authorisations worth knowing about
Two HMRC authorisations deserve a mention. Authorised Economic Operator (AEO) status is a quality mark recognising compliance and security standards; AEO holders get faster border treatment and easier access to other simplifications. Customs Warehousing lets businesses store imported goods without paying duty or VAT until the goods leave the warehouse — useful for distribution hubs and businesses re-exporting a portion of imports.
Inward processing relief (IPR) is another simplification that lets businesses process imported goods (manufacturing, repair, alteration) without duty if the finished goods are re-exported.
How PushDigits supports importers
Our VAT team sets up PVA, reconciles MPIVS to bookkeeping, and reviews import declarations for classification, value, and origin risk. Our business advisory team works with growing importers on customs broker selection, deferment account setup, and applications for AEO, customs warehousing, and IPR where the volume justifies it.
If you are about to start importing or have inherited a compliance position you are not confident in, book an import compliance review or visit our contact page.