All you need to know about how much goods from abroad will cost you
Buying goods and services from outside the UK has become more complicated after Brexit. Although the “free trade” deal was agreed (which means there are no quotas or tariffs on goods traded between the EU and UK) there are now extra taxes and costs when you import goods from the EU.
These additional charges will be costly for the consumer. The Office for Budget Responsibility has forecast that these changes will raise more than £300 million a year over the next five years. Taxation (Post-transition Period) Bill debate in the House of Commons.
It also believes that these changes will level the playing field with purchases from countries outside of the EU so that UK businesses are not disadvantaged by VAT free imports. However, whether this has taken into consideration the likely suspension of many companies taking orders from the UK and/or fewer consumers purchasing from abroad is unclear. One can’t expect consumers to be purchasing more expensive items from the UK once Customs Duty and Import VAT is added into a price. Will the increased tax paid by UK companies on increased sales equal the loss of Import costs? We may find that as UK companies have to import a lot of parts from abroad that actually costs go up more. It is hard to see any positive outcome for the consumer.Here’s what you need to know:
1) Receiving a gift from outside of the UK under £39
This will be free from Customs Duty and Import VAT.
2) Receiving a gift from outside the UK
For gifts worth between £135 and £630, Customs Duty will be charged at 2.5% but rates are lower for some goods. See Imports and exports: general enquiries
3) Receiving a gift of alcohol or tobacco from outside the UK under £39
No import VAT or Customs Duty will be due on tobacco, so long as quantities are less than 50 cigarettes or 25 cigarillos or 10 cigars or 50 grams of smoking tobacco. No import VAT or Customs Duty will be due on alcohol and alcoholic beverages so long as quantities are limited to 1 litre of distilled beverages and spirits of an alcoholic strength exceeding 22% by volume, undenatured ethyl alcohol of 80% by volume and over or distilled beverages and spirits, and aperitifs with a wine or alcohol base, tafia, saké or similar beverages of an alcoholic strength of 22% by volume or less, sparkling wines and fortified wines or 2 litres of still wine.
4) Receiving gifts of perfumes and toilet waters
Customs Duty and Excise Duty are not chargeable. Import VAT will be due if on perfume over 50 grammes or 0.25 litres of toilet water chargeable or if the goods’ value exceeds £39.
5) Multi-gift packages containing more than one gift and clearly intended for several people
When you receive a parcel full of gifts for more than one person the £39 limit referred to above applies to each individual person as long as the goods are:
- individually wrapped
- specifically addressed to them
- declared separately on the customs declaration
- within the allowances specified
- marked with the price for each individual item on the declaration
If more than one individual package is addressed to a particular person, the value of the goods will be added together. If the total value exceeds £39, the rules above regarding an item more than £39 will apply.” https://www.gov.uk/government/publications/notice-143-a-guide-for-international-post-users/notice-143-a-guide-for-international-post-users
6) Multi-gift packages containing more than one gift for one person
These should be separately described and given a value on the customs declaration. Each package inside the parcel must be separately described and given a value on the customs declaration. The Customs Duty waiver will apply to each item (See point 2 above). For import VAT the total of value of items is applied and anything over the £39 threshold will attract the VAT.
7) When one item is sent to 2 people
The relief is not split.
When one item is sent to 2 people and its value exceeds £39, it’s not possible to aggregate each person’s gift relief, and the value of an individual item itself cannot be divided. E.g. an item for £50 will still attract VAT on the £11 above the £39 limit.
8) Buying something from outside of the UK
You will have to pay Import VAT at 20%.
9) Buying alcohol, tobacco products and fragrances (e.g. perfume, eau de toilette and cologne) of any value from outside the UK
You will have to pay Import VAT at 20%.
10) Buying something from outside of the UK over £300
You will have to pay Customs Duty.
11) Buying alcohol or tobacco alcohol, tobacco products, perfume or toilet waters outside of the UK
Excise duty is liable on all of these items
12) When VAT is charged on items bought from outside the UK
If the item is less than £135 and not bought through an online marketplace, customers in Great Britain (England, Scotland and Wales) will have UK supply VAT charged at the point of sale. In Northern Ireland customers will have import VAT charged
13) Finding out how much the cost of Customs Duty will be
This varies hugely. You will need to go through (a complicated system!) Trade Tariff
14) Buying items through an online marketplace such as eBay or Amazon
All items bought through an online market place, regardless of price, will include all the duty owed. eBay and Amazon both say that the extra VAT will be paid at the point of sale. It remains to be seen if this is clear on all items.
15) The examination of goods at border control
Border Force staff examine postal packages for prohibited or restricted goods, for example, drugs, indecent or obscene material, weapons, endangered species and counterfeit goods.
They will look to confirm or otherwise the description and value stated on the declaration are correct. They will also check the customs declaration to determine the charges if any of Customs Duty, Excise Duty and Import VAT.
Staff will sometimes need to examine the package contents. For example they may do this when the sender has not completed the declaration correctly. Royal Mail staff will open, repackage and reseal the package under the Border Force instruction.
16) Collection of payments
Royal Mail or the courier will charge a handling fee to cover the costs for carrying out customs procedures and collecting the charges from you. They will collect this fee and any Customs Duty and or Import Duty will be collected from you before you receive the parcel.
17) Complaining about damage to a package
Contact the appropriate Royal Mail or Parcelforce Worldwide Customer Service Centre. If the Border Force has damaged the contents of a package you will receive a letter within it.
18) Rejecting the package at customs
An HMRC advisor said to me that if you reject the package no duty will be charged. However, whether you will get a refund on an item you have bought will depend on the company’s terms and conditions.
19) Questioning import charges
If you have a query or question about the charges you should contact Border Force as soon as possible using the form BOR286.
20) Disagreeing with Border Force’s decision
Within 30 days of the decision you can do one of three things:
- send new information or arguments to the decision maker
- request a review of the decision by someone not involved in making the disputed decision
- appeal direct to the Tribunal who are independent of HMRC
More details of the reviews and appeals can be found here.
If you need help with a purchase bought from within the EU you can contact the European Consumer Centre who should be able to assist you.