HMRC customs charges explained for UK imports and parcels

What HMRC customs charges mean

HMRC customs charges are not a single fixed fee. For goods entering the UK, the amount payable can include import VAT, Customs Duty and excise duty. A postal operator or courier may also add its own handling, clearance or delivery administration charge.

Under current GOV.UK guidance, many non-excise parcels worth £135 or less are not charged Customs Duty, although VAT may still apply. Gifts have a separate £39 relief, but only where the parcel meets the conditions for a genuine private gift. For businesses, the calculation depends on the commodity code, customs value, origin, VAT rate and any relief or preferential tariff that can be claimed.

The practical point is that HMRC determines the tax treatment, while carriers often collect the money before delivery. This guide focuses on common import and parcel questions for readers following UK Customs rules, including how charges are calculated, when refunds may be possible and what the 2026 low-value import reform means for sellers and marketplaces.

What charges can appear on an import or parcel bill

A UK customs bill can bring together several different charges. Import VAT is a tax on the value of imported goods and is usually charged at the VAT rate that applies to those goods in the UK. Customs Duty is a tariff charge based on the product classification, country of origin and any applicable preference, suspension or relief. Excise duty is separate and can apply to products such as alcohol and tobacco, whether they are bought commercially or sent as a gift.

The line that causes most confusion on parcel notices is not always an HMRC tax. Royal Mail, Parcelforce and courier companies may charge a delivery, clearance or handling fee for presenting the parcel to customs and collecting tax from the recipient. GOV.UK consumer parcel guidance says the postal operator or courier will contact the recipient if VAT, duty or delivery charges must be paid before the goods are released. That is why a notice from a delivery company can look like one HMRC customs charge even when part of the amount is the carrier’s own fee.

For commercial importers, charges are normally handled through the Customs Declaration Service, often by an agent, freight forwarder or customs intermediary. Payment may be made immediately, through a cash account, through a duty deferment account or, for eligible VAT-registered businesses, by using postponed VAT accounting for import VAT.

Current thresholds for parcels and online purchases

The £135 threshold is central to many UK parcel questions, but it is often misunderstood. As of September 2026, current GOV.UK guidance states that for goods sent to Great Britain from outside the UK, Customs Duty is charged if the goods are excise goods or if they are worth more than £135. Non-excise goods worth £135 or less generally have no Customs Duty charge under the present low-value import relief.

VAT is treated differently. For goods bought by a UK customer and valued at £135 or less, overseas sellers and online marketplaces are generally expected to charge UK VAT at the point of sale, unless an exception applies. The £135 limit is based on the value of the consignment, not simply the value of each item inside the parcel. Where a consignment is worth more than £135, import VAT is normally collected at import, often by the carrier before delivery or through the importer’s customs payment process.

Gifts are a separate area. To qualify as gifts under GOV.UK guidance, goods must be sent between private individuals, intended for personal use, linked to an occasion such as a birthday or anniversary and described as gifts on the customs declaration. A commercial order marked as a gift does not become a gift for customs purposes. If several gifts are packed in one parcel, relief can depend on whether they are separately wrapped, separately valued and clearly intended for different people.

How HMRC customs charges are calculated for business imports

For business imports, classification comes first. A commodity code identifies the product and is used to determine duty rates, import VAT treatment, restrictions, documentary requirements and potential preferential rates. HMRC guidance warns importers not to rely blindly on an overseas supplier’s commodity code. Only part of the classification system is internationally harmonised, and the UK treatment can still differ at the detailed level.

After classification, the importer needs the customs value. In many transactions, this starts with the price paid for the goods, then adds transport, insurance and related costs required to bring the goods to the UK border. When Customs Duty applies, it is normally calculated on the customs value. Import VAT is then calculated on a wider VAT value, which can include the customs value, duty, excise duty and incidental costs connected with importation.

Here is a simplified example for illustration only. If a parcel has goods worth £250, shipping and insurance of £20, and an applicable duty rate of 4%, the duty base would be £270 and Customs Duty would be £10.80. If the applicable VAT rate is 20%, import VAT would be calculated on £280.80, giving VAT of £56.16. The tax total would be £66.96 before any courier handling fee. A real declaration may differ because valuation rules, origin evidence, tariff preference, anti-dumping measures or product-specific controls can change the result.

Businesses should also separate tax cost from cash-flow cost. A duty deferment account allows an importer to make one monthly Direct Debit payment instead of paying each consignment individually. Postponed VAT accounting allows a UK VAT-registered business to account for import VAT on its VAT Return rather than paying it upfront at the border and reclaiming it later, subject to the normal input tax rules. These options do not remove the tax liability, but they can reduce disruption for regular import flows.

Northern Ireland and excise goods need separate checks

Great Britain and Northern Ireland do not always follow the same import duty route. GOV.UK parcel guidance distinguishes goods sent to Great Britain from outside the UK from goods sent to Northern Ireland from outside the UK and the EU. For Northern Ireland, duty can depend on whether goods are considered ‘at risk’ of entering the EU. Where goods are ‘not at risk’, the UK rate may apply to goods above the threshold. Where goods are ‘at risk’, the EU rate may apply, with different treatment for business and non-business recipients.

