Why duty matters to a first-time founder
Duty can change landed cost, pricing and cash needed before goods are released. The rate may depend on product classification, origin, value and the countries involved. Founders importing stock should calculate it before ordering, because a wrong assumption can erase margin or leave goods held at the border.
Examples of duty
A UK retailer imports coffee machines with a customs value of £40,000. If the applicable duty rate is 4%, customs duty is £1,600 before considering import VAT, freight adjustments or relief. The actual treatment depends on the commodity code, origin evidence, valuation rules and current UK tariff.
Common misunderstanding
Duty is not always the same as import VAT or a tariff rate quoted without context. Customs duty, excise duty and other transaction duties have different tax bases and rules. A tariff is a schedule or measure applying to trade, while duty is the amount or tax legally charged under the relevant regime.
When to use it
Check it before importing, exporting or selling goods subject to excise or another transaction duty. Confirm classification, origin, customs value, relief and who is importer of record under the contract. Do not misdescribe goods, value or origin to reduce duty; customs fraud is illegal and can lead to seizure, penalties or prosecution.