Buying furniture from overseas suppliers: import VAT, duty and currency for UK studios

The Italian sofa is approved, the Belgian linen is chosen and the Danish lighting is on the schedule. Since Brexit, each of those orders goes through customs just like one from Chicago or Shanghai. You need a customs declaration, import VAT and possibly duty. The supplier invoice is also in a currency that can move between the day you quote the client and the day you pay.

None of this is difficult once you have a routine. It goes wrong when a studio treats each import as a one-off, when the courier’s duty bill lands on the client’s doorstep, or when the euro moves a few per cent between the deposit and the balance and the margin goes with it. This guide follows an overseas order in the order you will deal with it. It links to the HMRC and gov.uk guidance throughout and stops where you need an accountant or a customs agent.

Not tax advice. This is a practical overview for Great Britain (England, Scotland and Wales) as of October 2026. Different rules apply in Northern Ireland. Rates and procedures change, so check the gov.uk pages linked here and speak to your accountant before you change how you trade.

1. Before you quote: find the commodity code

Every imported item has a commodity code, and the code sets the duty and VAT rates that apply. Finding it is one of the early steps in HMRC’s step-by-step guide to importing, alongside checking whether your goods need a licence or certificate. It should come early for you too, because without the code your landed-cost estimate is a guess.

Look items up in the UK Trade Tariff. Before you start, it asks you to know the type of product, what it is used for, what it is made of, how it is produced and how it is packaged. Most of that is on a good spec sheet, so it helps to add a material and construction line to your FF&E schedule for anything coming from abroad.

We are deliberately not quoting duty rates in this post. They depend on the exact code and the country of origin, and they change. Look them up for each item, write the code and rate against the line, and record the date you checked.

2. Check origin, not just where it ships from

The UK’s trade agreements, including the one with the EU, allow reduced or zero duty on goods that meet their rules of origin. The detail matters here. HMRC’s rules of origin guidance says origin is where goods were grown, produced or manufactured. It is not where they were shipped or bought from.

A sofa made in Italy and shipped from Milan may well qualify. A rug sold by a Dutch showroom but woven elsewhere may not. A table built in the EU from materials sourced outside it qualifies only if the work done there meets the agreement’s processing rules. Treat preference as something to check, not something to assume.

• Ask the supplier, in writing, where the item is made and whether they will put an origin statement on the commercial invoice.
• Keep that statement with the PO. HMRC’s proof of origin guidance lists the accepted forms. These include an origin declaration on the invoice or another commercial document and, under some agreements, the importer’s own knowledge. If you rely on your own knowledge, you need supporting records such as the commodity code and how the goods were produced. HMRC can ask to see proof of origin for up to two years after import.
• If origin cannot be shown, the goods can still come in, but you cannot claim the preferential rate, so duty is charged at the rate that would otherwise apply. Price your quote on that basis until you have the statement.

3. Get an EORI number

You may need an EORI number to move goods between Great Britain and any other country, the EU included. If your studio is the importer, use your studio’s EORI. You only apply once. Keep the number on your supplier set-up sheet so it goes on every overseas PO and every instruction to your carrier.

Few studios lodge declarations themselves. HMRC’s import guide notes that most businesses that import goods use a transporter or customs agent. That makes sense for a design studio. Agree in advance which of you is the importer and whose EORI and VAT number go on the declaration.

4. Import VAT and postponed VAT accounting

Import VAT is normally charged at the same rate as if the goods had been supplied in the UK, so standard-rated furniture attracts 20%. It is charged on more than the invoice price. HMRC’s guide to valuing goods for import VAT says to add together:

1. the customs value of the goods,
2. all charges payable on import, such as customs duty (but not the VAT itself), and
3. the cost of any incidental expenses, which HMRC explains on a linked page. Onward transport costs known at the time of import also have to be included.

So duty is itself subject to VAT, and your landed-cost estimate should add them in that order.

If your studio is VAT-registered, the cash-flow answer is usually postponed VAT accounting (PVA). With PVA you declare and recover import VAT on the same VAT Return, instead of paying it when the goods arrive and recovering it later. HMRC’s PVA guidance sets out the practical points:

• You do not need approval to use it.
• Your VAT registration number goes at header level in Data Element 3/40 of the import declaration, so your agent needs it before the goods arrive.
• You cannot change how you account for import VAT once the declaration is submitted. Tell your carrier you use PVA on every shipment, not just the first.
• Your monthly postponed import VAT statements are in the Customs Declaration Service (CDS) financial dashboard. Download them each month, because they are your evidence for the return.
• Different rules apply to consignments worth £135 or less.

