How to Correctly Calculate Duty? The Process of Paying Duty in the UK

The first step in the process of calculating duty is identifying the right commodity code, also known as the Commodity Code. This is a key element, without which you cannot carry out the next steps. Detailed information on commodity codes can be found in our dedicated article. Next, you need to convert the value of the goods into British pounds (GBP). For this you use the official exchange rates, published monthly by the British customs authorities. The third step is calculating the "Value for Customs Duty", i.e. the value on which duty is calculated. There are five methods for working out this value, each applied in a specific order. If the first method cannot be applied, you move on to the second, and if that is not possible, to the third, and so on. All evidence confirming which method was used must be kept for four years. Once the "Value for Customs Duty" has been calculated, you can move on to calculating the amount of duty. Duty is calculated from the "Value for Customs Duty" multiplied by the rate under the relevant customs tariff. It is worth noting here that import VAT is not included at this stage. Once the amount of duty due has been calculated, the final step is, of course, paying it. To pay the duty, you will need the customs declaration reference number (CDSI), which is issued when the declaration is filed. This number consists of a string of 12 digits and letters, preceded by the letters 'CDSI'. Each declaration is given its own separate number. Payment can be made in a number of ways, including through Bacs, CHAPS, online or telephone banking. It is also possible to pay by debit card or company credit card, as well as by cheque. How long it takes for the payment to reach HMRC depends on the payment method chosen. For payments by online banking, telephone banking, CHAPS or card, the payment is recorded the same day or the next day. If the payment is made via Bacs, this can take up to three business days.