How Does UK Customs Clearance Work?

UK customs clearance is the process of declaring goods entering the UK, providing the required customs information and dealing with any Customs Duty, Import VAT, licences or restrictions before the goods can be released.

For a typical business importing goods into Great Britain, the process looks like:

Goods shipped to the UK

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Goods arrive at the border

↓

Customs declaration submitted

↓

HMRC checks the declaration

↓

Customs Duty and Import VAT dealt with

↓

Goods cleared

↓

Goods delivered to the business

Many businesses use a customs agent, freight forwarder or courier to handle this process.

What Is Customs Clearance?

Customs clearance allows HMRC and other relevant authorities to check goods entering the country.

The process helps establish:

what the goods are;
who is importing them;
where they originated;
their customs value;
whether Customs Duty applies;
whether Import VAT applies;
whether licences are required; and
whether the goods are restricted.

Commercial imports generally need an appropriate customs declaration.

Do I Need an EORI Number?

Businesses importing goods into England, Scotland or Wales generally need an EORI number beginning with:

The EORI number identifies the business for customs purposes.

For example:

UK limited company

↓

Imports products from China

↓

GB EORI used on customs declaration

Different EORI requirements can apply to certain movements involving Northern Ireland.

What Is a Customs Declaration?

A customs declaration provides HMRC with information about the imported goods.

It can include:

importer details;
EORI number;
commodity code;
product description;
country of origin;
customs value;
quantity;
customs procedure;
licences or certificates; and
applicable duties and taxes.

The information must be accurate because it determines how the shipment is treated at customs.

Who Makes the Customs Declaration?

You can potentially make the declaration yourself, but many businesses appoint someone to handle customs for them.

This might include a:

customs broker;
freight forwarder;
logistics company;
courier; or
customs agent.

For example, your freight forwarder may transport the shipment from China and arrange the UK customs declaration when it arrives.

However, businesses should still check that the information supplied to customs is correct.

What Is a Commodity Code?

Every product needs the appropriate commodity code for customs purposes.

The commodity code helps determine:

Customs Duty rate

Import VAT treatment

Import restrictions

Licences

Quotas

and other customs measures.

For example, importing clothing may involve a different commodity code and Customs Duty rate from importing electronic equipment.

The correct code can be found through the UK Trade Tariff.

Why Does Country of Origin Matter?

The customs declaration also needs information about where the goods originate.

This is not necessarily the country they were shipped from.

For example:

Goods manufactured in China

↓

Stored in Netherlands

↓

Shipped from Netherlands to UK

The goods may still have Chinese origin.

Origin can affect Customs Duty and whether preferential tariff treatment is available.

How Is the Customs Value Calculated?

The importer must provide the appropriate customs value.

Depending on the transaction, this can include:

Price of goods

Freight

Insurance

Certain additional costs

Customs value

The customs value is important because it can affect the amount of Customs Duty and Import VAT payable.

How Is Customs Duty Calculated?

For goods subject to a percentage-based tariff, a simplified calculation is:

Customs value × Customs Duty rate = Customs Duty

For example:

Customs value: £20,000

Illustrative duty rate: 5%

Customs Duty:

£20,000 × 5% = £1,000

The actual duty rate depends on factors such as the commodity code, origin and current UK tariff measures.

Some goods may have a 0% Customs Duty rate.

What About Import VAT?

Import VAT is separate from Customs Duty.

A simplified calculation can involve:

Customs value

Customs Duty

Relevant additional costs

Import VAT value

The appropriate UK VAT rate is then applied.

Import VAT may potentially be recoverable by a VAT-registered business, subject to the normal VAT recovery rules.

Customs Duty generally remains an import cost.

What Is Postponed VAT Accounting?

VAT-registered businesses may be able to use Postponed VAT Accounting (PVA).

Instead of paying Import VAT upfront and reclaiming it later, qualifying businesses can account for Import VAT through their VAT Return.

A simplified process is:

Goods imported

↓

Import VAT calculated

↓

VAT declared on VAT Return

↓

Eligible Import VAT reclaimed on same Return

This can help businesses manage cash flow.

What Happens When the Goods Reach the UK?

When the shipment reaches the UK, it may initially be held while the customs process is completed.

The declaration is submitted and the goods can be subject to customs checks.

If everything is correct:

Declaration accepted

↓

Taxes and duties dealt with

↓

Any required checks completed

↓

Goods released

↓

Shipment continues to destination

If customs requires additional information, clearance can take longer.

Can HMRC Inspect the Goods?

Yes.

HMRC or another relevant authority can request additional documentation or checks.

For example, customs may want to verify:

product description;
commodity code;
declared value;
country of origin;
quantity;
licences; or
supporting documentation.

Some goods can also be subject to physical examination.

What Documents Are Needed for Customs Clearance?

