This week we launched our first product, the Duty Calculator. With the Duty Calculator you can calculate your import tax in a few simple steps for free.
The calculation of import tax can be complicated; that’s why we built the calculator for you. The amount of duty and VAT payable is determined by:
- the type of product that you are importing,
- the value of the product and
- the cost of shipping and insurance.
Let’s start with the first one: the type of product. For Customs purposes goods are identified by a ten digit code known as a commodity code, or tariff heading. Each code has an associated duty rate – usually expressed as a percentage – which is applied when calculating the amount of duty payable.
There are in excess of 10,000 commodity codes and the associated duty rates can vary significantly – even between products that may seem similar to the consumer. For example, a shoe with a textile upper can be subject to a duty rate as high as 17%, whereas a leather upper shoe may only attract duty at 5%. Similarly bags and cases are subject to rates of duty ranging from 2.7% to 9.7%, depending on the material they are made from. Some products do not attract duty, for example wooden furniture, certain cosmetic products and most IT equipment and accessories. Using our duty calculator you can establish the tax you will pay by selecting the category and subcategory of the item that you want to import.
Next we have the value of the product. This is straightforward: the more expensive your product is, the more you need to pay. However, there are several minimum thresholds that determine if you need to pay duty or tax at all, so you may be lucky! Taxes are always calculated in the national currency of the country of import, and Custom agencies set exchange rates on a monthly basis, or more frequently in the event of significant currency fluctuations. It should be noted that the rates used by Customs agencies may differ from exchange rates published elsewhere. You can find the rates also published on the Duty Calculator website.
Finally there is the cost of shipping and insurance. Again these costs will influence the amount of duty and tax payable; the higher the costs, the greater the amount of duty and tax payable. Some freight companies include a duty and VAT estimate in their shipping quotes, but based on our research none of them have quite cracked it yet, and their estimates will often be inaccurate.
Currently the Duty Calculator can be used for goods imported from anywhere in the world into the UK, Germany, Italy, France, Spain, Netherlands, Belgium and Ireland. We are working hard to add new countries and aim to have all EU countries included before the summer. Adding new countries takes time, because we are keen to ensure that the calculator is 100% accurate, so please be patient if your country is not yet included.
We are very happy with the product and I would like to thank Kevin and Sean at Hexagon, Aleksandr, Alex, Aleksandr and Anton at iTransition, Pesh and Riley at Effect Digital and Peter at Fiscal Solutions for their great work. Also I would like to thank our active Bundleers for their useful feedback on the alpha and beta versions.
Keep on Bundling