Written by ITM Specialist Douglas Mackay
Many importers continue to calculate duty using only the supplier’s invoice price. However, as ITM Specialist Douglas Mackay explains, customs valuation under UK rules is far more nuanced – and getting it wrong can quietly erode margins or expose businesses to HMRC scrutiny.
Under the UK’s implementation of the WTO Valuation Agreement, the transaction value must include specific additions such as freight, assists, royalties, and licence fees where applicable. At the same time, businesses often overpay duty by incorrectly including non-dutiable elements like UK inland transport, post-import services, buying commissions, or certain domestic R&D costs.
Douglas has written an in-depth article highlighting several practical strategies to manage duty exposure more effectively. These include correctly allocating tooling and assist costs over production volumes, carefully structuring royalty arrangements, and aligning customs valuation with transfer pricing policies in related-party trade. With HMRC scrutiny increasing – particularly around royalties, post-import transfer pricing adjustments, and fallback valuation methods; having a transparent, well-documented approach is critical.
Strong valuation governance, clear broker instructions, and consistent documentation not only reduce compliance risk but can also unlock meaningful landed cost savings.
A proactive customs valuation strategy is no longer optional – it is a competitive advantage.
To download the full article please complete the form below. If you would like to speak to Douglas or any of our international trade specialists you can contact us by phone on 0333 7722565 or by e-mail: info@internationaltradematters.com.
