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Importing from China to the US or UK: How Duty and Import VAT Work

By Raúl Vaquerizo Tortosa · Published October 26, 2026

Many ecommerce products are made in China, and the cost of importing them is not just the factory price plus freight. Customs duty, import taxes and clearance fees can add a significant amount per unit, and the rules have changed often in recent years. This guide explains how the charges are worked out so you can estimate them and check your broker’s figures.

This is general information, not customs advice. Rates and rules change; always confirm them for your specific goods with the official tariff or a licensed customs broker.

Step 1: Classify the product

Every product has a tariff classification, based on the international Harmonized System (HS). The first six digits are shared worldwide; countries add more digits for their own tariffs (the US uses a 10-digit HTS code, the UK a 10-digit commodity code).

The classification sets the duty rate, so getting it right matters. Two similar products - a cotton shirt and a synthetic one, or a phone case and a phone accessory kit - can fall under different codes with different rates. If you are unsure, ask your customs broker or request a binding ruling from the customs authority.

Official tariff look-ups:

Step 2: Confirm the country of origin

Duty depends on where goods were made, not where they were shipped from. Goods made in China but shipped via another country are generally still of Chinese origin. Origin matters especially for imports from China, because some countries apply additional duties specifically to goods of Chinese origin.

Step 3: Work out the customs value

Duty is a percentage of the customs value, and the two markets define it differently:

  • United States: generally the transaction value of the goods, without international freight and insurance.
  • United Kingdom: generally the value of the goods plus freight and insurance to the UK border.

So the same shipment can attract more duty in the UK than in the US at the same nominal rate.

Step 4: Add up duty and taxes

United Kingdom

UK imports typically involve:

  • Customs duty at the rate in the UK Global Tariff for the commodity code (some goods are zero-rated).
  • Import VAT, usually at the standard rate of 20%, charged on the customs value plus duty.

An illustrative example, with a made-up 4% duty rate:

Item Amount
Goods £1,700
Freight and insurance £300
Customs value £2,000
Duty at 4% £80
Import VAT at 20% on £2,080 £416
Duty and VAT at import £496

VAT-registered businesses can usually recover import VAT, and can often account for it on their VAT return using postponed VAT accounting instead of paying it at the border. Duty is not recoverable. Special rules apply to low-value consignments sold directly to UK consumers; check how they apply to your sales model.

United States

US imports typically involve:

  • General duty at the rate in the HTS for the product (some goods are duty-free).
  • Additional duties that may apply to goods of Chinese origin. These have changed several times in recent years and can be much larger than the general rate, so check the current position for your HTS code before you order.
  • Processing fees, such as the merchandise processing fee and, for ocean freight, the harbor maintenance fee.

There is no import VAT in the US; sales tax is handled when you sell. Low-value shipment exemptions have also been restricted in recent years, so do not assume small parcels enter duty-free.

Step 5: Check who pays what (Incoterms)

Your supplier’s quote will use an Incoterm that defines which costs are included:

  • EXW (Ex Works): you pay for everything from the factory door.
  • FOB (Free On Board): the supplier delivers onto the ship in China; you pay sea freight, insurance, duty and everything after.
  • CIF: the supplier pays freight and insurance to your port; you pay duty and costs after arrival.
  • DDP (Delivered Duty Paid): the supplier quotes a price including delivery, duty and taxes.

DDP looks simple, but check what is included and who is the importer of record. If duties change after you agree a price, or the goods are under-declared, problems can still land on you.

Step 6: Turn it into a cost per unit

Add the product cost, freight, insurance, duty, non-recoverable taxes, broker fees and delivery from the port, then divide by the number of units. That landed cost per unit is the number to use in your pricing. The landed cost calculator does this with your own rates, including currency conversion and the choice between US-style and UK-style valuation. The landed cost guide explains each step in more detail.

Practical tips

  • Ask your freight forwarder or broker for a duty estimate before you place a large order, not after it ships.
  • Keep the commercial invoice, packing list and HS codes consistent; mismatches cause delays and inspections.
  • Build a buffer into your margins for duty changes - for goods from China, they have been frequent.
  • Recalculate landed cost for each new shipment. Freight prices, exchange rates and duty rates all move.