DDP Shipping Explained: How to Ship Into the UK Duty-Paid
DDP shipping means the seller covers duty and import VAT so nothing lands on your customer: for an overseas brand shipping into the UK, choosing DDP is the easy part, and setting it up so it doesn't bleed money is the hard part.
Verified 24 September 2026. Duty, import VAT and the £135 threshold change. Always check current HMRC guidance before you ship.
The Short Answer
Delivered duty paid (DDP) means the seller pays the duty, import VAT and customs clearance, so the parcel arrives with nothing for the customer to pay. That is what DDP shipping is: you take the customs bill, they take the parcel.
The customer does not get a courier bill, a payment link, or a surprise at the door.
Choosing DDP is easy. This guide is about setting it up so it doesn't cost you customers or margin: who actually pays what, the brokerage fee that never appears in the sales deck, the declared-value mistakes that quietly overpay HMRC, and how to collect the tax from your customer before you have to pay it out. For an overseas brand, the definition was never the problem. The money and the angry tickets are all in the setup.
DDP vs DDU: what you're actually choosing
DDP is an Incoterm, one of the standard labels that say who pays for what on an international shipment. The choice that actually changes your UK operation is DDP versus DDU.
DDU (delivered duty unpaid) is the opposite of DDP. The consumer pays the duty, the taxes, and the carrier's customs clearance / brokerage fee. That fee is the bit people miss.
You will also hear DDU called DAP (delivered at place). Same idea for the customer: the parcel arrives unpaid.
DDP (delivered duty paid) | DDU (delivered duty unpaid) | |
|---|---|---|
Who pays duty and import VAT | You, the seller | The customer |
Who clears customs | You, via the carrier | The customer, via the carrier |
Who pays the carrier's brokerage / clearance fee | You | The customer |
What the customer sees | The parcel arrives. Nothing extra to pay. | A carrier email or text with a payment link |
If they refuse | No doorstep bill to refuse | The carrier returns the goods. You have paid outbound freight and the return, then you refund the order |
What does DDU shipping look like in the UK?
The shipment arrives. The carrier emails or texts the consumer with a payment link. They have to click, fill it out, and pay. That is the experience. It is a bad one.
UK consumers usually assume duties have been paid at checkout, or that they are included in the product price.
Which is better, DDU or DDP?
DDP is what UK customers expect. For an overseas brand selling to UK consumers, DDP is a better customer experience.
With DDU, it is quite hard to make sure every customer understands they need to pay duties, through website copy and emails. Without really good comms, people often do not know duties were not included. Then they feel blindsided and have a bad experience.
The customer will often refuse the parcel. The carrier returns the goods. You have paid the outbound freight twice (out and back) on a dead sale.
Who pays what under DDP, including the fee nobody budgets for
Under real DDP, the carrier pays the duty and the import VAT, charges you for clearance or brokerage, and invoices you for the tax, the duty, and their fee.
If a 3PL owns the carrier account, they rebill you. Sometimes they add their own fee on top.
Line on the invoice | What it is | Who pays it under DDP |
|---|---|---|
Duty | Customs duty on the declared value | You, rebilled by the carrier |
Import VAT | UK VAT collected at the border on consignments over £135 | You, rebilled by the carrier |
Clearance / brokerage | The carrier's fee for doing the customs entry | You. There is always some fee |
3PL add-on | Extra fee if your warehouse owns the account and rebills you | You, if they add one |
On consignments at or under £135, you are usually charging UK VAT at sale rather than seeing it as a border line on this invoice. The brokerage fee still shows up.
How much is the brokerage fee?
The big carriers, DHL and UPS, have brokerage fees of usually around £20 unless you have negotiated it.
Usually, with volume, it can always be negotiated.
If you are using a 3PL, speak to them and ask if they can get that fee lowered. They may have already done it.
Some other smaller carriers usually have much smaller brokerage fees, so it is often good to look at other ones that might have a smaller fee.
Do not budget DDP as just the taxes and duties. Always think about this brokerage fee.
Getting the declared value right
Always double-check that the declared value on the commercial invoice matches the real transaction: what the customer actually paid, not the list price.
If it does not, you often overpay tax and duties.
I have seen this leak on brands running 20% discounts that never flowed through to the commercial invoices. Taxes and duties were paid on the full list price, and they were overpaying.
These are the sorts of checks I often do for brands and try to fix.
Always double-check what is on that commercial invoice.
How to actually collect duty and tax from your customer
You pay HMRC either way. So collect it somewhere.
There are two models that work.
Model | How it works | Watch out for |
|---|---|---|
Price it into the product | Bake duty and tax into the selling price. Checkout stays simple. | If you forget to bake it in, it comes off your margin. You still pay HMRC. |
Checkout calculator | Show taxes and duties payable before the customer pays. Shopify can do this if it is configured properly. | If it is not configured, the customer never sees the amount, and you are back to eating it. |
Price it in if you want a clean checkout and you know your duty and VAT well enough to fold them into the ticket price.
Show it at checkout if you want the customer to see taxes and duties payable before they pay. That is the closer match to how UK shoppers already think about VAT: it is itemised, then they pay, then they are done.
