Customs Compliance · Valuation

The £40 Discrepancy That Could Cost You: Why Your Commercial Invoice Value Matters

A UK-based chemicals distributor had been importing specialist resins from an Italian supplier for over a year. The agreed price per shipment was £1,000. But the invoices that arrived with each consignment told a different story — £960 here, £975 there.

Close enough, the team assumed. Near enough to the agreed price that nobody flagged it. The supplier was reliable, the goods were arriving on time, and the difference seemed too small to worry about.

What the business didn't realise was that, from HMRC's perspective, the value on those invoices was the one that mattered.

Why Commercial Invoice Value Is the Basis for Customs Valuation

When goods arrive in the UK from overseas, customs duty is calculated on the customs value of the shipment. In most cases, that value is determined by the transaction value — the price actually paid or payable for the goods.

The commercial invoice is the primary document used to establish that value for customs purposes. Whatever figure appears on that invoice is what the import declaration is based on — not the price agreed in the original purchase order, and not any subsequent settlement figure.

So when that figure is consistently lower than the agreed sale price — even by a small margin — the import declarations may be understating the true customs value. And that has consequences.

What HMRC Would Make of It

When two different values appear in an audit trail — the value on the invoice used for customs and the price confirmed in the purchase order — HMRC will want to understand why. If the customs value has been understated, even unintentionally, import duty may have been underpaid. Depending on the volumes and duty rates involved, that underpayment could be significant.

There is also a more serious dimension. Where the declared value does not reflect the price actually paid, this creates a compliance risk that HMRC may scrutinise closely — regardless of whether any error was intentional.

What the Business Should Do

If you recognise this situation — or suspect it may apply to past shipments — there are clear steps to take.

A Question Worth Asking Yourself

This kind of situation arises more often than businesses realise — not through dishonesty, but through supplier habits, administrative shortcuts, or simply not knowing what to look for. The commercial invoice is not just a shipping formality. For customs purposes, it is the record of value on which duty liability is based.

If the invoices arriving with your goods don't consistently reflect the price you've actually agreed to pay, that's worth investigating — before someone else does it for you.