To find your import duty rate, first find your product's HS (commodity) code, then look that code up in the tariff of the country you import into: the UK Trade Tariff, the US Harmonized Tariff Schedule (HTS) or the EU's TARIC. The code decides your duty rate and, in the UK, how the goods are treated for import VAT. Do this before you order stock, because a wrong guess can swing your margin by several points.
What an HS code is and how many digits you need
The Harmonized System is an international way of naming goods with numbers. GOV.UK describes commodity codes as internationally recognised reference numbers, and notes that only the first 6 digits are used worldwide. Each country adds its own digits after that, and the duty rate is set at the national level.
In the US, the USITC explains that the HTS has 4-digit headings and 6-digit and 8-digit subheadings. The legal text ends at 8 digits, which is where tariff rates are assigned, and a 2-digit statistical suffix makes the code 10 digits long. The first 6 digits are international. The 8 and 10 digit levels are unique to the United States.
So a supplier's 6-digit HS code is a good starting point, but the rate you pay depends on the full national code of the country you import into.
Step 1: Describe the product the way the tariff does
Tariffs classify goods by what they are made of, what they do and how they are presented. GOV.UK suggests having these ready before you search: the type of product, what it is used for, the materials it is made from, how it is produced and how it is packaged.
Write these down for your product. A silicone kitchen spatula and a stainless steel one can fall under different codes, and a "set" can be classified differently from its individual parts.
Step 2: Search the official tariff for your market
Use the official tool for each market you sell into.
| Market | Where to look | What you get |
|---|---|---|
| UK | The UK Trade Tariff on GOV.UK (browse by section or search by keyword) | Commodity code, duty rate, import VAT rate |
| US | The Harmonized Tariff Schedule on hts.usitc.gov | 8 or 10 digit code, General (Column 1) rate, Special rate |
| EU / Germany | TARIC, the EU's integrated tariff | 10 digit code, third-country duty, preferential rates |
In the US schedule, the Column 1 General rate applies to countries with normal trade relations, which covers most trading partners. The Special column shows lower or zero rates under trade agreements and preference programs. The USITC notes that these special rates must be claimed on the shipment. If they are not claimed, the General rate applies.
In the US, many products from some countries also carry additional tariffs on top of the General rate, and these change often. After you find the HTS code, check the current additional duties for your country of origin on the CBP and USTR websites before you finalise a price.
Step 3: Check your code against real rulings
A keyword search can lead you to a code that looks right but is not. In the US, you can search the CBP rulings database (CROSS) for similar products and read how customs classified them. The USITC also notes that a binding ruling can be requested from CBP. For high-volume or high-value products, a ruling or advice from a licensed customs broker is cheaper than a wrong declaration.
Step 4: Turn the rate into a cost per unit
Duty is normally a percentage of the customs value, which in most systems starts with the transaction value, the price paid for the goods. The EU describes the transaction value as the total amount paid or to be paid for the imported goods. Import VAT is then built on top of that value plus the duty.
GOV.UK says the UK import VAT value is the customs value plus incidental expenses such as packing, transport and insurance up to the first destination in the UK, plus any customs duty payable. In Germany, the customs authority states that import VAT is based on the customs value, plus duties, plus transport costs to the first destination in the EU.
Worked example (illustrative numbers)
The duty rate below is a placeholder to show the method. Replace it with the rate you find in your own lookup.
You import a product from a supplier into the UK:
| Line | Amount |
|---|---|
| Goods price paid to supplier | £5,000 |
| Freight and insurance to the UK port | £600 |
| Customs value used here (goods + freight + insurance) | £5,600 |
| Duty at an assumed 4% | £224 |
| Import VAT base (£5,600 + £224) | £5,824 |
| Import VAT at 20% | £1,164.80 |
Duty is a real cost. Import VAT is usually recoverable if you are VAT registered and import in your own name, but you must fund it until you reclaim it. That cash timing matters when you plan your first order. For a full cost build-up per unit, see Landed Cost: How to Calculate the True Cost of Your Product, and for the rules around VAT on Amazon in the UK and EU, see VAT for Amazon Sellers in the UK and EU.
Step 5: Put duty into your margin check
Add duty to the landed cost per unit and then check margin after marketplace fees, shipping, returns and ads. If the duty rate is high, test whether the product still works at a realistic selling price. Ecomtoro helps you at this stage: you can research a product, compare demand and competition, and test the margin before you commit to stock. See Ecomtoro for how it works.
Common mistakes
Using the supplier's code without checking it is the most common one. Suppliers sometimes use a code that gives a lower duty rate in their own country. Other mistakes are classifying a product by its marketing name instead of what it is, forgetting freight and insurance in the customs value, and treating import VAT as a cost when it is recoverable. Also remember that country of origin affects the rate, so ask your supplier where the goods are made, not just where they ship from.
Frequently asked questions
What is the difference between an HS code and a commodity code?
An HS code is the international 6-digit part. A commodity code (UK), HTS code (US) or TARIC code (EU) adds national digits to it. The national code is the one that sets your duty rate.
Can I use the same HS code for the US, UK and EU?
The first 6 digits are the same, but the full code and the rate differ by market. Look up the code in each market's own tariff before you set prices.
Who is responsible for choosing the right code?
The importer is responsible for the declaration, even if a supplier or freight forwarder suggested the code. A customs broker can classify the product for you, and in the US you can check CBP rulings for similar products.
Do I pay duty and VAT on the same value?
Not exactly. Duty is a percentage of the customs value. Import VAT is based on the customs value plus the duty and certain costs, such as transport to the first destination. That is why VAT is calculated after duty.
Is import VAT a cost to my business?
If you are VAT registered and can reclaim it, import VAT is mainly a cash flow item rather than a lasting cost. The US has no VAT, so this applies to UK and EU sales.