UK VAT charges when importing question

[Voltaire53]

I know that the present limit to import to the UK without being charged VAT (then being stung £8 by the Post Office for paying the VAT for you) is £15 or £39 for a Gift.

I know that VAT is charged on (value of item+price of postage).

I am just asking whether the LIMIT still applies just to the item (like it always used to) or has it changed to (item+postage)

For example, it used to be that if your item was £14.99 and the postage was £1.01 (ie a total of £16) you didn't get charged because the ITEM was 1p under the £15 limit; but if the item had been £15.01 and the postage 99p (still a total of £16) you would get charged 20% of the whole value (item+postage) £16 = £3.20 VAT and then £8 by the Post Ofice (ie a total of £11.20 in charges) because the ITEM was 1p over the £15 limit.

I think this is still the case but wanted to check the governement didn't make the Limit of £15 the maximum of the whole lot (including postage) to avoid the £1 item with £400 postage declaration loophole... or if they see that do they just say "that looks dodgy, we know the postage isn't that much on that size of box" and open it up to make their own assessment.

Thanks in advance to anyone who is knowledgeable in this area; like I say, I looked into it all ages ago and knew definitively back then - and I also know exchange rates are set at the start of each month by Customs and that the limits do occasionally alter, but would like to check if the methodology itself has changed or if I can apply the latest numbers in the same way I always have in my calculations.

Surprisingly enough the Government website doesn't offer a definitive example like this in case it gives people ideas!

[sjt]

Originally Posted by Voltaire53

For example, it used to be that if your item was £14.99 and the postage was £1.01 (ie a total of £16) you didn't get charged because the ITEM was 1p under the £15 limit; but if the item had been £15.01 and the postage 99p (still a total of £16) you would get charged 20% of the whole value (item+postage) £16 = £3.20 VAT and then £8 by the Post Ofice (ie a total of £11.20 in charges) because the ITEM was 1p over the £15 limit.

I think this is still the case

Indeed it is. But it won't be for much longer, since the EU has already actioned a zero threshold for personal, ex-EU imports, which will kick in in 2020, and in all probability apply here as well (though in theory an unruly Brexit would allow us to set our own rate: but I bet we won't).

In the meantime, head for WowHD, where for reasons unknown - cupidity, incompetence, whatever - payments made by credit card appear online with an at-source VAT supplement of 20% on top, but which mysteriously never finds its way to your actual c/c, charged at the ex-VAT rate. I go on about this on the Wow thread: it's happened to me now on at least eight different orders, and others seem to have experienced it as well.

[Stu123]

Yes I think it still goes on the price of the item no matter the price of delivery so if the item's price is under £15 then no charge but if it's over then you're charged 20% on the item and 20% on the delivery cost. In the UK we can order from Europe without charge no matter the price but if the UK comes out of the EU then i presume it will be just like buying from USA.

[Voltaire53]

Many thanks to both for the info; I shall certaily be on the look-out for EU influenced and/or Brexit changes but for now at least I think I'm doing it right

... and yes, sjt, I bet that even if we can ignore the EU 2020 rule change because it will be post-Brexit (or not at this rate!) we will follow it whether we have to or not, if it makes our Governement more money!... Hopefully at that point a new loophole will open up!

[logboy]

price of the item.

HMC&E perfectly capable and willing to call out false declarations of value and hold an item until the recipient is asked to prove what they actually paid. not happened to me, have read of it.

they don't have to believe the idea of a declaration as a gift either, if (for example) it's from a business sender rather than an individual.

they're using their own predetermined exchange rates for each calendar month, so don't bank on saying the rate made my item under £15 on the day i ordered it :

https://www.gov.uk/government/public...r-2018-monthly

[malcy30]

You should note that the Amazon.com import fees deposit (VAT prepay) works incorrectly as it uses price of goods + shipping in the £15 test.

Therefore given their shipping is $6.98 you can only buy an item around $14 or less tax free.

Have read people here saying this incorrect charge was refunded, but for me it wasn’t and when I complained they said if computer says you owe VAT then you do so no refund. Now I avoid, unless a really expensive boxset on which VAT definitely payable.

[ZombieTwin2]

I just got stung for nearly £20 by those robbing bastards, turning a box-set that seemed like a bargain from another country into something that would have ultimately been cheaper if I had picked them up individually here on the secondary market.

EIGHT QUID of that is a f*cking handling charge. It costs eight quid for some goon to open a parcel and then contact the Post Office?

I will have to pay the poxy thing, but I will be wiping my arse with the £20 prior to handing it over.

[Voltaire53]

Originally Posted by ZombieTwin2

EIGHT QUID of that is a f*cking handling charge. It costs eight quid for some goon to open a parcel and then contact the Post Office?

Nope; the goon looks at the label and if it says >£15 he sticks a label on to say there's a charge and then the PO charge you £8 for paying it on your behalf!

[Si Parallel Universe]

I really don't get how RM or Parcel Force can justify the £8 handling fee when every single parcel is handled through customs to prevent the illegal importation of substances and goods.

Surely the price that was paid to send it from the country of origin includes the journey to your door ?

[ZombieTwin2]

Originally Posted by Voltaire53

PO charge you £8 for paying it on your behalf!

Then I have no qualms whatsoever about leaving traces of tonight's dinner on the score when I hand it over tomorrow morning.

[logboy]

Originally Posted by Si Parallel Universe

I really don't get how RM or Parcel Force can justify the £8 handling fee when every single parcel is handled through customs to prevent the illegal importation of substances and goods.

Surely the price that was paid to send it from the country of origin includes the journey to your door ?

the journey to your door via RM, who charge to administrate the collection of charges due to value and category of goods on customs behalf only if over the limit.

customs are checking imports for their value too, hence import duty and vat, as defined by law.

