What Is CIF Value?
CIF stands for Cost, Insurance, and Freight. It's the standard basis for calculating import duty in the UK and most of the world.
Key Takeaways
- CIF value = Product cost + International freight + Cargo insurance.
- UK import duty is calculated on CIF value.
- CIF differs from FOB value — FOB excludes freight and insurance.
What CIF means
CIF stands for Cost, Insurance, and Freight. The CIF value of a shipment is the combined cost of: the goods themselves (invoiced price), the international freight to bring them to the UK port of entry, and the cargo insurance covering the shipment in transit. This total is the customs value used to calculate import duty.
Why it matters for duty calculations
UK import duty is applied as a percentage of CIF value. If goods cost £10,000 and freight and insurance add £1,500, the CIF value is £11,500. At a 12% duty rate, duty is £1,380. If you'd used just the product cost in your calculation, you'd have calculated duty at £1,200 — understating the true cost by £180 before other charges.
CIF vs FOB
FOB (Free On Board) value is just the product cost plus loading at the origin port — it excludes international freight and insurance. Some countries use FOB as the customs valuation basis; the UK and EU use CIF. When comparing landed costs across different sourcing decisions, be clear about which basis you are using.
Estimating CIF
If you don't yet know your freight cost, estimates are typically: sea freight £0.05–0.10 per kg for full container loads, significantly more for less-than-container loads. Air freight £3–8 per kg. Insurance is typically 0.5–1% of cargo value. AskBiz's Landed Cost Calculator estimates all three automatically by product weight, shipping method, and route.