Transport Costs

You must pay duty and VAT on the delivery costs up to the point of introduction into the UK border. You must also pay VAT on any delivery costs incurred within the UK.

View Definitions and Scenarios.

What is classed as a delivery cost?

• the cost of transport
• the cost of insurance (including global or blanket policies)
• loading and handling charges
• container charges
• terminal/port charges
• any other charges involved in carrying the goods from one place to another

Transport costs are included in the purchase value of the goods

You must tell us what the total transport costs are from the point of introduction into the UK border to the point of delivery.

Transport costs are not included in the purchase value of the goods

You must tell is the total transport costs from the point of collection to the point of delivery. We will then add this on to the import declaration.

UK transport costs

You do not pay duty on the UK-only element of the tranport cost, but you must still pay VAT. If the UK-only element of the transport cost is included in the transport cost, then you must tell us so that we can make the appropriate adjustment.

You can calculate UK transport costs in one of two ways, according to IMPS04400 - Value for import VAT: normal rules: methods of calculating import VAT:

• Method 1: declare the actual costs of transport from the place of introduction into the UK border to the place of delivery
• Method 2: use the nationally agreed rates specified in IMPS04400

What about Incoterms?

Incoterms are the commercial terms that apply to a shipment, and specify the responsiblity of each party at various stages during transport. The Incoterms can be used as an indication as to what transport costs are included in the purchase value of the goods, but they are not absolute and the actual delivery costs will depend on the specific circumstances.

EXW, FCA, FAS, FOB

Delivery costs are not usually included in the purchase value of the goods

CFR, CIF

Delivery costs to the port of destination are usually included in the purchase value of the goods

CPT, CIP, DPU

Delivery costs to a specified place in the UK are usually included in the purchase value of the goods

DAP, DDP

The full delivery costs to the place of delivery in the UK are usually included in the purchase value of the goods

The content on this page is a summary of our understanding based on information on the HMRC website https://www.gov.uk/guidance/delivery-costs-to-include-in-the-customs-value.