Do not turn this into a VAT-return project. One line on getting the money to HMRC: at or under £135 that is usually the VAT return, after you charged it at checkout; above £135 the carrier often pays at import and invoices you (the DDP rebill). The detail sits in the posts on the UK VAT threshold for overseas sellers, the £135 import VAT rule, and the importer of record. Those are next in this series.
The VAT trap overseas brands miss
£135 does not mean VAT-free. It changes how VAT is collected, not whether it is due.
On a consignment of £135 or less, sold direct (not via a marketplace) into Great Britain, you must charge UK VAT at the point of sale and register for UK VAT. There is no threshold for overseas sellers. On a consignment over £135, normal import VAT and customs apply at the border. Low value consignment relief is gone.
That is the flag, not the explainer. Who is named as the importer of record on a DDP shipment is the same kind of flag: DDP says you are responsible for the import, but the named importer is a separate question. I unpack the threshold, the £135 rule, and the importer of record in those three follow-up posts rather than turning this one into a VAT manual.
Is DDP shipping right for your brand?
If you are an overseas brand shipping into the UK, yes: get DDP set up properly, either priced in or in checkout.
UK consumers usually assume duties have been paid at checkout, or that they are included in the product price.
DDP shipping into the UK is not a slogan you toggle in a carrier account. It is an actual setup: the Incoterm, the carrier's DDP product, the declared value, the brokerage, and a way to collect the tax before you pay it out. Miss any one of those and you are back to angry tickets, refused parcels, or duty on the wrong number.
DDP is a great way to get started shipping into the UK, but there will come a time when having local fulfilment is better. I outline how ecommerce fulfilment works in the UK, and getting set up with it, in the UK fulfilment guide for overseas brands.
Setting DDP up correctly: a quick checklist
Use this as a sense-check on the live setup.
- Confirm you are actually on DDP. If customers are still getting a payment link, you are on DDU whatever the label says.
- Ask what the brokerage fee is. On DHL and UPS, budget around £20 a shipment unless you have negotiated. Ask the 3PL to push it.
- Match the declared value to the real transaction, including discounts. Then check what the carrier filed.
- Collect duty and tax from the customer, either baked into the price or shown at checkout (Shopify can do this if it is configured properly).
- Do not treat £135 as VAT-free. Charge it at sale or expect it on the DDP rebill.
If any of those is fuzzy, that is the work. The newsletter is where I send the next practical bit of this, one a week.
DDP shipping: frequently asked questions
What is DDP shipping?
Delivered duty paid (DDP) means the seller pays the duty, import VAT and customs clearance, so the parcel arrives with nothing for the customer to pay. That is what DDP shipping is: you take the customs bill, they take the parcel.
What's the difference between DDP and DDU?
Under DDP, you pay duty, import VAT and the carrier's clearance fee. Under DDU, the customer pays all three. The DDU experience in the UK is a carrier email or text with a payment link; they have to click, fill it out, and pay before the parcel is released.
Do Royal Mail do DDP?
For an overseas brand shipping into the UK, DDP is typically set up with international couriers such as DHL or UPS, who can pay the duty and import VAT and invoice you. Royal Mail is the UK's domestic parcel network, not the usual inbound DDP setup.
Who is the importer of record on a DDP shipment?
On DDP, the seller is responsible for duty, import VAT and clearance. Who is named as importer of record is a separate question. That is the next post in this series, not this one.
How much does DDP shipping cost?
On top of taxes and duties, DHL and UPS charge a brokerage fee of usually around £20 unless you have negotiated it. Usually, with volume, it can always be negotiated. If you are using a 3PL, speak to them and ask if they can get that fee lowered: they may have already done it. Smaller carriers usually have much smaller brokerage fees, so it is often good to look at those. Do not budget DDP as just the taxes and duties. Always think about this brokerage fee.
Does the £135 threshold mean no VAT on my UK shipments?
No. £135 changes how VAT is collected, not whether it is due. At or under £135, sold direct into Great Britain, you charge UK VAT at the point of sale. Over £135, import VAT is collected at the border. It is not VAT-free.
Wrapping up
DDP shipping is the model UK shoppers already assume you are on. The definition is simple. The setup is where brands leak money: accidental DDU, an unbudgeted brokerage fee, duty on the full list price, and tax you paid HMRC but never collected at checkout.
Get those four right and the parcel just arrives. That is the whole point.
About the author
I have spent five years helping overseas ecommerce brands get UK fulfilment working. I lead growth, sales and product at Gonini: I source the warehouse partners, the carriers and the technology, and I am usually the one who has to make them run together. More on the About page.
Keep reading
- The UK Fulfilment Guide for Overseas E-Commerce Brands: how UK fulfilment works for overseas brands, what it costs you in control, and how to choose a partner you can trust with your stock.
Go deeper
The next posts in this series cover the importer of record, the UK VAT threshold for overseas sellers, and the £135 import VAT rule.
I send one practical UK-fulfilment tip a week, under two minutes to read. If that's useful, subscribe and I'll send you the next one.
If you want this set up for your UK inbound, connect with me on LinkedIn.
