Customs and Import Duties Explained

Import duties (also called customs duties or tariffs) are taxes levied by the destination country's government on imported goods. They are charged as a percentage of the customs value of the goods (usually the transaction value — what you paid for them).

Duties are in addition to VAT/GST in the destination country. A product entering the EU faces both import duty (on the product value) and EU VAT (on the product value plus import duty).

Duties vary enormously by product type and destination market — from 0% on some goods between trading partners with free trade agreements, to 25%+ on certain categories in markets with protectionist policies.

Every physical product is classified using the Harmonised System (HS) — a global product classification system. Your product's HS code determines:

• The duty rate in each market
• Whether any preferential rates apply (e.g. UK-EU trade)
• Whether any import licences or certifications are required

The HS code structure:

• 6 digits are globally standardised
• Additional digits (up to 10) are country-specific

Finding your HS code: use the UK government's Trade Tariff tool at gov.uk, or ask AskBiz: *'What is the HS code for [product description]?'* — AskBiz can suggest likely HS codes and the corresponding duty rates for common destination markets.

The UK has trade agreements with many countries that reduce or eliminate import duties:

• EU: Under the UK-EU Trade and Cooperation Agreement, goods with sufficient UK origin can enter the EU at 0% duty (but customs declarations are still required and rules of origin must be met)
• US: No comprehensive free trade agreement — duties apply at standard MFN rates
• UAE/GCC: 0% duty on most goods (GCC has a preferential arrangement with the UK)
• Australia/New Zealand: Covered by the UK-AUKFTA (Comprehensive and Progressive Agreement)
• Japan: Covered by UK-Japan CEPA

Always verify current rates with the government Trade Tariff tool — preferential rates require you to meet rules of origin requirements and provide appropriate documentation.

The AskBiz Landed Cost Calculator includes an import duty field that automatically applies the correct rate based on your HS code and destination market. To use it:

1. Open the Landed Cost Calculator

2. Enter your product description and HS code

3. Select the destination country

4. The calculator fetches the applicable duty rate and includes it in the total landed cost

Always include duties in your landed cost calculation before setting export prices. A product with a 25% duty rate and 45% gross margin at ex-works price may have negative margin at the landed cost level.