Why import duty matters to a first-time founder
Import duty raises landed cost and may be due before goods are released, creating a cash-flow need. The rate can change with the product’s commodity code, origin and trade agreement. Founders should calculate duty before setting prices and keep evidence supporting every declaration.
Examples of import duty
A company imports bicycles valued at £50,000. The applicable duty rate is 6%, producing £3,000 duty before any import VAT or clearance fees. If valid origin evidence gives preferential treatment under a trade agreement, the rate may differ, so the company retains the supplier declaration and classification record.
Common misunderstanding
Import duty is not the same as import VAT, sales tax, freight or a broker’s fee, although several charges may appear on one clearance statement. The seller paying transport also does not necessarily bear duty. Liability depends on the customs declaration, delivery terms and law of the importing territory.
When to use it
Use import duty when modelling landed cost, preparing a customs entry or explaining a border charge. Confirm classification, customs value, origin and available relief using current official guidance or a qualified adviser. Never use a false description, undervalued invoice or fabricated origin document to avoid duty; that may be criminal customs fraud.