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Old 20th May 2020, 7:58 pm   #1
David G4EBT
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Default VAT & Customs Duty on imported items

I thought it might be of interest and help to mention the VAT & Customs charges that apply in the UK to goods sourced from overseas, and at what level they kick in, which is lower than we might imagine. (EG: VAT is payable on goods with £15.00 upwards declared value).

I guess that like many other forum members, I often buy items on ebay from China and sometimes elsewhere outside the UK, though not usually of any great value. The only expensive item I've imported was some years ago which was £75.00 on ebay from China and no import charges of any kind were levied, (though on the Customs declaration form the Chinese do have a tendency to describe goods as 'gifts' with a value of $1.00, but Iím sure that the UK Border Force are wise to that). I did however get charged VAT and a collection fee for a Christmas gift I bought from the USA for one of my granddaughters. (£120 GBP).

Itís also worth noting that even items sent as gifts by someone oversees to a UK recipient will attract VAT if the value stated on the Customs Declaration form is over £39.00. If the value is over £135.00 there will also be Import Duty.

Here's a verbatim clip from the Post Office website which outlines at what level VAT and Import Duty become payable, and how the charges are collected:

Quote:

Customs charges are calculated and applied by the UK Border Force on behalf of HM Revenue & Customs (HMRC). All mail sent to the United Kingdom may be checked by Border Force. Any charges applied will depend on the contents, where it was sent from and who sent it, but usually letters, postcards and parcels of documents are exempt.

Post Office Handling Fee:

To make sure you get your item as quickly as possible, we pay HMRC any Import VAT and/or Customs Duty charges on your behalf. We then send you a ďFee to PayĒ card, showing how much you need to pay before you can receive your item. The amount you need to pay includes our £8 handling fee. This covers the costs for clearing the item through the customs process and presenting it to Border Force.

Items received from non-EU countries (Includes Channel Islands):

Value up to £15: No Import VAT, no Customs Duty.
Value over £15 up to £135 Import VAT but no Customs Duty.
Value over £135 Import VAT plus Customs Duty.

Gift sent from one individual to another:
Value up to £39: No Import VAT or Customs Duty.
Value over £39 up to £135: Import VAT, but no Customs Duty.
Value over £135: Both Import VAT and Customs Duty.

End quote.

Source:

https://www.royalmail.com/sites/defa...t-Jan-2017.pdf

Hence, to take an example of goods to the value of say £16.00, that would attract £3.20 VAT plus £8.00 Post Office Handling fee so the total cost would be £27.20. It all depends on how vigilant the UK Border Force are as to whether the package is checked. I guess that many small parcels will come in 'under the radarí and that itís mostly larger and heavier attract the attention of the UK Border Force that get pulled off the conveyor for checking.

I'm prompted to mention this topic as a friend has just received an electronics item from China bought on eBay, on which he incurred a total charge of £11.75. Given that £8.00 of that is the Post Office Collection fee, the remaining balance of £3.75 is VAT, as Customs Duty only becomes payable on goods over the value of £135.00, whereas VAT is payable on goods over £15.00. The item itself cost £18.75, so was only £3.75 over the £15.00 limit. With the 20% VAT on his £18.75, (which is £3.75) that would be £22.50 in all. Had the item been sourced in the UK he would of course have had to pay the VAT so no problem with that, but the sting in the tail is the £8.00 Post Office collection fee, bringing the total to £30.50. (Size wise, the item was about half the size and weight of a house brick).

I know that from time to time some forum members import packs of capacitors and resistors from a supplier in Canada, and whenever the topic has cropped up, I think that no one has generally had any charges levied, but that doesn't mean they may not be. £15.00 is quite a low value and if goods costing more than that are needed, it might be advantageous to place more than one order to keep below that ceiling, unless of course the additional postal charges would outweigh the VAT and £8.00 Post Office collection fee..

To some extent it's the luck of the draw, but its as well to be aware of the charges in advance so you can make an informed decision.

Hope that's helpful.
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Old 20th May 2020, 8:29 pm   #2
Hartley118
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Default Re: VAT & Customs Duty on imported items

A useful reminder of how it all works David.

The Post Office handling fee may appear unreasonable, but it actually reflects the cost of paying the officers who run the inevitable bureaucratic system. Trade has both tariff barriers and non-tariff barriers and the latter also have to be administered: they’re usually technical in nature and are often more costly than the tariffs themselves. That’s why free trade areas were invented. I must shut up at this point or I’ll be OT.

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Old 20th May 2020, 9:04 pm   #3
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Default Re: VAT & Customs Duty on imported items

David,

I'm afraid that my reading of the rules on VAT on imported goods is rather worse than you have set out. As far as I recall its also my experience of paying huge amounts of VAT.

