How to value your goods for import or export
Contents
- What is customs valuation?
- Is customs valuation determined in the same way worldwide?
- How is customs value determined?
- Who is responsible for determining the customs value of products?
- Valuation methods
What is customs valuation?
All goods traded internationally have a customs value. This is declared to customs authorities together with other customs and product information.
At import, that value is the basis on which customs duty, import VAT and other import-related taxes are calculated. If the customs value for your goods is declared incorrectly at import and it results in an underpayment of duty and import VAT, you will be liable topay the difference. HMRC may apply penalties to a mis-declaration of the customs value.
At export, customs value is mainly used for trade statistics.
Is customs valuation determined in the same way worldwide?
Customs valuation follows international rules based on the World Trade Organisation's Agreement on the Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 also known as the Customs Valuation Agreement (opens in new window).
Further guidance on the interpretation of the agreement (opens in new window) has been provided by the World Customs Organisation. This allows for consistency and harmonisation in international trade.
How is customs value determined?
The main method for determining the customs value is the transaction value defined as the price paid or payable, for the goods, when sold for export to the UK. This is known as Method 1 in the UK.
You will need to add certain additional costs and will be allowed to deduct others, if they are not already accounted for in the transaction value. For example, the cost of transport up to the first point of arrival in the UK needs to be added but the cost of transport beyond that point can be excluded. Royalties, license fees and some types of commissions will also need to be added. Additional rules apply to related companies to ensure that the relationship between entities does not affect valuation and as a result, the amount of duty and import VAT due.
In cases where there is no sale or no suitable transaction value to determine the customs value under Method 1 rules, alternative valuation methods must be used. There are five other valuation methods that need to be applied in the order and manner set out in the Customs Valuation Agreement.
Learn more about the different valuation methods as well as the costs that need to be added or subtracted from the value.
Who is responsible for determining the customs value of products?
Importers and exporters are responsible for determining the correct value. However, in the case of transport costs or insurance, for example, the final costs may not be available upfront. It may be necessary to liaise with the freight forwarder to confirm the final value of all amounts that need to be added or subtracted from the transaction value.
The importer and exporter remain liable for the correctness of the customs value declared to HMRC. This is the case even when the company uses an intermediary to declare goods to customs on their behalf. The company would also be liable for any underpayment of duty or other taxes resulting from incorrect value declared.
Valuation methods
Check detailed information on the different valuation methods to work out the customs value of your imports.
- Valuing imported goods using Method 1 (transaction value)
- Valuing imported goods using Method 2 (transaction value of identical goods)
- Valuing imported goods using Method 3 (transaction value of similar goods)
- Adjusting for level and quantity when using Methods 2 or 3
- Valuing imported goods using Method 4 (deductive method)
- Valuing imported fruit and vegetables using simplified procedure values with Method 4
- Valuing imported goods using Method 5 (computed value)
- Valuing imported goods using Method 6 (fall-back method)