“DDP, all-in, delivered” sounds like the simplest way to import. It usually is — until the invoice arrives with a clearance fee nobody mentioned. Here is exactly what DDP moves from your side of the deal to the forwarder's, and where the gaps still sit.
DDP stands for Delivered Duty Paid, one of the eleven Incoterms 2020 rules. It is the rule that puts the maximum obligation on the seller. On paper, the seller is responsible for everything from the factory gate in China to the named place in the UK: export clearance, main carriage, import clearance, customs duty, import VAT, and delivery — with the buyer only responsible for unloading.
So the invoice you sign under DDP should be genuinely landed. For a shipment from Shenzhen to a warehouse in Manchester, a proper DDP price includes:
Where DDP quotes go wrong is not usually the big items. It is the small conditional ones: a customs examination, a demurrage day because the supplier delivered late, an oversized pallet that needs a tail-lift, a delivery to a residential address without a loading bay.
This is the part most buyers never ask about, and it decides whether your accounts work out.
UK customs needs an importer of record with a GB EORI number for every declaration. There are two ways a DDP shipment gets one:
| Model | Importer of record | Who pays duty and VAT | Who can reclaim VAT |
|---|---|---|---|
| Forwarder's DDP | The forwarder or its UK entity | Forwarder, recharged in your freight price | Only the forwarder — not you |
| DDP on your EORI | You | Forwarder pays on your behalf, then invoices you | You, on your VAT return |
Both are legitimate. They are not the same product. If you are VAT-registered in the UK and want the import VAT back, you need the second model — your EORI on the declaration, and the C88/CDS entry evidence in your records. If you are testing a product and simply want goods at your door with no paperwork, the first model is fine, but the VAT is a real cost to the forwarder and is priced into what you pay.
Import VAT on most goods entering the UK is 20%, charged on the customs value plus duty plus the cost of freight to the UK border. For a container of goods worth £40,000 with duty at 4%, that is roughly £1,600 duty and about £8,320 VAT. Under a forwarder's DDP that money is paid at import and folded into your invoice. It is not recoverable by you, because you were never the importer.
For a VAT-registered business, that is often the single largest avoidable cost in the whole shipment. The fix is not exotic: give the forwarder your GB EORI, ask for the declaration to be made in your name, and use postponed VAT accounting (PVA) so the VAT is accounted for on your return rather than paid in cash at the border. You still owe the VAT, but you reclaim it in the same period, so the cash never leaves your account.
| Term | You arrange | Typical use |
|---|---|---|
| EXW | Everything from the Chinese factory door | You already have a China agent |
| FOB | Main freight, UK clearance, duty, VAT, delivery | Buyers with their own forwarder |
| CIF | UK clearance, duty, VAT, delivery | Rarely a good deal — insurance and freight are marked up |
| DAP | Import clearance, duty and VAT only | Buyers with a UK customs broker already |
| DDP | Nothing but unloading | First imports, samples, FBA restocks |
The mistake we see most often is a supplier quoting “DDP” on Alibaba when they mean DAP: the goods land, the courier asks the buyer for duty and VAT before release, and the buyer thinks they have been cheated. Ask for a copy of the import declaration and confirm in writing that duty and VAT are included in the number you were quoted.
Get those three answered in writing and DDP behaves exactly as advertised: one number, one invoice, goods at your door. Skip them and the “all-in” price tends to grow a second invoice about ten days after arrival.
Yes. DDP is a standard Incoterms 2020 rule. What is restricted is acting as importer of record without the right registrations — which is why forwarders either clear on their own EORI or use yours.
Under a true DDP it should. Always confirm in writing that duty and import VAT are included, because many “DDP” quotes in practice only cover freight and clearance.
Normally no. The VAT is recovered by whoever is named as importer of record. To reclaim it yourself, the declaration must be made on your GB EORI.
Not always. DDP bundles duty and VAT into the price, so the headline number is higher; FOB looks cheaper but you pay clearance, duty and VAT separately. Compare landed cost, not freight cost.