What you seem to have missed is that there is VAT also on the shipping costs to the UK, plus VAT on the customs/excise duty! So there is tax on the tax.

I'm taking this from: https://www.gov.uk/guidance/vat-impo...es-from-abroad


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Old 20th May 2020, 10:01 pm   #4
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Default Re: VAT & Customs Duty on imported items

We (UK) are supposed to pay the taxes mentioned, bit of a bonus if they are not levied. I wonder how far back they can go, if at all, to reclaim unpaid/missed tax?
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Old 20th May 2020, 10:02 pm   #5
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Default Re: VAT & Customs Duty on imported items

Will the same rules apply to EU countries from next year I wonder?

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Old 20th May 2020, 10:21 pm   #6
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Default Re: VAT & Customs Duty on imported items

That’s what’s supposed to be under negotiation currently. But two costs tend to be forgotten:

1. The bureaucratic cost of having any duty at all, however small. Customs officers must be paid and port inspection delays are costly and irritating, even to us hobbyists.

2. The cost of non-tariff technical barriers. Some forum members here may remember the frustration back in the day of exporting electronics to Germany or Austria if it lacked the formal certification to verify its precise conformity with the relevant DIN standards.

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Old 21st May 2020, 7:08 am   #7
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Default Re: VAT & Customs Duty on imported items

VAT in theory is payable on all items but low value items tend to go through unchallenged.
Some items are exempt from duty, in particular electronic kits and some components. The supplier should have specified the appropriate tax code category on the customs declaration. This is important, many years ago my Elecraft K2 transceiver kit came through with no duty - but I of course had to pay VAT and courier charge.

As for China, I guess anything goes!

Dave
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Old 21st May 2020, 7:38 am   #8
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Default Re: VAT & Customs Duty on imported items

Quote:
Originally Posted by David G4EBT View Post


Items received from non-EU countries (Includes Channel Islands):

.....
Value over £135 Import VAT plus Customs Duty.

...
Unless they have changed a lot of things, the above sentence is not strictly true.

For example, Amateur Radio equipment and electronic kits can be imported with 0% duty under the commodity code 8525600000 and there are a lot of other third party duty classifications at 0% duty.
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Old 21st May 2020, 7:39 am   #9
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Default Re: VAT & Customs Duty on imported items

I find the catch-all £8 clearance fee onerous. The vast majority of what I buy from abroad attracts a very small amount of VAT. A case in point is a leather case for a calculator I bought from the US that arrived a couple of days ago. VAT was about £3.25, and the total was £11.25.

Of course it is less of an issue if the VAT (or VAT + Import Duty) is much larger.

There has to be an argument for there being a sliding scale, so small VAT charges attract a small clearance fee, and higher VAT attracts a higher fee.

OK - so this all costs administration to make it work. However (a) when using a shipping calculator at Parcel Farce and other carriers, there is no difficulty in them handling a sliding scale of shipping charge and (b) the same argument holds for the sliding scale of charges for postal mail, where there is a range of charges depending on the envelope size and thickness. So it has to be possible, in principle, to make it work for imports.

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Old 21st May 2020, 10:44 am   #10
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Default Re: VAT & Customs Duty on imported items

Quote:
Originally Posted by Craig Sawyers View Post
I find the catch-all £8 clearance fee onerous.
I used to think that, then I moved to Poland.

Here, importing anything that exceeds the VAT/duty thresholds (which are the same as the UK) requires interacting with the customs office, either creating the proper multi-page Single Administrative Document for import or writing a letter (in Polish, of course) confirming that the goods are for personal use and not for resale, providing evidence of the original purchase price (invoice translated into Polish) and how the money changed hands, and then paying separate fees for customs clearance, any VAT or duty due, and then to someone else in the office next door for "storing the package". In cash, no change given. On one memorable occasion I had to show my passport 7 times and spend all morning at the sorting office in order to obtain a package which had cost me about £50.

£8 to have all documentation and queueing requirements waived seems like a bargain!

Chris
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Old 21st May 2020, 11:39 am   #11
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Default Re: VAT & Customs Duty on imported items

It depends on which company you buy goods from. I have bought several different parts from Digi-key, an American based company that has a Uk office, and all VAT on other charges are included in the price paid in UK pounds as shown onscreen. Free carriage over £33 and usually arrives in 48 hours with detailed tracking information. Ordered a transformer for a jukebox late Saturday afternoon, picked packed and waiting couriers collection in 20 minutes, and it was on my doorstep at 9.20 Monday morning. Superbly double packed, not even a mark on the outer box. Of course there was no ‘extra’ post office £8.00 charge.
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Old 21st May 2020, 11:54 am   #12
Craig Sawyers
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Default Re: VAT & Customs Duty on imported items

Same with Mouser. I get things from Mouser quicker than from Farnell.

