Shipping to the UK from Canada: Duty, VAT and the End of the 135 Pound Relief
Quick answer: Shipping from Canada to the UK, you generally pay UK import VAT at 20 percent on almost every consignment, but goods that are made in Canada and meet Canada-UK Trade Continuity Agreement rules of origin qualify for 0 percent preferential duty at any value. The separate 135 pound duty relief ends by October 2028.
The United Kingdom remains a top market for Canadian companies. While trade is strengthened by the Canada-UK Trade Continuity Agreement (TCA), there is a common misconception that "free trade" means "no fees."
In reality, while the agreement may eliminate duty on qualifying Canadian-made goods, it does not eliminate Value Added Tax (VAT) or other import fees. All commercial consignments to the UK are subject to scrutiny by His Majesty's Revenue and Customs (HMRC).
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Contact our team for a consultationDo I have to pay duty on items to the UK from Canada?
Generally, a consignment is assessed for both duty and VAT. Two factors decide whether duty is actually payable:
- Origin of goods: if your goods are made in Canada and meet the rules of origin, they likely qualify for duty-free entry under the Canada-UK TCA, regardless of value.
- Value and classification: for non-originating goods, duty depends on the HS code and the assessment value.
The 2028 reform: end of the £135 duty relief
The UK is removal of th duty free threshold is expected on or before October 2028. Import VAT is unaffected and continues to apply to consignments of all values.
Why are there still fees if my package is under £135 pounds?
Because VAT and duty are two different charges, and only one of them is tied to the £135 pound figure.
- VAT: UK import VAT applies to consignments of all values. For goods at or below 135 pounds sold online, the seller or online marketplace generally charges 20 percent VAT at the point of sale. For consignments over 135 pounds, import VAT is collected at the border.
Why do carriers charge an extra fee?
This is called a disbursement fee. When your package arrives, carriers (like FedEx, UPS or DHL) pay the duty and VAT to UK customs immediately to release your goods. They then invoice you (or the receiver) for that amount plus an administrative fee for fronting the money. This fee is commonly 2.5 percent of the total duties and taxes paid, with a minimum charge (usually between 12 to 17 pounds).
Get our lowest market spot rate to the UK for shipments over 10 kilograms.
Examples: calculating UK import fees
UK customs calculates fees on the assessment value (cost of goods plus shipping), the HS code (classification) and the country of origin. The duty rate below is illustrative.
Scenario A: standard import
A 2,000 pound shipment of goods made in China (shipped from Canada). No free-trade preference applies.
Scenario B: TCA Duty Free benefit for Canada Origin Goods
A £2,000 shipment of goods made in Canada. Qualifies for duty-free entry.
Total saving: £219.40
Send us the shipment details to request a quote to the UK:
- Pickup location (Canada postal code)
- Delivery location (UK postal code)
- Commodity, weight and dimensions
- Cargo ready date
- Preferred mode of transport (air or ocean)
Note that declared value is an important data point that is often overlooked. Read more about declaring a value for shipments to the UK.
The Canadian-origin advantage most guides miss
Information gain: removing the 135 pound duty relief changes very little for genuinely Canadian-made goods. Under the Canada-UK TCA, qualifying Canadian-origin goods already clear at 0 percent preferential duty at any value, so the 2028 change adds no duty to a compliant Canadian-origin consignment. The real exposure sits with non-originating low value goods, for example third-country stock consolidated in Canada, that cannot claim TCA preference.
How to benefit from the Canada-UK Trade Continuity Agreement
To get the saving shown in Scenario B, your goods must meet the rules of origin. Simply shipping from Canada is not enough; the goods must be manufactured or substantially transformed in Canada.
You must include a statement of origin on your commercial invoice. Download a sample declaration form here.
Frequently asked questions
Do I have to pay duty shipping from Canada to the UK?
All consignments to the UK - even if shipping from Canada - are subject to import duty and VAT. Goods that are made in Canada and meet the Canada-UK Trade Continuity Agreement rules of origin can enter at 0 percent preferential duty. VAT still applies.
Is the £135 duty free threshold going away?
The UK announced its removal by October 2028 at the latest. Import VAT is unchanged.
Does the £135 threshold removal change affect VAT?
No. Import VAT still applies to consignments of all values.
Why does the carrier add a fee?
Carriers charge a fee to cover the cost of advancing duty and VAT charges to HMRC. The invoice a disbursement fee, commonly is 2.5 percent of the duty and tax advanced with a minimum charge of around £15.
Will Canadian-made goods pay the new low value duty?
No. Goods that qualify as Canadian origin via the Trade Continuity Agreement remain duty free. But they must be accompanied by a certification of origin.
Checklist: common import fees
- Customs duty: based on HS code.
- VAT: 20 percent consumption tax.
- Excise duty: for alcohol, tobacco, fuel.
- Disbursement fee: charged by the carrier.
- Inspection fees: for food or plant products.
- Brokerage fee: if using a third-party broker.
Read more about customs duty calculation or understanding VAT vs duty.
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Disclaimer: this post and all Jet Worldwide online content is for general information only. Always confirm compliance with the importer prior to shipping.
