For decades, UK businesses looked primarily to Europe for trade. But since leaving the EU, the United Kingdom has turned its gaze toward global partners, seeking to forge independent trade relationships. The jewel in this post-Brexit crown is undoubtedly the UK-Australia Free Trade Agreement (FTA), and import duty from Australia to UK start to be very important knowledge to know for UK’s importers.

As a customs broker with over 20 years of experience clearing goods through UK ports—from Southampton to Felixstowe—I have seen the confusion, the paperwork errors, and the unnecessary costs businesses incur when they don’t understand the rules.

Since the agreement entered into force on 31 May 2023, the landscape for importing Australian goods has changed dramatically. It is overwhelmingly positive, but it is not automatic.

In this guide, I will walk you through everything a UK business needs to know about import duty, taxes, and compliance when bringing goods in from “Down Under.”

The Headline News: The Death of Tariffs

Let’s start with the good news. Under the UK-Australia FTA, tariffs (customs duties) have been eliminated on over 99% of Australian exports to the UK.

Before this agreement, if you imported Australian wine, swimwear, automotive parts, or machinery, you were likely paying the “UK Global Tariff” (UKGT). This could range from 2% to over 20% depending on the commodity.

Today, provided you follow the rules, the duty rate is likely 0%.

What does this mean for your bottom line?

It means your Landed Cost just dropped significantly. If you are importing £50,000 worth of Australian machinery that previously attracted a 4% duty, you have just saved £2,000 in pure margin.

Key sectors benefiting immediately include:

1. • Wine and Spirits: Tariffs eliminated on entry.
   • Fashion and Textiles: Swimwear, boots, and clothing are now duty-free.
   • Automotive: Car parts and vehicles.
   • Technology and Machinery: Electrical equipment and industrial tools.

However, as any seasoned broker will tell you, “duty-free” comes with an asterisk.

The Exception: Sensitive Goods and Transitional Quotas

While 99% of goods are liberalized, the remaining 1% represents “sensitive sectors”—primarily UK agriculture. The UK government negotiated protections to ensure British farmers weren’t immediately flooded with cheaper Australian produce.

If you are in the food and beverage industry, you must be aware of Tariff Rate Quotas (TRQs).

How TRQs Work

For specific goods, the UK allows a certain volume (quota) to enter duty-free each year. Once that volume is exceeded, a higher tariff applies. These quotas increase annually until duties are eventually eliminated completely.

1. • Beef: Tariffs will be fully eliminated after 15 years. Until then, there is a duty-free quota that expands every year.
   • Sheep Meat (Lamb): Similar to beef, this has a 15-year transitional period with expanding duty-free quotas.
   • Sugar: Tariffs eliminated over an 8-year period.
   • Dairy: Tariffs eliminated over a 5-year period.

Broker Tip: If you are importing beef or dairy, you must check the current quota balance on the HMRC website before shipping. If the quota for the year is full, you will be hit with the full, steep tariff rate.

The “Gotcha”: Rules of Origin (RoO)

This is the number one reason I see importers get hit with unexpected bills. Just because a shipment arrives from Australia does not mean it is legally “Australian.”

To claim the 0% duty preference under the FTA, the goods must meet the Rules of Origin.

Wholly Obtained vs. Substantial Transformation

1. • Wholly Obtained: Goods naturally grown, born, or mined in Australia. (e.g., A steak from an Australian cow, or iron ore mined in WA). This is easy to prove.
   • Substantial Transformation (Product Specific Rules): This applies to manufactured goods. If you import a vacuum cleaner from Australia, but the motor came from China and the plastic from Vietnam, is it Australian?

The FTA sets out specific rules (often based on a change in tariff heading or a percentage of value added) that determine if enough work was done in Australia to qualify it as “originating.”

The Consequence

If you cannot prove the origin, the goods are treated as “Rest of World” origin, and you will pay the standard UK Global Tariff, ignoring the FTA entirely.

Documentation: Proving It to HMRC

HMRC operates on a “trust but verify” basis. When my team submits a customs declaration on your behalf, we input a specific code claiming the preferential rate. However, you must possess the evidence to back that claim up before the declaration is made.

You have two options for proof:

1. Origin Declaration

The Australian exporter puts a statement on the commercial invoice or packing list. It usually follows a standard text set out in the FTA, stating that the goods are of Australian preferential origin.

1. • Crucial: The exporter must have their reference number (such as an ABN) included.

1. Importer’s Knowledge

This is a newer concept utilized in modern FTAs. You, the UK importer, can claim preference based on your own knowledge that the product qualifies.

1. • Warning: If HMRC audits you, they will ask you for the breakdown of the manufacturing process, bills of materials, and supplier declarations. If you don’t have a deep relationship with the manufacturer, do not use this method. Rely on the exporter’s declaration instead.

Don’t Forget the Tax: VAT and Excise

A common misconception among new traders is confusing “Duty” with “Tax.”
The FTA eliminates Duty. It does NOT eliminate VAT or Excise.

