What Is the Import Tax From the USA to the UK?

Goods shipped from the United States to the United Kingdom face two main charges at the border: customs duty, which varies by product, and import VAT at the standard rate of 20%. Because there is no comprehensive US–UK free trade agreement covering goods moving this way, most American products enter at the UK’s standard tariff rates. Alcohol and tobacco carry a third charge on top. The import tax from the USA to the UK on a typical parcel therefore lands somewhere between 20% and 30% of what you paid, though the exact figure depends on what you’re importing, what it’s worth, and how it’s sent.

How the Taxable Value Is Worked Out

Every charge starts from the same number: the customs value. HM Revenue and Customs bases this on the transaction value, which is the price the buyer actually paid the seller.¹ In practice, that means the invoice price.

You then add shipping and insurance up to the UK port of entry. Transport charges, loading and handling fees, and insurance premiums all fold in, giving a figure that functions like a CIF (Cost, Insurance, and Freight) calculation.¹ That total is the customs value, and it is the base for both duty and VAT.

Because the invoice is almost always in dollars, you convert to sterling using HMRC’s official monthly exchange rate, published on the Trade Tariff service.² The rate is set on the penultimate Thursday of each month and applies for the following calendar month. Live market rates don’t count.

Customs Duty

Customs duty is the first tax charged. The rate depends entirely on the product, identified by a commodity code. Every traded product has one, based on the international Harmonized System, and the UK version runs up to 10 digits.³ You look up the code and its duty rate using HMRC’s UK Trade Tariff tool.⁴

Rates vary widely. Some industrial materials and components enter at 0%, while certain food products, textiles, and consumer goods sit above 15%. You calculate duty by multiplying the customs value by the applicable percentage. For US-origin goods, standard tariff rates apply because there’s no preferential agreement in place.

Import VAT at 20%

The bigger charge is usually import VAT. The standard UK rate is 20%, applied to the customs value plus any duty already charged.⁵ You pay VAT on top of duty, not alongside it.

A worked example makes the arithmetic concrete. Say you import goods with a customs value of £1,000 and the duty rate for that commodity code is 6%:

Customs duty: £1,000 × 6% = £60
VAT base: £1,000 + £60 = £1,060
Import VAT: £1,060 × 20% = £212
Total tax: £272, or roughly 27% of the goods value⁶

Not everything is taxed at 20%. Some goods qualify for a reduced 5% rate, and others are zero-rated. Common zero-rated imports include most food and drink for human consumption (excluding alcohol, confectionery, and soft drinks) and young children’s clothing and footwear.⁷ Children’s clothing has to be designed and sized exclusively for young children; adult-style items in small sizes don’t qualify.⁸ Works of art, antiques, and collectors’ items may also attract a reduced rate.⁶ The Trade Tariff tool shows the VAT rate for each commodity code.

The £135 Low-Value Rule

Goods with an intrinsic value of £135 or less are treated differently. They’re exempt from customs duty entirely.⁹ The £135 figure covers the goods themselves, not shipping and insurance.

VAT still applies, but who collects it changes. For business-to-consumer sales at or below £135, the US seller is supposed to register with HMRC, charge UK VAT at checkout, and pay it directly.¹⁰

Alcohol and Tobacco Carry Extra Excise Duty

Alcohol and tobacco shipped from the US face a third layer of tax: excise duty. It sits on top of customs duty and import VAT, and the amounts are meaningful. Tobacco duty rates rise each year by the Retail Price Index plus two percentage points, with an extra one-off increase of £2.20 per 100 cigarettes (and £2.20 per 50g on other tobacco products) taking effect on 1 October 2026.¹¹

Excise goods are also excluded from the £135 low-value relief. A small bottle of bourbon worth well under £135 still attracts customs duty, excise duty, and VAT.¹² Different rules apply if you carry alcohol or tobacco into the UK as personal luggage rather than shipping it, with separate personal allowances that can trigger declarations at the border.¹³

Gifts Between Individuals

Parcels sent from one private person to another follow their own thresholds:

£39 or less: no customs duty and no import VAT
Between £39 and £135: no customs duty, but import VAT applies
Over £135: both customs duty and import VAT on the full value

To count as a gift, the item has to be sent between private individuals without any commercial element, and the customs declaration must describe it as a gift.¹⁴ HMRC does check. Marking a commercial purchase as a “gift” to avoid tax can result in seizure and penalties.

How You Actually Pay

For most individual buyers, the courier or postal service handles everything. FedEx, UPS, DHL, or Royal Mail pay the duty and VAT to HMRC on your behalf and then invoice you before delivering the parcel. They add a handling fee for doing this, often between £8 and £15 for postal items and sometimes more for private couriers. That fee covers preparing the customs declaration and fronting the payment. The parcel isn’t released until you settle their invoice.

Businesses that import regularly have other options, including hiring a customs agent, opening a duty deferment account with HMRC to pay monthly by direct debit, and using postponed VAT accounting to declare and recover import VAT on the same return rather than paying it up front at the border.¹⁵ Commercial importers also need an EORI number before they can make declarations or appoint an agent.¹⁶

Northern Ireland Follows Different Rules

Everything above applies to Great Britain, meaning England, Scotland, and Wales. Northern Ireland operates under separate customs arrangements under the Windsor Framework, with EU-style declarations, different tariff rate quotas, and EU VAT rules on goods.¹⁷ If your parcel is heading to Northern Ireland specifically, the tariff rates, declarations, and reliefs described here can differ, and the details need separate checking.

1
GOV.UK. Customs Valuation – Method 1 – Transaction Value
2
GOV.UK. March 2026 Monthly Exchange Rates
3
business.gov.uk. How to Use Harmonised System (HS) or Commodity Codes
4
GOV.UK. Trade Tariff – Look Up Commodity Codes, Duty and VAT Rates
5
GOV.UK. VAT Rates
6
GOV.UK. Paying VAT on Imports From Outside the UK to Great Britain and From Outside the EU to Northern Ireland
7
GOV.UK. VAT Rates on Different Goods and Services
8
GOV.UK. Young Childrens Clothing and Footwear (VAT Notice 714)
9
GOV.UK. Reforming the Customs Treatment of Low Value Imports Into the United Kingdom
10
GOV.UK. Changes to Tobacco Duty Rates
12
GOV.UK. Tax and Customs for Goods Sent From Abroad
13
GOV.UK. Bringing Goods Into the UK for Personal Use – Arriving in Great Britain
14
GOV.UK. Duties and Import VAT on Gifts
15
GOV.UK. Check When You Can Account for Import VAT on Your VAT Return
16
GOV.UK. Get an EORI Number
17
GOV.UK. Trading and Moving Goods In and Out of Northern Ireland