This matters in import planning because two consignments with the same product and value can raise different duty questions depending on destination, origin and risk status. A seller shipping to Belfast should not simply copy the treatment used for a shipment to Birmingham without checking the Northern Ireland tariff and customs route.

Excise goods also sit outside the usual low-value comfort zone. Alcohol and tobacco can attract excise duty even where the declared value is low and even where the goods are gifts. Labelling, health warning, fiscal marking and duty stamp rules can also affect whether goods are released or seized. For traders, excise classification and licensing should be reviewed before goods move, not after the courier asks for payment. See also: Compliance.

The 2026 low-value import reform changes the direction of travel

The current £135 Customs Duty relief is not expected to remain in its present form. The UK government announced at Budget 2025 that it would remove the customs duty relief for low-value imports and reform the way goods valued at £135 or less are declared. A consultation ran from December 2025 to March 2026, and the government published its consultation response and policy paper on 13 July 2026.

The key decision is that low-value imports will become subject to tariffs under new customs arrangements. The July 2026 policy documents also refer to a definition of low-value imports by consignment value, new data and duty processes, and the concept of a fiscal representative. In this context, a fiscal representative is a UK-based business that can be made jointly and severally liable for customs debt arising from another person’s low-value import declaration.

The timing has developed. Budget 2025 referred to March 2029 at the latest. The July 2026 tax update stated that delivery would be accelerated by six months to October 2028 at the latest, and the July 2026 policy paper says the measure will come into force on a day appointed by Treasury regulations by October 2028 at the latest. Until those detailed rules and notices are in force, the current threshold-based treatment continues to matter for live shipments.

The scale of the reform is significant. HMRC analysis in the 2026 consultation response estimated that approximately 600 million low-value import consignments were imported using the Bulk Import Reduced Data Set in 2024, based on sample data. That volume helps explain why the government is not treating the change as a simple tariff switch. It also explains why sellers, online marketplaces, parcel operators and customs intermediaries need time to adjust systems, data collection and liability controls.

For importers and marketplaces, the practical message is to prepare for a future in which low-value sales may require stronger classification, origin and duty payment processes. For consumers, the change could make the landed cost of some imported small parcels more visible. However, the exact operational details, including any additional administrative fee, should not be treated as final until HMRC and HM Treasury publish the relevant secondary legislation and guidance.

How to reduce unexpected customs charges

Unexpected charges usually come from one of five issues: the wrong commodity code, incomplete valuation, missing origin evidence, confusion over the £135 or £39 thresholds, or treating a courier fee as if it were an HMRC tax. The following checks can reduce avoidable surprises.

• Confirm the commodity code before shipping. The UK Trade Tariff is the reference point for checking duty rates, VAT treatment, restrictions and possible reliefs.
• Check the total consignment value. For low-value import rules, the consignment value matters. Splitting or combining goods can affect treatment.
• Separate product value from shipping and insurance. Duty and VAT calculations can include costs beyond the invoice price of the goods.
• Verify whether VAT has already been charged. For many online orders worth £135 or less, VAT should be collected at sale by the seller or marketplace.
• Keep evidence of origin. Preferential duty rates usually require proof that the goods meet origin rules under the relevant trade agreement.
• Review courier notices carefully. A bill may include HMRC taxes plus a separate handling or clearance fee charged by the operator.
• Use postponed VAT accounting where eligible. UK VAT-registered businesses may improve cash flow by accounting for import VAT on the VAT Return.
• Act quickly on disputed charges. If goods are returned or the tax appears too high, GOV.UK guidance points parcel recipients to BOR 286 for Royal Mail or Parcelforce deliveries and C285 for other courier or freight deliveries.

For regular importers, customs charges should be modelled before goods are bought, not after they land. A landed-cost worksheet should include commodity code, origin, customs value, freight, insurance, duty rate, VAT rate, excise exposure, clearance fees and any relief claim. This is more reliable than using a flat percentage because UK tariff outcomes vary sharply by product and origin.

Frequently asked questions

Are HMRC customs charges the same as courier handling fees?

No. HMRC customs charges are taxes and duties due on importation, such as import VAT, Customs Duty and excise duty. A courier or postal handling fee is a separate commercial charge for customs clearance, payment collection or delivery administration.

Why did I pay VAT if my parcel was worth less than £135?

The £135 figure is mainly relevant to Customs Duty relief for many non-excise goods. VAT can still apply. For many online purchases worth £135 or less, the seller or marketplace should charge UK VAT at the point of sale. If VAT was not handled at sale, the carrier may collect it before delivery in situations covered by the rules.

Can I avoid charges by marking goods as a gift?

Only genuine gifts can use the gift rules. The goods must be sent between private individuals, intended for personal use, linked to an occasion and accurately described on the customs declaration. Commercial purchases do not qualify simply because a sender writes ‘gift’ on the parcel.

Will the £135 Customs Duty relief disappear?

Yes, under the government’s July 2026 policy direction, the UK plans to remove the low-value import duty relief and introduce new arrangements by October 2028 at the latest. The current rules remain important until the appointed date and detailed implementation rules take effect.

What should a business check before importing goods into the UK?

A business should check the commodity code, origin, customs value, duty rate, VAT rate, product controls, documentation, payment method and whether postponed VAT accounting or a duty deferment account is appropriate. For Northern Ireland movements, the ‘at risk’ question may also need review.