Customs duties are calculated in two steps: first the customs value of the goods is established - the transaction price plus the cost of transport and insurance to the EU border - and then it is multiplied by the duty rate assigned to the goods' HS code. VAT is only added afterwards, on the sum of the customs value and the duty, not on the invoice price alone. If the goods meet the rules of origin under the UK-EU agreement and the right document is held, the duty rate can be 0%, which lowers the whole amount owed.
Contents
In short — what you'll learn
- ✓ How to prepare the process and documents
- ✓ How the declaration and checks work
- ✓ How to stay compliant and keep clean records
How to prepare the process and documents
Scope of responsibility between the parties
Minimum data set for the declaration
Find the full range of UK customs clearance services.
How the declaration and checks work
A correct customs declaration relies on complete data and on getting it to the official systems on time. For every stage - from the vehicle notification, through submitting the declaration, to release of the goods - there are set time windows and data-exchange formats with the authorities.
Operational stages from notification to release
The most common risk points and how to reduce them
The most common risk points are an incorrect CN classification, an understated customs value, no active EORI number, and mismatched data between the invoice and the consignment note. Any one of these mistakes can hold up clearance or trigger an inspection. Checking everything before the declaration is submitted keeps the process repeatable and resistant to misinterpretation from unofficial sources. If any part of the procedure is unclear, check the current official notice before the final declaration.
How to stay compliant and keep clean records
Record-keeping, corrections and evidence of due diligence
Customs documents should be kept on file for at least 4 years, in line with HMRC's requirements. Any correction to a declaration requires keeping the original document along with a written justification for the change. Evidence of due diligence - such as correspondence with the supplier, customs-value verification records and certificates of origin - provides essential protection during a post-clearance audit and helps limit the risk of costly proceedings.
Working with a customs agency and internal audit
Working with a customs agency should be structured: a clear scope of authorisation, an agreed procedure for passing on documents, and a defined way of communicating with HMRC. A regular internal audit - quarterly, or after any significant change in the rules - helps spot gaps between actual practice and official requirements before an external inspection does.
Summary
In summary: when it comes to 'how to calculate customs duties', what matters most is running the process according to current official guidance, with a clear division of responsibility and every decision documented. This approach limits delays, reduces the number of corrections and makes it easier to defend your records during an inspection. If any requirement is unclear, check the current guidance from GOV.UK or EC TAXUD before submitting a declaration.
Legal basis and sources
- GOV.UK: Goods Vehicle Movement Service guidance
- GOV.UK: Making an entry summary declaration
- EC TAXUD: EU EORI validation
If regulations or system notices are updated, check the current guidance on GOV.UK or KAS before submitting a declaration.
Frequently asked questions
How do you calculate customs duties when importing goods into the United Kingdom?
Customs duties are calculated from the customs value of the goods (the invoice price plus the cost of transport to the UK border), the CN code from the Trade Tariff, and the applicable duty rate. Import VAT is then added on top of the duty - 20% of the customs value plus the duty - and excise duty may also apply. A free calculator is available on the GOV.UK Trade Tariff.
What EORI number is required for customs clearance between Poland and the United Kingdom?
Every company trading goods with the United Kingdom must hold an active EORI number - in the UK it is issued by HMRC (format GB + 12 digits), and in Poland and the EU by the relevant customs authority (format PL + 10 digits). Both numbers can be checked in the EC TAXUD database before a declaration is submitted.
What are the consequences of an incorrect CN classification on a customs declaration?
An incorrect CN classification can result in interest being charged on underpaid duty, an inspection being opened, and an administrative penalty. HMRC can challenge declarations retrospectively for up to 4 years. To reduce this risk, it's worth confirming the classification with Binding Tariff Information (BTI) issued by the relevant customs authority.
How long do customs documents need to be kept in the United Kingdom?
HMRC requires customs documents to be kept for at least 4 years from the date the declaration is accepted. This covers commercial invoices, consignment notes, certificates of origin and correspondence related to the clearance. Missing documentation during an inspection is treated as a lack of evidence of due diligence and can lead to penalties.
What's the difference between the T1 procedure and a standard export clearance?
The T1 (common transit) procedure is used to move goods under customs supervision without paying duty in the transit countries - the goods remain suspended until the procedure is closed at the office of destination. A standard export clearance ends at the border of the country of dispatch, whereas T1 covers the whole route from the office of departure (e.g. in the UK) to the office of destination (e.g. in Poland or another EU country).
Related guides
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