Import duty and landed costs
Most sellers price products before they know what they cost. We work out the true landed cost of each shipment, from commodity code to import VAT and freight, and carry it into COGS per SKU.
Commodity code and origin checksPostponed VAT accounting handledLanded cost feeding your COGSIn short
Import accounting covers everything between your supplier's invoice and the real cost of a unit on your shelf: customs value, the commodity code that sets your duty rate, import VAT and how you account for it, and the freight and fees that a supplier price leaves out. eCounts calculates landed cost per shipment, handles import VAT through postponed VAT accounting where it fits, and allocates costs to each SKU so your margins are real.
Works with the platforms and software you already use
Amazon 
Shopify 
Etsy 
TikTok Shop 
Xero 
QuickBooks 
PayPal 
Stripe 
Klarna Trademarks belong to their owners. eCounts is independent and not endorsed by these platforms.
The import-cost problem
The supplier price is only the start. Freight, insurance, customs duty, clearance fees, port handling and haulage to your warehouse all belong in the cost of each unit, before a single platform fee is taken.
Import VAT is the one big number that usually does not belong in landed cost. For a VAT-registered business it is normally recoverable, so it is a cash flow question, not a cost. Treating it as a cost overstates COGS.
We calculate landed cost shipment by shipment and use it in your bookkeeping and SKU-level margins. To test a shipment yourself first, use our free UK import duty calculator.
Worked example
An illustrative shipment of 1,000 units at £8.00 each. The 4% duty rate is an example only: yours depends on commodity code and origin.
| Cost line | Amount | Notes |
|---|---|---|
| Goods value (1,000 units at £8.00) | £8,000.00 | Supplier invoice, FOB |
| Sea freight to UK port | £1,200.00 | Part of the customs value |
| Insurance in transit | £50.00 | Part of the customs value |
| Customs value | £9,250.00 | Goods, freight and insurance to the UK border |
| Customs duty at 4% (illustrative) | £370.00 | 4% of £9,250 |
| Clearance and broker fee | £150.00 | Charged by your customs agent |
| Port handling | £180.00 | Terminal charges |
| Haulage to warehouse | £300.00 | To your warehouse or 3PL |
| Total landed cost (excluding import VAT) | £10,250.00 | £10.25 per unit vs £8.00 supplier price |
| Import VAT at 20% | £2,050.00 | On £10,250: customs value, duty, clearance, port handling and haulage. Recoverable if VAT-registered |
Illustrative only, not a client shipment. Import VAT is excluded from landed cost because a VAT-registered business can normally recover it.
Our free import duty calculator estimates duty, import VAT and landed cost per unit from your goods value, freight and commodity code.
Classification
The commodity code decides your duty rate, whether any licence or extra measure applies, and whether a trade agreement can reduce what you pay. The first six digits are the international Harmonized System (HS) code used worldwide. The digits after that are set by the UK, and import declarations use the full 10-digit code because the last two digits can change the duty and measures that apply.
You can search codes in the UK Trade Tariff. The hard part is judgement, because many products could plausibly sit in more than one heading. A supplier's HS code is a starting point, not an answer: beyond six digits their country's code may not match the UK's.
Where the classification is genuinely uncertain, HMRC can issue an Advance Tariff Ruling, which is a legally binding decision on the code. HMRC says it replies to applications in 30 to 120 days, so it needs planning before a large order, not after. Our guide to calculating UK import duty walks through the steps.
Where the money usually is
Duty is charged on the customs value, not always the invoice. Transport, insurance, loading and handling to the UK border must be added, along with relevant royalties, selling commission and 'assists' such as moulds or artwork you supplied. UK delivery charges shown separately can be left out.
Where goods originate, not where they shipped from, decides whether a trade agreement rate applies. Claiming preference needs proof of origin, such as a statement on origin from the exporter or importer's knowledge, and for UK and EU trade the records must be kept for 4 years from import.
The incoterm decides who pays which costs and who acts as importer. Under EXW or FOB you control freight and the customs value. Under DDP the supplier clears the goods, which can leave you unable to recover the import VAT.
Import VAT
For a VAT-registered importer, how import VAT is handled is a cash flow decision. You do not need HMRC approval to use postponed VAT accounting.
Postponed VAT accounting (PVA)
Import VAT is declared and recovered on the same VAT return, in boxes 1 and 4No cash paid at the border for the VATFigures come from the monthly statement in the Customs Declaration ServiceStatements can only be accessed for 6 months, so must be downloadedPaying at the border (C79)
Paying at the border
Every import into Great Britain needs a customs declaration, usually made by a freight forwarder or customs agent. Using an agent does not hand over responsibility. If the agent acts as your direct representative, which is the common arrangement, you are solely liable for any customs debt arising from a wrong code or value.
Duty itself can be paid per consignment, through your agent's deferment account (usually for a fee), or through your own duty deferment account. A duty deferment account lets you make one payment a month by Direct Debit instead of paying each consignment. HMRC may require a guarantee or grant a waiver depending on your limit.
Our guide to postponed VAT accounting explains how PVA appears on your return, and our VAT returns service collects and reconciles the monthly statements every period.