[chip75]

I don't think there's any justification for such a low import limit on items for us lot in the first place. I know other countries have it worse, but some have it so much better.

[Si Parallel Universe]

Originally Posted by logboy

the journey to your door via RM, who charge to administrate the collection of charges due to value and category of goods on customs behalf only if over the limit.

customs are checking imports for their value too, hence import duty and vat, as defined by law.

That's the job of Customs , every parcel is checked by them regardless of value. Nothing to do with the carrier who brings it to their door.

The 'administration' claim is puerile nonsense as parcels/packages are only given over for delivery once they have passed through the screening process, they do nothing other than facilitate a charge. Why should that charge attract a fee in excess of the Customs duty (VAT) ?

[Shingster]

I'm sure I was told by someone (and I complete forget where) that customs opens up and checks the contents of the package, then the post office has to re-seal it and that's where the "costly" handling on their side comes in. I wouldn't be surprised if customs handles everything and all RM do is slap a label on it though.

[malcy30]

The handling fee is just a money spinner for the delivery companies. As noted above they claim they need it as they pay any VAT owed to get Customs to release the parcel. Then they have to get that money off you and balance the books.

With Royal Mail it’s manual as they then apply tracking on the item to your local sorting office. Once there your local post person has to deliver you a card saying item at sorting office and money owed. So you go there and pay the person in the collections counter to get the parcel. Royal Mail then need to tally up your payment vs what they paid out for the VAT part and they pocket the £8.

Even less justified by the big courier companies like DHL and UPS as they get an electronic customs declaration from Amazon.ca etc. Their computers then calculate what is owed in VAT add their £8 then email you. Then you log onto their website to pay and once paid the system releases parcel to continue the delivery. So the cost here are pennies and they still charge £8.

I know the Royal Mail doubled their fee many years ago as these type of charges are controlled by the Post Regulator unlike a standard 1st class stamp so they can charge what they like.

[chip75]

Originally Posted by Shingster

I'm sure I was told by someone (and I complete forget where) that customs opens up and checks the contents of the package, then the post office has to re-seal it and that's where the "costly" handling on their side comes in. I wouldn't be surprised if customs handles everything and all RM do is slap a label on it though.

I think it's very unlikely that customs open more than a handful of our packages, they just don't have the manpower to do so. Our orders may be randomly checked, but they're rarely opened and I've yet see see anything arrive my end that has been repackaged. They're just scanned.

Obviously customs do open packages, one of our members from the Middle Kingdom, routinely has his packages opened, as they have strict rules on the content allowed in the country.

Our handling fee is basically a charge for a label and their "inconvenience".

[sjt]

Originally Posted by chip75

I don't think there's any justification for such a low import limit on items for us lot in the first place. I know other countries have it worse, but some have it so much better.

George Osborne (when Chancellor) quietly lowered it from £18 to £15, where it remains pro-tem. But some time next year the import exemption threshold will be abolished in all EU countries, and probably here as well, meaning VAT will be payable on all items without exceptions at the individual country's rate even if the thing costs no more than 50p.....

[SymbioticFunction]

Just the other day, I had to pay 27.65 pounds to receive a package which included a 12 pound handling fee to royal mail's parcel force division. My wife is American and her relatives sent her some Christmas gifts. The US sticker said value of items was 100 dollars, I told my partner to ask her relatives to just put the cost at 15 dollars in future. I'll be pretty gutted if we have to pay a similar fee in 12 months time!

[Shingster]

Originally Posted by chip75

I think it's very unlikely that customs open more than a handful of our packages, they just don't have the manpower to do so. Our orders may be randomly checked, but they're rarely opened and I've yet see see anything arrive my end that has been repackaged. They're just scanned.

Oh yeah, it's got to be a pretty damn small percent that's actually handled by customs (especially now that the tories have lowered the VAT limit), but that won't stop RM or couriers charging everyone for handling! As others have said though it probably just comes down to the admin of balancing the books if RM are paying the custom fees for us.

Originally Posted by sjt

George Osborne (when Chancellor) quietly lowered it from £18 to £15, where it remains pro-tem. But some time next year the import exemption threshold will be abolished in all EU countries, and probably here as well, meaning VAT will be payable on all items without exceptions at the individual country's rate even if the thing costs no more than 50p.....

And if you remember back when Labour was in power there was talk of abolishing VAT altogether because they claimed that the cost of processing all the £18+ packages was so great that it just wasn't worth the effort of getting the VAT gains... so what do the Tories do? Increase the VAT while at the same time lowering the VAT limit and increasing the strain on customs!

I do wonder how they're gonna cope with European parcels being added on top now!

[malcy30]

Originally Posted by chip75

I think it's very unlikely that customs open more than a handful of our packages, they just don't have the manpower to do so. Our orders may be randomly checked, but they're rarely opened and I've yet see see anything arrive my end that has been repackaged. They're just scanned.

Obviously customs do open packages, one of our members from the Middle Kingdom, routinely has his packages opened, as they have strict rules on the content allowed in the country.

Our handling fee is basically a charge for a label and their "inconvenience".

I remember back in the old days or laserdiscs and early DVDs, Customs were always on the look out for packages from certain retailers and opened any they could find. This was so they could sieze banned titles.

I can’t remember the name of the US retailer concerned but remember they stopped shipping Cannibal Holocaust to the UK aa they had so many siezed. Not sure if still banned then or only a heavily censored version allowed here, anyway the uncut version was definitely illegal. They did the same with certain well known Dutch and Swedish retailers shipping “adult” material to UK.