The amount of VAT and duty paid is based on the full cost of to bringing these goods into the UK.
Inco terms are used to define who pays which costs For example:
- DDP invoice price includes all the costs of making the goods including duty & cost of transporting them from the supplier/factory to the customer.
- EXW invoice price means that the importer must add all the costs of getting the goods to the destination port to calculate the dutiable value. This dutiable value plus duty plus the costs of getting the goods through the port to the customer warehouse are VATable.