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The short answer
For most imports from Nigeria the customs value is the transaction value: the price you pay the supplier for goods sold for export to the UK, plus transport, insurance, loading and handling up to the UK border. HMRC lets you leave out UK transport if it is shown separately, and you convert naira or dollar invoices with the contract rate or HMRC's monthly rate.
Customs Duty and import VAT are percentages of a value, so getting the value wrong gets everything wrong. A Lagos supplier's invoice is the starting point, but it is rarely the final figure. HMRC's valuation rules say what to add, what to take away and what exchange rate to use. This guide walks through them for a typical consignment from Nigeria.
Method 1: the transaction value
HMRC lists six valuation methods. Method 1, the transaction value, is the price the buyer pays or will pay the seller for goods sold for export to the UK, and HMRC says it must be the last sale for export to the UK. Most commercial imports from Nigerian suppliers use it.
Method 1 cannot be used where there is no sale (gifts, free samples, goods sent on consignment, hired goods), where the price depends on conditions whose value cannot be worked out, or where you cannot get the invoice for the last sale before import. Then you move on to the other methods, such as the value of identical or similar goods.
If you and the supplier are related
Family members, business partners and companies where one controls 5% or more of the other's voting rights count as related under HMRC's guidance. A related-party price can still be accepted if "the relationship has not affected the price". HMRC may test this against sales of identical or similar goods to unrelated buyers. This matters for diaspora traders buying from a sibling's shop or from a Nigerian company they part-own.
What you must add to the invoice
- delivery costs to the UK border: transport, insurance, loading and handling, including inland transport in Nigeria and port or terminal charges there
- containers and packing, labour and materials
- selling commission and brokerage
- royalties and licence fees that relate to the goods and are a condition of sale
- assists: materials, tools, moulds or overseas design and artwork you supplied free or cheaply to the maker
- any share of resale proceeds that goes back to the seller
- export duties in Nigeria, where you bear them and get no relief
Carrier surcharges count too. HMRC's delivery costs guidance names currency and bunker (fuel) adjustment factors, peak season, security, war risk and port congestion surcharges, and charges for delay before arrival.
What you can leave out
- UK transport after the border, if shown separately
- buying commission paid to your own agent, if shown separately
- interest under a financing arrangement, if shown separately
- quantity or trade discounts you have actually earned on these goods
- UK duties and taxes included in the price
The rule of thumb is "shown separately". If the Lagos forwarder gives you one all-in figure for door-to-door delivery to Peckham, you may end up including UK legs you could have excluded.
Where the border is, and air freight
HMRC defines the place of introduction by transport mode: for sea, the UK port where goods arrive direct; for air, the point where goods first cross the UK border; for post, the delivery address. Air freight is treated differently from sea. HMRC's examples include only 70% of the air transport cost for journeys from outside the UK, and say the full list of percentages is in a separate HMRC publication, so check the figure for a Lagos or Abuja flight before you rely on it.
Incoterms on the invoice
If the supplier sells ex-works, you add freight from their premises to the port and on to the UK. On FOB terms, you add the freight from the Nigerian port to the UK place of introduction. On CIF terms, freight and insurance are already in the price, and you can deduct any UK transport included if you can evidence it.
Worked example (illustrative figures only)
A London importer buys ankara and dried goods from a Lagos supplier on FOB Apapa terms. The invoice is in US dollars and the importer pays freight separately.
| Item | Amount (example) |
|---|---|
| Invoice price, FOB Apapa | $8,000 |
| Sea freight Apapa to Tilbury | $1,200 |
| Marine insurance | $100 |
| Customs value in dollars | $9,300 |
| Haulage Tilbury to warehouse (shown separately, excluded) | $350 |
| Converted at an example rate of $1.25 to £1 | £7,440 |
Check the sum: $8,000 + $1,200 + $100 = $9,300; $9,300 ÷ 1.25 = £7,440. Duty is then the tariff rate (possibly 0% under the DCTS) on £7,440. For import VAT, GOV.UK says the VAT value is the customs value plus incidental costs to the first UK destination plus any duty, so the Tilbury haulage left out of the customs value can come back into the VAT value.
Which exchange rate
HMRC says you would normally use the exchange rate in your contract. If the contract has none, you use HMRC's published rates in force when the declaration is accepted. HMRC publishes them at the end of each month for the following calendar month and reviews them weekly against commercial rates. Do not use the rate your bank gave you on the day you paid the supplier unless the contract says so.
Where Pryme fits
Paying suppliers in naira or dollars and keeping clean records makes valuation easier. A Pryme Business Account holds NGN, USD, GBP and EUR, and Swap shows the rate and the fee before you approve, which leaves a clear trail for each consignment. See business multicurrency accounts and sending money. Outside Nigeria, these services are provided through regulated partners.
Related reading: checking UK import duty on a Nigerian product and postponed VAT accounting.
Questions people ask
Is customs value just the price on the Nigerian invoice?
Usually not. Under Method 1 you add transport, insurance, loading and handling to the UK border, packing and some commissions and royalties.
Do I include freight from Lagos in the customs value?
Yes, freight up to the UK place of introduction is included. UK transport after the border can be excluded if it is shown separately.
What exchange rate does HMRC use for a dollar invoice?
The rate in your contract if there is one; otherwise HMRC's published monthly rates in force when the declaration is accepted.
My supplier is my brother. Is the invoice price still accepted?
It can be, if the relationship has not affected the price. HMRC may compare it with sales of identical or similar goods to unrelated buyers.
Sources
- HMRC on GOV.UK: How to value your imports for Customs Duty and trade statistics (updated 21 Oct 2026) · accessed Oct 2026
- HMRC on GOV.UK: Valuing imported goods using Method 1, transaction value (last updated 25 Jun 2025) · accessed Oct 2026
- HMRC on GOV.UK: Delivery costs to include in the customs value (updated 15 Apr 2026) · accessed Oct 2026
- HMRC on GOV.UK: Converting foreign currency amounts to include in the customs value · accessed Oct 2026
- HMRC on GOV.UK: Paying VAT on imports from outside the UK · accessed Oct 2026
- GOV.UK: Preference tiers under the Developing Countries Trading Scheme (updated 19 Oct 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.