Customs Value Calculator: The Short Answer
A buyer has a quote for 1,000 garments at £10,000 on FOB terms and assumes duty will be charged on £10,000. It will not. Duty is charged on the customs value, which for an ordinary commercial import is the price paid plus the cost of delivering the goods to the UK border. Add £800 freight and £50 insurance to the FOB price and the customs value is £10,850. The customs value calculator on this page does that sum for your Incoterm, so you do not understate the value that duty and import VAT are based on.
Understating the customs value is not a saving. It risks an inaccurate declaration, and the difference is usually caught later. The honest approach is to build the value correctly at the quoting stage, which also gives you a landed cost you can trust.
Use the Customs Value Calculator
Choose the Incoterm on your quote first, because it decides which costs are already inside the price and which you must add. Enter the invoice price, then the inland transport, freight and insurance you will pay to bring the goods to the UK border. The customs value calculator only counts the costs that your chosen Incoterm leaves out, and shows each component in a table that mirrors a customs worksheet.
Customs value calculator
Customs value by Incoterm
A simplified estimate for ordinary commercial imports. Special cases such as royalties, assists, related-party sales or goods returned for repair follow separate rules, so ask a customs agent.
If you are quoted a delivered price, choose DAP and enter any UK-side costs that your supplier shows separately on the invoice, because costs after the border can be left out of the value when they are identified. Use the pieces box to turn the total into a customs value per piece, which is the number to carry into your import tax and landed cost calculations.
What Counts Toward Customs Value
For most commercial garment imports, customs value starts from the price actually paid or payable for the goods. To that, you add the delivery costs up to the place where the goods enter the UK. GOV.UK sets out that you only need to include costs up to the place of introduction, which is the UK port for sea freight and the point where the aircraft first crosses the border for air freight. Transport, insurance, loading and handling that relate to that journey are included, wherever in the world they were incurred.
Typical items and how they are treated
| Cost item | Added to the customs value? | Notes |
|---|---|---|
| Price paid for the garments | Starting point | Transaction value on the invoice |
| Inland transport to the port of loading | Yes, if not in the price | Delivery cost in the exporting country |
| Loading and handling at the origin | Yes, if not in the price | Treated as delivery costs |
| International freight to the UK | Yes, if not in the price | Up to the place of introduction |
| Insurance to the UK border | Yes, if not in the price | Including blanket cover apportioned to the goods |
| UK transport after the border | No, if shown separately | Beyond the place of introduction |
| Duty and import VAT | No | Charged on the value, not part of it |
A summary for orientation. See the GOV.UK guidance linked below for the full rules and exceptions.
The official explanation is in the GOV.UK guidance on delivery costs to include in the customs value, and the wider set of guides is collected under GOV.UK guidance on working out the customs value of imported goods. If your goods are not an ordinary sale, such as samples, returns or related-party transactions, the rules differ and you should ask a customs agent.
How Your Incoterm Changes the Calculation
An Incoterm describes who pays for what up to a named point, so it changes how much of the delivery cost is already in your invoice. The final customs value should be the same whichever term the supplier uses, provided the costs are the same, because the value reflects the cost of getting the goods to the UK border. Only the arithmetic differs. The table shows the same shipment quoted four ways.
The same shipment on four Incoterms
| Incoterm | Invoice price | Costs you add | Customs value |
|---|---|---|---|
| EXW | £10,000 | £1,050 (inland and loading £200, freight £800, insurance £50) | £11,050 |
| FOB | £10,200 | £850 (freight £800, insurance £50) | £11,050 |
| CFR | £11,000 | £50 (insurance) | £11,050 |
| CIF | £11,050 | Nothing | £11,050 |
Illustrative. The same £10,000 of goods, £200 inland and loading, £800 freight and £50 insurance are shown under four terms. The ICC publishes the official definitions of each Incoterm.
This is why comparing quotes on different terms by their headline price is misleading. A CIF price looks higher than an FOB price for the same goods because it already holds freight and insurance. Our guide to Incoterms for jeans orders explains the terms in more depth, and the explanation of an FOB price shows what FOB leaves for you to add. The ICC Incoterms rules page lists the official rules.