Poland sounds like a miserable place to import stuff directly, Chris. Why not get it delivered to your Cambridge address, and then reship inside the EU?

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Old 22nd May 2020, 9:46 am   #13
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Default Re: VAT & Customs Duty on imported items

Quote:
Originally Posted by Craig Sawyers View Post
Same with Mouser. I get things from Mouser quicker than from Farnell.

Poland sounds like a miserable place to import stuff directly, Chris. Why not get it delivered to your Cambridge address, and then reship inside the EU
It is! I do import things to the UK then reship for some items, or just collect them on a visit, but the additional cost and trouble of doing that has to be balanced against simply dealing with the system here. I'm not looking forward to the end of this year's transition period one little bit.

Companies like Mouser which operate as "approved shippers" (I forget the proper term) are, on the other hand, a joy to deal with, because all these problems just go away regardless of where they choose to ship the goods from.

I'm also an enthusiastic supporter of the eBay international shipping programme for the same reason: though it's expensive, it's worthwhile just to have the goods turn up on my doorstep without wasting any of my limited time on admin. I buy quite a lot of test equipment and accessories from the US, because that's where it's easy to find and prices are affordable (my "daily driver" Tek 7904A scope was a princely $69), so to have someone else take care of the bureaucracy is wonderful.

To my fellow enthusiasts in the UK: I know the £8 charge is annoying, but it could be very, very much worse. The UK system is actually quite a pleasure to deal with, compared with its international competition.

Chris
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Old 25th May 2020, 9:26 pm   #14
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Default Re: VAT & Customs Duty on imported items

Quote:
Originally Posted by cmjones01 View Post
I'm also an enthusiastic supporter of the eBay international shipping programme for the same reason: though it's expensive, it's worthwhile just to have the goods turn up on my doorstep without wasting any of my limited time on admin.
Sometimes the GSP works fine, other times they are a PITA if they decide the item is restricted or haven't a clue. You have to be careful to avoid items that may have keywords that trigger this, also be aware that if a item/parcel is too big or heavy they won't accept it either. In each case they dump the items with a reseller.

Also there is a new shipping option for US ebay sellers called "ebay send" this works very similar to GSP, the item goes to a warehouse in Kentucky, but the difference is that customs fees are not prepaid and it's then taken by DHL.
Got my first item arriving by this service, I don't know how much they will charge yet, in fact it's very hard to out if anyone has had trouble with this service due to the two common words they chose to call it.

David
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Old 26th May 2020, 10:44 am   #15
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Default Re: VAT & Customs Duty on imported items

For small items it does create the silly situation, especially with vendors of small items offering a free-postage deal, that you have to be careful about buying multiple items. With free postage buying several individual £10 items is way cheaper than one package would be. (Which seems daft).
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Old 26th May 2020, 2:54 pm   #16
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Default Re: VAT & Customs Duty on imported items

The mention of the need to be careful with key words reminds me of a letter in an Amstrad PCW magazine recounting the problem the writer had had with Irish customs when ordering a book whose title was " The Amstrad CPM+ Manual" . He got a letter from them confirming that no duty was due on the manual, but could he please let them know what a CPM was so they could assess if duty was payable on it?
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Old 26th May 2020, 3:42 pm   #17
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Default Re: VAT & Customs Duty on imported items

Sort of on topic there are now so many Chinese vendors on eBay with Chinese addresses but stating the location of what they are selling is in the UK, often with estimated delivery times in weeks. I had a discussion with said website recently about this asking what I should do if an alleged local shipment arrived with duty to pay. We agreed that I should refuse to accept it and demand a full refund, and report the vendor. It hasn't happened ... yet.
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Old 26th May 2020, 9:38 pm   #18
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Default Re: VAT & Customs Duty on imported items

Quote:
Originally Posted by factory View Post
Also there is a new shipping option for US ebay sellers called "ebay send" this works very similar to GSP, the item goes to a warehouse in Kentucky, but the difference is that customs fees are not prepaid and it's then taken by DHL.
Got my first item arriving by this service, I don't know how much they will charge yet, in fact it's very hard to out if anyone has had trouble with this service due to the two common words they chose to call it.

David
Well the "ebay send" parcel was delivered by the local postie today, but the label said Deutsche Post, I still think I might get a bill for VAT as it was over £15.

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Old 26th May 2020, 10:05 pm   #19
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Default Re: VAT & Customs Duty on imported items

If it's been delivered, it sounds as though you've dodged the VAT, otherwise you would probably have had the demand for payment before the parcel being released.
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Old 26th May 2020, 10:27 pm   #20
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Default Re: VAT & Customs Duty on imported items

I've not necessarily dodged it, as I've had deliveries from Parcelforce & Fedex with bills that arrived afterwards.

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