The exact documents depend on the shipment, but commonly required information can include:

Commercial invoice

Packing list

Transport document

EORI number

Commodity code

Country of origin

Customs value

Import licences or certificates where required

Insurance information where relevant

Your customs agent may request these documents before the shipment arrives.

What Is a Commercial Invoice?

The commercial invoice is one of the most important import documents.

It usually includes information such as:

seller;
buyer;
description of goods;
quantity;
price;
currency;
shipping terms; and
other transaction information.

Incorrect or incomplete invoices can cause customs delays.

What Is a Packing List?

A packing list provides information about how the shipment is packed.

It may include:

number of cartons;
product quantities;
gross weight;
net weight;
package dimensions; and
package identification.

Freight forwarders and customs agents can use this information during transport and clearance.

What Are Incoterms?

Incoterms help establish responsibilities between the buyer and seller.

Common examples include:

EXW

FOB

CIF

DAP

DDP

They can affect who is responsible for:

freight;
insurance;
customs formalities;
delivery; and
certain costs.

Before importing, make sure you understand who is responsible for UK customs clearance under your commercial agreement.

How Long Does UK Customs Clearance Take?

There is no guaranteed clearance time for every shipment.

A straightforward shipment with:

correct documents;
correct commodity codes;
accurate values; and
no additional checks

may clear relatively quickly.

Delays can occur because of:

missing documents;
incorrect declarations;
customs inspections;
unpaid charges;
licences;
product controls; or
incorrect commodity codes.

Businesses should therefore avoid promising customers delivery dates based solely on the international transit time.

Why Would Goods Be Held at Customs?

Common reasons can include:

Missing customs declaration

Incorrect EORI

Incorrect commodity code

Unclear product description

Incorrect customs value

Missing commercial invoice

Unpaid Customs Duty

Unpaid Import VAT

Missing licence

Product inspection

Origin questions

If your shipment is delayed, your customs agent or freight forwarder should normally be your first point of contact.

Do Goods From China Need Customs Clearance?

Yes, commercial goods imported from China into the UK generally need to go through the relevant customs procedures.

For example:

Chinese supplier

↓

Sea freight to UK

↓

UK customs declaration

↓

Customs Duty and Import VAT assessed

↓

Goods cleared

↓

Delivery to UK warehouse

The same general principle applies to goods imported from other non-UK countries.

Do Goods From the EU Need Customs Clearance?

Goods moving from the EU into Great Britain are generally subject to customs procedures.

However, qualifying goods can potentially benefit from preferential Customs Duty treatment under the UK-EU trade arrangements if the relevant rules of origin are satisfied.

Do not assume:

Shipped from EU = automatically 0% Customs Duty

The origin of the goods matters.

Can My Courier Clear the Goods?

Often, yes.

International couriers and freight companies commonly provide customs-clearance services.

They may:

prepare the declaration;
calculate charges;
contact you for documentation;
arrange payment; and
release the shipment for delivery.

However, the importer should still check that the correct information has been used.

Who Pays Customs Charges?

This depends partly on the commercial and shipping arrangement.

Possible charges include:

Customs Duty

Import VAT

Excise Duty where applicable

Customs broker fee

Courier administration fee

Port charges

Storage charges

Before ordering goods, establish who is responsible for each cost.

What Happens After Customs Clearance?

Once HMRC and any other relevant authorities have released the goods, they can normally continue to their destination.

For example:

Port

↓

Customs cleared

↓

Freight forwarder collects shipment

↓

Goods transported to warehouse

↓

Business receives stock

The importer should retain the customs and VAT records for accounting and compliance purposes.

Common UK Customs Clearance Mistakes

Businesses should avoid:

importing without the correct EORI;
using the wrong commodity code;
providing vague product descriptions;
declaring incorrect customs values;
confusing shipping country with country of origin;
forgetting Import VAT;
misunderstanding Incoterms;
missing licences or certificates;
assuming the freight forwarder is responsible for every error;
failing to check the customs declaration; and
calculating product costs without clearance charges.

Frequently Asked Questions

What is UK customs clearance?

UK customs clearance is the process of declaring imported goods to customs, dealing with applicable duties, taxes and controls, and obtaining release of the goods.

Do I need an EORI number?

Businesses importing into England, Scotland or Wales generally need an EORI beginning with GB.

Do I need a customs agent?

Not necessarily, but many businesses use a customs agent, freight forwarder or courier because customs declarations can be complicated.

Do I pay Customs Duty?

Potentially. The rate depends on factors including the product's commodity code, customs value and origin.

Do I pay Import VAT?

Import VAT can apply even where Customs Duty is 0%.

Can HMRC inspect my shipment?

Yes. Customs authorities can request documents or examine goods before releasing them.

What happens when customs clearance is completed?

The goods are released and can normally continue to their final UK destination.