Landed cost is the total cost of an imported product once it has been delivered to the buyer's premises in the destination country. It includes the goods value, international freight, marine cargo insurance, customs duty, import VAT, port handling, customs entry fees, and final UK delivery. It is what the goods actually cost you, not just what the supplier charges.

How is UK landed cost calculated?

Step 1: Calculate the customs value (goods value plus freight and insurance to UK port). Step 2: Apply the duty rate to get customs duty. Step 3: Add freight, duty, and any UK port handling to the VAT base, then apply 20% UK VAT. Step 4: Add UK destination charges (customs entry, devanning, delivery to door). The total is your landed cost.

Does landed cost include VAT?

Yes, import VAT is part of the landed cost — but for VAT-registered UK businesses using Postponed VAT Accounting (PVA), the VAT is recoverable on the same VAT return, so it represents zero net cost. Non-VAT-registered importers cannot reclaim VAT, making it a real cost component.

Why is calculating landed cost important?

Landed cost is the true cost of goods sold for imported products. Underestimating it leads to selling at a loss, undercutting your margins. It is essential for product pricing, supplier comparison, profit analysis, and understanding the true cost-effectiveness of overseas sourcing versus UK suppliers.

UK Landed Cost Calculator — Goods + Freight + Duty + VAT

💷 UK Landed Cost Calculator

Goods value (£) — FOB/EXW

International freight (£)

Marine/cargo insurance (£)

UK customs duty rate (%)

UK destination charges (£)

UK customs entry + broker fees (£)

Inland delivery in UK (£)

UK VAT rate (%)

I am UK VAT-registered and use Postponed VAT Accounting (PVA) — import VAT is recoverable, treat as zero cash cost

Enter your shipment details and click Calculate to see the full UK landed cost breakdown.

What is "landed cost"?

Landed cost is the total cost of an imported product once it has been delivered to your premises in the UK. It includes everything: the goods value, international freight, marine insurance, customs duty, import VAT, port handling, customs broker fees, and final delivery. It is what the goods actually cost you — not just what the supplier's invoice shows.

If you sell imported products and you price using only the supplier invoice value, you're guaranteed to make less margin than you think. Landed cost is the true cost of goods sold; everything below it is loss.

The UK landed cost formula

For a UK import, landed cost has six components:

1. Goods value — your supplier's invoice (FOB or EXW value)
2. International freight + insurance — to UK port or airport
3. UK customs duty — duty rate × customs value (goods + freight + insurance to UK port)
4. UK destination port charges — THC, documentation, devanning, port handling
5. UK customs entry & broker fees — typically £45–£100 per entry
6. UK import VAT — 20% × (customs value + duty + UK port charges). Net zero cost if you're VAT-registered using PVA
7. UK inland delivery — port to your warehouse

Some of these are obvious, some are easy to miss. The full sum is your landed cost.

The VAT subtlety: Import VAT (typically 20%) is technically part of the landed cost calculation, but for UK VAT-registered businesses using Postponed VAT Accounting (PVA), it is recoverable on the same VAT return — making it a net zero cost. Non-VAT-registered importers (rare for businesses) cannot reclaim it, so VAT becomes a real cost. The calculator above lets you toggle this.

Why most importers underestimate landed cost

Hidden destination charges. Under CIF Incoterms, "destination charges" often appear on arrival — THC £280, devanning £55, port pass £15, documentation £45. £400+ of charges you didn't quote
Anti-dumping duty. On certain goods from certain countries (bicycles, ceramic tableware, fasteners, steel from China), anti-dumping duty applies on top of standard rates. Easily 30%+, often missed
UK customs entry fees. Even simple entries are £45–£100. Add complications (deferment, PVA setup) and it adds up
Demurrage and detention. Not usually planned for, but when they happen they're significant. See our demurrage guide
Currency conversion losses. Many invoices are USD; conversion timing and fees affect the final GBP cost
Bank fees on payment. SWIFT charges, intermediary bank fees — typically £20–£40 per international payment

Worked example — 40ft container from Shanghai

You import a 40ft container of consumer electronics from Shanghai:

Component	Amount
Goods value (FOB Shanghai)	£32,000
Ocean freight Shanghai → Felixstowe	£1,400
Marine insurance (0.15% of CIF)	£55
Customs value	£33,455
UK customs duty (assume 2.7%)	£903
UK destination port charges	£295
UK customs broker fee	£75
UK delivery Felixstowe → Birmingham	£450
UK import VAT (20% × VAT base £34,728)	£6,946 (zero with PVA)
Landed cost (PVA-registered)	£35,178
Landed cost (no PVA)	£42,124

If the supplier invoice was £32,000 and you were pricing your products as a 30% markup over that — you'd actually be selling at ~3% margin or a loss once landed cost is factored in. This is exactly why landed cost matters.

Components in detail

Customs value (the duty/VAT base)

The "customs value" is the figure HMRC uses to calculate duty and (with adjustments) VAT. The standard method is the transaction value: what you paid for the goods, typically grossed up to include freight and insurance to the UK port. Under most Incoterms this works out to the CIF Felixstowe (or equivalent) value.

UK duty rate

Set by the UK Trade Tariff at trade-tariff.service.gov.uk. Determined by your goods' commodity code. Range from 0% (smartphones, laptops) to 17% (footwear) plus anti-dumping duty on specific products from specific countries. See our UK import duty guide for details.

UK destination charges

The unavoidable port-side costs: terminal handling (THC), documentation, port pass, sometimes ISPS, sometimes container detention. Typically £250–£500 for an FCL container, less for airfreight.

Import VAT (and PVA)

20% on the VAT base (customs value + duty + UK port handling). For VAT-registered UK businesses, use Postponed VAT Accounting (PVA) to avoid paying at the border. See our PVA guide.

Using landed cost in your pricing

Once you have landed cost per unit, the right pricing formula depends on your business model:

B2C retail: Selling price = landed cost × (1 + markup multiplier). For consumer goods, typical retail multipliers are 2.0–3.5× landed cost
B2B wholesale: Selling price = landed cost × 1.5–2.0× depending on volume and category
Marketplace (Amazon, eBay): Be aware that platform fees (15%+), payment processing (3%), and returns add another 20–25% off your gross — work back from your selling price to ensure landed cost leaves enough margin

The first-import trap: First-time importers commonly use the supplier invoice as their "cost of goods" and price from there. After the first shipment lands and they see the real landed cost, they discover they've been pricing 20–35% too low for months. Always calculate landed cost before setting selling prices.

Practical shipment example: A low unit cost can still become unprofitable once origin charges, freight, insurance, duty, VAT cash flow, port charges and final delivery are included. Use landed cost before placing the purchase order, not after the container is already on the water.

Related calculators & guides

UK Import VAT calculator — VAT focus only
UK Import Duty guide — find your duty rate
Postponed VAT Accounting — eliminate VAT cash flow drag
CBM Calculator — sea freight volume
FOB vs CIF — Incoterm cost comparison