Import VAT (20%)

Regardless of the trade deal, standard Import VAT (usually 20%) applies to almost all goods entering the UK.

1. • Cash Flow Tip: Use Postponed VAT Accounting (PVA). Instead of paying the VAT in cash at the border to release the goods, you simply account for it on your next quarterly VAT return. It’s a purely paper exercise that keeps cash in your business. Ask your broker to tick the PVA box on the declaration.

Excise Duty

If you are importing the famous Australian Shiraz or craft gin, you must pay Excise Duty. This is based on alcohol volume (ABV) and volume of liquid, not the value of the goods. The FTA does not reduce this.

1. • Note: The UK recently reformed alcohol duty (August 2023), moving to a strength-based system. Ensure your broker calculates this correctly, as errors here lead to heavy fines.

Biosecurity and DEFRA: Beyond Customs

While Customs (HMRC) cares about money, DEFRA (Department for Environment, Food & Rural Affairs) cares about safety. Australia has a unique ecosystem, and the UK is protective of its own biosecurity.

If you import:

1. • Food products
   • Animal by-products (leather, wool)
   • Plants or wood packaging

You face an extra layer of bureaucracy. These goods often require:

1. Health Certificates:Issued by Australian authorities.
2. IPAFFS Notification:You must notify the UK authorities on the IPAFFS system before the goods arrive.
3. Port Health Inspection:The goods may need to enter via a specific Border Control Post (BCP) for physical inspection.

Broker Warning: If you ship Australian beef to a UK port that doesn’t have a BCP for meat, your container will be rejected and likely returned to Australia at your expense. Always plan your route.

A Step-by-Step Guide for UK Importers

If you are ready to start buying from Australia, follow this broker-approved checklist:

Step 1: Obtain an EORI Number

You cannot trade without one. Ensure you have a GB EORI number (starts with GB followed by 12 digits).

Step 2: Classify Your Goods (Commodity Codes)

You need the 10-digit UK Commodity Code. This code determines the duty rate, VAT rate, and any restrictions.

1. • Tip: Do not just use the code the Australian supplier gives you. The Australian HS code (8 digits) is global, but the last two digits can differ in the UK. Verify it in the UK Trade Tariff.

Step 3: Check the FTA Eligibility

Look up your commodity code in the UK tariff tool. Does it show “Australia – 0%”? Check the “Rules of Origin” tab for that specific code to see what is required to claim it.

Step 4: Agree on Incomers

Who is paying for shipping? Who is liable for the UK import declaration?

1. • Ex Works (EXW): You handle everything from the Australian factory door.
   • FOB (Free on Board): Supplier gets it to the ship; you handle the freight and UK customs. (Recommended for most businesses).
   • DDP (Delivered Duty Paid): The supplier handles everything. Caution: Many Australian suppliers struggle to do UK customs clearance correctly. It is often safer to control the import yourself.

Step 5: Instruct Your Broker

Provide your broker with:

1. • Commercial Invoice (with the Origin Declaration statement!).
   • Packing List.
   • Bill of Lading / Airway Bill.
   • Clear instructions to claim “Preference Code 300” (or the relevant code for the FTA).

Common Pitfalls to Avoid

In my years of practice, I see the same mistakes repeatedly. Avoid these to ensure smooth sailing:

1. The “Sent” vs. “Origin” Mistake
   Importing electronics from an Australian distributor? Be careful. If that distributor imported the goods from Japan and is simply re-selling them to you, they are Japanese origin, not Australian. The UK-Australia FTA does not apply. You will pay full duty.
2. Missing Statements
   If the invoice doesn’t have the specific Origin Declaration text, I cannot legally claim the 0% rate for you. Retroactively fixing this after customs clearance is difficult and expensive (involving a C285 reclaim form). Get the paperwork right before the ship sails.
3. Wood Packaging Material (ISPM 15)
   Australia uses a lot of wood pallets. Ensure all pallets are heat-treated and stamped with the ISPM 15 mark. If they aren’t, the UK Forestry Commission can order the packaging (and your goods sitting on it) to be destroyed or re-exported.

Conclusion: Import Duty From Australia to the UK – A Golden Opportunity

The UK-Australia Free Trade Agreement is a massive win for UK importers. It opens up a supply chain of high-quality goods, from premium food and wine to advanced mining equipment and consumer tech, all without the burden of customs duty.

However, “Free Trade” does not mean “Form-Free Trade.” The burden of compliance lies with you, the importer.

By understanding the Rules of Origin, managing your VAT via PVA, and ensuring your Australian partners provide the correct documentation, you can turn this trade deal into a significant competitive advantage for your business.

Do not leave your compliance to chance.

If you are planning your first shipment from Australia, or if you want to review your current supply chain to ensure you are maximizing the FTA benefits, consult a professional customs broker. We navigate the codes and quotas so you can focus on growing your business.

Disclaimer: This article provides general information and does not constitute legal or financial advice. Customs regulations are subject to change. Always consult a professional customs broker or tax advisor for your specific situation.