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Thread: Advice required - Customs VAT/Duty

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    Zzzzzzz sleepyhead's Avatar
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    Advice required - Customs VAT/Duty

    My friend (outside of the EU) posted me a nice gift but I just had to pay Parcel Force a "Clearance Fee" and VAT on it.

    It's a (collectable) toy and the Parcel Force phone line is all automated...I didn't get to speak to a human being.

    Should I have been charged VAT? If not, how do I get it back and how do I get the "Clearance Fee" back from Parcel Force?

    (Actually it is one gift in two boxes so I have been twice charged the "Clearance Fee".)

    It's a bit of a sucker punch I've been hit with and I'm not sure where I stand.

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    Senior Member oolon's Avatar
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    Re: Advice required - Customs VAT/Duty

    How much is it worth? Anything over 18 USD (I believe) you have to pay vat on, which isn't so bad however the 10 quid handling fee sucks for lower cost items. It does not matter if it is a gift or not.

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    Zzzzzzz sleepyhead's Avatar
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    Re: Advice required - Customs VAT/Duty

    Ahh well then I'll just shut up and put up with it then. Live and learn I suppose.

    The item is valued at more than USD$18.

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    Senior Member JPreston's Avatar
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    Re: Advice required - Customs VAT/Duty

    Gifts are VAT free, I thought. But what you end up being charged has little to do with VAT/duty laws and a lot more to do with the courier screwing you out of whatever they can.
    Quote Originally Posted by Bertrand Russell

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    Re: Advice required - Customs VAT/Duty

    According to http://www.hmrc.gov.uk/customs/post/buying.htm#4 as it is a gift (assuming it is of an occasional nature, not paid for by you, and the customs sheet correctly filled out) the value is actually £36 that it would need to be less than to be exempt from VAT.

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    Re: Advice required - Customs VAT/Duty

    Quote Originally Posted by oolon View Post
    How much is it worth? Anything over 18 USD (I believe) you have to pay vat on, which isn't so bad however the 10 quid handling fee sucks for lower cost items. It does not matter if it is a gift or not.
    Sorry, but no. It does matter.


    The basic rule is that you import it, you pay VAT and perhaps import duty on it. However, there are specific rules for postal imports. In the case of commercial consignments, anything with a value under £18 (not 18 USD) the charges will be waived.

    But it's different for gifts. Different levels, and some extra rules, apply.

    As of Jan 2010, rates (and some rules) changed, and the current info can be found in notice VAT 143

    Gifts under £40 should be exempt from VAT. Import duty will also be payable if the value exceeds £135, but again that will be waived if the value if that duty is under £9. This is because the rate that duty is charged at varies hugely depending on the nature of the goods, unlike VAT where it's effectively either 0% or 17.5% (currently).

    But .... it needs to qualify as a gift. First, it needs to come from a private person. So it you order something, and they send it marked gift and it comes from a company, then it isn't a gift. Secondly, it must be accompanied by a correctly completed customs declaration. It must also be something of an occasional nature, like a birthday present.



    Sleepyhead .... if VAT has been paid when it was not due, you need to talk to HMRC. Any parcel on which charges are due will also be subject to a handling charge by Royal Mail or Parcelforce, as they handle inspections and repackaging for HMRC, and if a refund were due on that, you'd need to talk to Parcelforce, if they charged the handling fee.

    However, did your friend complete the necessary customs form when sending? If not, that'll probably be their get out as it needs that to qualify as a gift. And, clearly, even something correctly documented is subject to being opened and inspected or it could be something of a much higher value that declared, or something illegal, like drugs. The "clearance fee" is for this handling of parcels, effectively done by Royal Mail or ParcelForce under sub-contract by HMRC.

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    Re: Advice required - Customs VAT/Duty

    Quote Originally Posted by JPreston View Post
    Gifts are VAT free, I thought. But what you end up being charged has little to do with VAT/duty laws and a lot more to do with the courier screwing you out of whatever they can.
    As above, they are VAT free ONLY under specific conditions and within nominal values. The VAT and import duty are outside the remit of the courier to determine, but as for the courier fee, well, that varies as I understand it.

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    Re: Advice required - Customs VAT/Duty

    hers a summary from a customs bloke on another forum, with a few edits from me.

    one euro = £0.91085 (rate set until end of this year). Duty limits and rates are set by the EU.

    An item costing 22 euros (£18) or less will attract no duty or VAT charges.

    An item costing between 22-150 euros (£135) will attract no Customs duty but will
    be liable to VAT.

    An item costing more than 150 euros will attract duty and VAT.

    The above relates to personal purchases. There is further relief on duty and
    VAT for gifts valued at 45 euros or less. However, this only applies if the gift
    is sent direct by the giver, who must be in the non-EU state. If it comes from
    the retailer it's classed as a purchase and the 45 euro relief rate does not
    apply.

    Also worth noting that you pay VAT on the cost of postage and insurance.

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    Zzzzzzz sleepyhead's Avatar
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    Re: Advice required - Customs VAT/Duty

    Ahh...the collectable toy is worth more than £40. Ahh well, chalk it down to experience.

    Live and learn!

    Seems easier gifting people stuff when they are all in the UK.

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    Re: Advice required - Customs VAT/Duty

    Quote Originally Posted by sleepyhead View Post
    ....
    Seems easier gifting people stuff when they are all in the UK.
    Or indeed, inside the EU, since the importation rules don't apply between member states. While rates between states vary, and as a trader, there are inter-state accounting rules, the EU is one trading block in terms of importation. Either you're inside or outside.

    But if it's coming from the USA, or Australia, or India, China etc, then it's an import and import duty (as well as VAT) can bite.

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    Re: Advice required - Customs VAT/Duty

    Was that your Gumdam model?

    Actually, I do have a question on this: what are the rules on personal belongings? Supposed I go to another country outside the EU, got a little carried away with my personal shopping, and end up finding that it's cheaper to mail the item back than getting fined for going over my weight limit.

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    YUKIKAZE arthurleung's Avatar
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    Re: Advice required - Customs VAT/Duty

    Quote Originally Posted by TooNice View Post
    Was that your Gumdam model?

    Actually, I do have a question on this: what are the rules on personal belongings? Supposed I go to another country outside the EU, got a little carried away with my personal shopping, and end up finding that it's cheaper to mail the item back than getting fined for going over my weight limit.
    Perhaps check the list and only mail items that is tax-free, or have the lowest value? Carry the most expensive stuff with you on the plane.

    Sometimes it is just not possible to get around the tax completely but you can minimize it.
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