Where the Customs Value Comes From
The pie divides the customs value of the FOB example into the invoice, freight and insurance. For most garment shipments the goods dominate, but freight is large enough to matter, and when freight rates move, so does the value that duty and VAT are charged on.
Illustrative make-up of the example customs value
- Invoice price of the goods92.2%
- International freight7.4%
- Insurance0.5%
Illustrative. £10,000 invoice, £800 freight and £50 insurance make a £10,850 customs value; shares are rounded to one decimal place.
Because freight raises the value, a lower freight rate saves you duty and VAT as well as the freight itself. When you compare shipping options, run each through the import tax calculator for the UK to see the knock-on effect.
Customs Value Examples: Sea Freight and Air Freight
Freight mode changes the customs value because the delivery cost is part of it. Two buyers can place the same order at the same FOB price and end up with different customs values, and therefore different duty and VAT, purely because one ships by sea and the other by air. The table runs the same £10,000 of garments through both options, using illustrative freight costs.
The same FOB order shipped by sea and by air
| Line | Sea freight | Air freight |
|---|---|---|
| Invoice price of the goods (FOB) | £10,000 | £10,000 |
| International freight | £800 | £2,400 |
| Insurance | £50 | £50 |
| Customs value | £10,850 | £12,450 |
| Duty at a placeholder 10% | £1,085 | £1,245 |
| Uplift on the invoice price | 8.5% | 24.5% |
Illustrative freight costs and a placeholder duty rate; they are not quotes or tariff rates. Customs value = goods + freight + insurance.
Air freight raises the customs value by £1,600 here, and duty rises by £160 on top of the freight itself. That is the kind of knock-on effect a customs value calculator makes visible before you choose how to ship. If you are weighing a faster route to catch a selling window, include the extra duty and VAT as well as the freight in the comparison. Our guide to sea freight versus air freight for clothing covers the wider trade-offs, such as time, reliability and carbon.
Four Steps to a Reliable Customs Value
A short routine keeps the value consistent from one shipment to the next and makes it easy to explain to your agent or to HMRC.
Building the customs value
- 1Take the invoice priceThe price paid or payable for the garments.
- 2Check the IncotermWork out which delivery costs are already inside it.
- 3Add what is missingAdd freight, insurance and loading up to the UK border.
- 4Keep the evidenceFile invoices and quotes so the value can be supported.
Evidence matters, and a good customs value calculator habit is to save the inputs with each shipment so the figure can be rebuilt later. Keep the supplier invoice, the freight invoice and the insurance document together, and make sure the values you declare match them. If something looks inconsistent, the paperwork is what resolves it. Buyers who keep these files tidy find that repeat shipments take minutes to value, because only the quantities and the freight change from one order to the next.
Customs Value Mistakes That Cost Money
Most errors come from using the wrong base or from leaving out costs, and they are usually found at the worst moment, when goods are held at the border or when a later check looks back at an old declaration.
Practices to keep and to avoid
Good practice
- Build the value from the invoice and delivery costs to the border
- State the Incoterm on every quote and invoice
- Keep freight and insurance documents with the invoice
- Ask your agent to review the first few declarations
Common slips
- Declaring only the factory price when delivery is extra
- Mixing quotes on different Incoterms without adjusting
- Including UK-side costs in the value without a reason
- Guessing at special cases such as royalties or assists
General guidance, not customs advice. A customs agent or HMRC can confirm your position.
Using a customs value calculator for clothing imports at the quoting stage, not at the border, turns these from surprises into line items. Our landed cost calculator for clothing then adds duty, VAT and handling to give a cost per piece.
How Ruhrose Helps You Plan the Value
Ruhrose develops hoodies, fleece, jersey, denim and woven casualwear for UK buyers, with production in Bangladesh. We state what our quotes include and which delivery costs you still need to add, so the customs value you work out matches your paperwork. See our guide to importing clothing from Bangladesh to the UK for the wider process, and Ruhrose's clothing manufacturing pages for what we make.
Before you accept a quote, ask yourself one question: which delivery costs are still missing from the price, and who will pay them?