If you do not use PVA, you pay import VAT when the goods are imported and reclaim it as input tax, with the import VAT statement as evidence. If you import often, you can set up a duty deferment account with HMRC, which needs a bank guarantee. HMRC also notes that a shipping or forwarding agent cannot usually reclaim this VAT. That is one more reason to be clear about who the importer is. If your studio is not VAT-registered, you still pay import VAT but cannot reclaim it.

How you then charge the client, as principal with VAT on the full price or as a disbursement, is a separate question. Our guide to VAT for interior designers covers it. Agree the treatment with your accountant before you quote.

5. Agree the Incoterm on the purchase order

Most surprise bills come from an unclear delivery term. Incoterms are standard rules that set out who arranges, pays for and carries the risk at each stage. HMRC’s customs valuation guidance on Incoterms describes the two you will meet most often from European suppliers:

Neither is right in every case. DDP is simpler, but you pay for the convenience and lose sight of the duty element. DAP keeps costs visible and lets you be the importer and use PVA, but you or your agent must be ready to clear the goods. Whichever you choose, put the Incoterm and the named place on the PO (for example “DAP, client address, London”) and check that the supplier’s acknowledgement repeats it. Our purchase order template has a field for this.

One practical rule: never let a DAP delivery from overseas go straight to a client’s home unless you have arranged clearance and told the carrier who pays. A courier asking the client for import charges at the door can undo months of goodwill.

6. Paying in euros or dollars

Customs is a cost you can work out in advance. Currency is the one that moves. A typical European order has a deposit when you order and a balance before dispatch, often weeks or months apart. In that time the pound can move against the euro either way.

A few habits keep this manageable:

• Keep the PO in the supplier’s currency. If the supplier invoices in euros, raise the PO in euros. Converting the PO to pounds hides the exposure you are trying to manage.
• Know your payment route. Compare what your bank and any payment provider charge. That means the margin built into their exchange rate as well as the visible fee. Decide this once for the studio, not invoice by invoice.
• Set a currency buffer. When you convert a supplier price into a client quote, add a stated percentage for exchange movement and bank charges. Choose the figure with your accountant based on your payment terms. The point is that it is written down and applied every time.
• Consider paying early for big items. If your contract lets you take the client’s money at approval, paying the supplier in full at the same time removes the currency risk on that line. It is a cash-flow decision, so make it deliberately.
• Talk to your bank about forward contracts if you have large or regular euro commitments. Whether they suit you is a question for your bank or adviser, not a blog post.

7. Quoting the client in pounds

UK clients expect a sterling price, and they should get one. Build up a landed-cost line for each imported item in this order and you have a number you can defend:

Two points save arguments later. First, say in your terms how long a quote for imported goods holds before you may re-price for currency. Second, when you invoice, fix the exchange rate on that invoice and do not recalculate it afterwards. The client then pays a known sterling figure, and your books show what the line actually cost. In Techstyles, each project has its own currency, POs stay in the supplier’s currency, and an invoice converts at the day’s rate, which is then frozen on the invoice. When those documents go to Xero, each arrives in its own currency.

8. Add transit time to the order-by date

Customs adds a stage to the timeline, and it is easy to forget when you work out when to order. If a supplier quotes ten weeks ex-works, the goods will not be at your client’s door in ten weeks. Add road or sea freight, clearance, and delivery to site or to your receiving warehouse, then work back from the install date. Use the carrier’s stated transit times, not hopeful ones. Our guide to calculating order-by dates takes you through it. Techstyles scores every FF&E line against its install date as blocked, at risk, watching or OK, with an order-by date counted back using the supplier lead time.

A one-page routine for every overseas order

1. Commodity code and duty rate looked up and recorded, with the date.
2. Country of origin confirmed in writing; origin statement requested for the invoice.
3. Studio EORI and VAT number on the PO; carrier told you use PVA.
4. Incoterm and named place on the PO and repeated on the acknowledgement.
5. PO raised in the supplier’s currency; payment route chosen.
6. Landed cost built up in GBP with a stated currency buffer.
7. Transit and clearance time added before you set the order-by date.
8. CDS postponed import VAT statement downloaded each month and passed to whoever does your VAT Return.

Pin that list next to your procurement tracker and overseas orders become as predictable as UK ones. If you would rather not keep it in a spreadsheet, you can see how Techstyles handles procurement and multi-currency finance.