Import VAT is charged when goods enter a country from outside its applicable customs or VAT territory. It often surprises importers because it is not necessarily calculated on the supplier’s invoice price alone. Freight, insurance, Customs Duty and other costs may all increase the amount on which VAT is charged.
This guide explains how Import VAT works in the UK and Ireland, who pays it, how to calculate it and when a business can reclaim it.
This is general information, not tax or legal advice. Confirm the treatment of individual shipments using current official guidance or a customs specialist.
What is Import VAT?
Import VAT is the VAT charged on imported goods. It generally applies when:
- Goods enter Great Britain – England, Scotland or Wales- from outside the UK.
- Goods enter Ireland from outside the EU, including most goods arriving from Great Britain.
- Goods enter Northern Ireland from outside the EU, subject to Northern Ireland’s special rules for goods.
Import VAT normally uses the rate that would apply if the goods were purchased domestically. The standard rate is currently 20% in the UK and 23% in Ireland, although some products qualify for reduced or zero rates.
UK and Ireland Import VAT compared
| Question | Great Britain | Ireland |
| When does Import VAT arise? | Goods enter from outside the UK | Goods enter from outside the EU |
| Standard VAT rate | 20% | 23% |
| Can VAT be postponed? | Yes -Postponed VAT Accounting | Yes- Postponed Accounting |
| Can eligible businesses reclaim it? | Yes, subject to input-tax rules | Yes, subject to normal deductibility rules |
| Official tariff tool | UK Trade Tariff | EU TARIC |
Northern Ireland requires separate consideration. Its treatment can depend on the goods’ origin, route, destination and whether they are considered at risk of entering the EU.
How is Import VAT calculated?
The basic calculation is:
Customs value + Customs Duty + applicable additional costs = value for Import VAT
Value for Import VAT × VAT rate = Import VAT due
The taxable value may include:
- Cost of the goods
- Freight and insurance
- Packing, commission and handling
- Customs Duty
- Excise Duty
- Other qualifying costs up to the relevant destination
Calculation example
Assume goods have a customs value of £10,000 when imported into Great Britain:
| Calculation | Amount |
| Customs value | £10,000 |
| Customs Duty at an illustrative 4% | £400 |
| Additional qualifying costs | £100 |
| Value for Import VAT | £10,500 |
| Import VAT at 20% | £2,100 |
The importer would therefore face £400 in Customs Duty and £2,100 in Import VAT.
For an equivalent Irish import, applying Ireland’s 23% standard rate to a €10,500 VAT value would produce €2,415 in Import VAT.
The 4% duty rate is only an example. The actual rate depends on the commodity code, customs origin, applicable trade measures and available reliefs.
If you’re importing into the UK
Goods entering Great Britain are generally charged Import VAT at the same rate as an equivalent UK purchase.
UK importers should remember:
- Import VAT can apply even where Customs Duty is 0%.
- For many consumer consignments worth £135 or less, VAT is collected by the seller or online marketplace at the point of sale.
- VAT-registered businesses may use Postponed VAT Accounting for eligible imports.
- If VAT is paid at import, the business normally needs the appropriate import VAT certificate or statement before reclaiming it.
- The customs declaration must contain the correct importer, EORI, VAT, classification and valuation information.
HMRC provides detailed guidance on VAT and imports from abroad.
If you’re importing into Ireland
Goods entering Ireland from outside the EU are generally subject to Irish Import VAT. This includes most imports from Great Britain.
Irish importers should check:
- Whether the standard 23% rate or another Irish VAT rate applies
- The correct TARIC commodity code
- Whether the goods qualify for preferential Customs Duty
- Whether Postponed Accounting can be used
- Whether freight, insurance and other charges have been included correctly
Goods arriving from Northern Ireland may follow EU VAT rules for goods and should not automatically be treated like imports from Great Britain.
From 1 July 2026, a €3 customs charge per item also applies to most consumer e-commerce packages valued at €150 or less arriving in Ireland from outside the EU. IOSS arrangements and exclusions can affect what is collected at purchase or import.
Revenue’s Postponed Accounting guidance explains the relevant conditions.
Who pays Import VAT?
The importer named on the customs declaration is generally responsible for the Import VAT and other customs liabilities.
Payment may be handled through:
- The importer’s customs account
- A duty deferment account
- A courier or postal operator
- A customs agent under an agreed arrangement
- Postponed accounting through a VAT return
Incoterms may establish whether the buyer or seller covers import costs. However, the party that transfers the money is not automatically the party entitled to reclaim the VAT. The correct importer must be identified on the customs declaration.
Import VAT versus Customs Duty
Import VAT and Customs Duty are separate charges.
| Import VAT | Customs Duty |
| Based on the VAT rate applicable to the goods | Based on classification, origin and customs value |
| Calculated after applicable duty is added | Usually calculated before Import VAT |
| May be reclaimed by an eligible VAT-registered importer | Not reclaimed through a VAT return |
| May be postponed | May be paid, deferred or suspended |
| Can apply when the duty rate is 0% | May be reduced under a trade agreement |
A trade agreement may reduce Customs Duty without removing Import VAT.
Can Import VAT be claimed back?
A VAT-registered business can generally reclaim or deduct Import VAT when:
- It is the owner and importer of the goods.
- The goods support taxable business activities.
- The customs declaration correctly identifies the business.
- It holds the required Import VAT evidence.
- The amount is correctly recorded on its VAT return.
- Normal input-tax or deductibility conditions are met.
Recovery may be restricted where goods are used for exempt, private or non-business purposes. A customs agent cannot usually reclaim the VAT simply because it arranged the import or advanced the payment.
Businesses that are not VAT-registered will normally be unable to reclaim Import VAT, making it part of the total landed cost.
What is postponed VAT accounting?
Postponed accounting allows an eligible VAT-registered business to report Import VAT through its VAT return instead of paying it immediately at the border.
Where the business has full recovery rights, it may declare and deduct the VAT on the same return. This can provide a significant cash-flow benefit, but the VAT must still be reported correctly.
- In the UK, this is called Postponed VAT Accounting.
- In Ireland, Postponed Accounting is available to eligible traders registered for both VAT and Customs and Excise.
Estimating your Import VAT
Before using an Import VAT and duty calculator, gather:
- The destination
- Customs value
- Commodity code
- Customs origin
- VAT rate
- Freight and insurance costs
- Applicable Customs Duty or excise charges
A UK Import VAT and duty calculator can provide an estimate, but its result should be checked against the UK Trade Tariff, EU TARIC or specialist advice.
Get Import VAT support from Allied Group
Import VAT depends on more than a single tax rate. Classification, origin, valuation, destination and the customs procedure all affect the final cost. Errors can cause overpayments, delayed clearance or problems reclaiming VAT.
Allied Group helps businesses move goods compliantly across Great Britain, Northern Ireland, Ireland and the EU. Its team can assist with customs declarations, duty and VAT arrangements, Postponed VAT Accounting and supporting documentation.
Make your next import simpler before it reaches the border.
Explore Allied Group’s customs clearance services
Email: info@allied-group.co.uk Or call 028 3066 0988