Getting it into COGS
When one container holds several SKUs, the split method matters. This illustrative example divides the £1,880 of shared costs from the shipment above between two SKUs.
| SKU | Units and supplier cost | Allocated by value | Per unit by value | Allocated by volume | Per unit by volume |
|---|---|---|---|---|---|
| SKU A (small, low value) | 600 at £5.00 (£3,000) | £705.00 | £6.18 | £376.00 | £5.63 |
| SKU B (bulky, higher value) | 400 at £12.50 (£5,000) | £1,175.00 | £15.44 | £1,504.00 | £16.26 |
| Total | 1,000 units (£8,000) | £1,880.00 | £1,880.00 |
Illustrative only. By value uses each SKU's share of goods value (3/8 and 5/8). By volume assumes SKU A fills 2 of 10 cubic metres. Per unit figures exclude duty, which is calculated per line.
Example dashboards
Every shipment's customs value, duty and import VAT, checked against your postponed VAT statement, then carried through to profit per product.
SKU profitability
August 2026 · per unit, net of VAT
Yoga mat 6mm on Amazon FBA is now at 7.0% margin. Landed cost rose £1.11 a unit after the July shipment's freight increase. Same product on Shopify: 30.7%.
| Product | Channel | Units | Price | Landed cost | Fees & ads | Profit / unit | Margin |
|---|---|---|---|---|---|---|---|
| Yoga mat 6mmYM-6MM-PUR | Amazon FBA | 640 | £20.83 | £11.95 | £7.42 | £1.46 | 7.0% |
| Yoga mat 6mmYM-6MM-PUR | Shopify | 410 | £23.33 | £11.95 | £4.22 | £7.16 | 30.7% |
| Cork block, pairCB-CORK-2 | Shopify | 520 | £12.49 | £3.20 | £2.95 | £6.34 | 50.8% |
| Resistance bands, set of 5RB-SET-5 | Amazon FBA | 880 | £16.66 | £4.10 | £6.38 | £6.18 | 37.1% |
| Foam roller 45cmFR-45 | eBay | 300 | £20.83 | £7.80 | £6.10 | £6.93 | 33.3% |
| Meditation cushionMC-BUCK | Etsy | 190 | £29.16 | £9.40 | £5.20 | £14.56 | 49.9% |
| Water bottle 750mlWB-750 | TikTok Shop | 410 | £12.49 | £4.60 | £2.90 | £4.99 | 40.0% |
Margin bands: under 15% red, 15 to 30% amber, over 30% green.
VAT return & imports
Quarter June to August 2026 · Making Tax Digital
Box 1 · VAT due
£66,100
incl. £14,860 PVA
Box 4 · reclaimed
£24,590
incl. £14,860 PVA
Box 5 · to pay
£41,510
Box 6 · sales
£275,500
Box 7 · purchases
£118,400
| Shipment | Arrived | Customs value | Duty | Import VAT (PVA) | Checked |
|---|---|---|---|---|---|
| SHP-0612 | 12 Jun | £22,400 | £896 | £4,790 | PVA statement |
| SHP-0718 | 18 Jul | £24,800 | £992 | £5,300 | PVA statement |
| SHP-0822 | 22 Aug | £22,300 | £892 | £4,770 | PVA statement |
| Quarter total | £69,500 | £2,780 | £14,860 | ||
Postponed import VAT appears in Box 1 and Box 4, so for a fully taxable business it nets to nil. Duty is a cost and goes into landed cost.
Example figures for illustration. Your dashboards are built from your own reconciled data. See it with your numbers.
Top tips
The duty rate follows the commodity code. Check it on the UK Trade Tariff before you agree a price with your supplier.
A preferential duty rate under a trade agreement only applies if you hold valid proof of origin. Without it, the full rate is due.
Duty is worked out on the goods plus freight and insurance to the UK border, not on the supplier invoice alone.
If you are VAT-registered, postponed VAT accounting lets you account for import VAT on your VAT return rather than paying it at the border.
Spread shipment costs across the products in it so every SKU carries its real landed cost.
From the accountant
“Landed cost is where most eCommerce margins quietly go wrong. If freight and duty are not in your cost of goods, every margin figure you look at is too high.”
Coming up
Duty on low-value parcels is changing in both the UK and the EU. Here is what is coming and when.
Since 1 July 2026 the EU has charged a flat €3 customs duty per item on parcels worth up to €150. From July 2028 normal duty rates apply, so UK sellers shipping to EU consumers should expect landed costs to change again.
Source: European Commission, Temporary flat fee on low-value imports
Announced at Autumn Budget 2025: imports of £135 or less will no longer be duty-free, with new customs arrangements for these goods. Sellers who import small parcels should review their landed costs.
Source: GOV.UK, Reforming the customs treatment of low value imports
What we do
We review the commodity code, any preference claim and the customs value, then collect every shipment invoice.
Shared costs are split using the method that fits the shipment, usually value, units, weight or volume, and duty is applied line by line.
Landed cost per unit updates stock value and cost of goods sold, and PVA statements or C79s are matched to your VAT return.
Keep reading
Estimate duty, import VAT and landed cost per unit for a shipment.The checks to run before goods leave your supplier.The sales side of the margin, reconciled from every channel.Landed cost and FBA fees together, per ASIN.
