Customs & Excise 101 - for purchases outwith the EU

Just a quickie for all who may import stuff personally - from outside the EU (inside the EU doesn't count as an import - apart from prohibited items like guns, hardcore porn and whatever else HMRC deem inappropriate for UK buyers).

First thing to understand is that there is a difference between VAT & Customs Duty. When it's all charged, you pay on the whole amount including postage.

So ((Goods + postage) * Duty) * VAT

Then on top a brokerage fee (which varies by carrier)

The "official statement" is here written in governmentese.

Article 27 of EU Regulation 918/83 sets out the threshold for items delivered by letter or parcel post to be admitted free of Customs duty. This is €150 (£105) from 1 December 2008. Customs duty is not collected if the amount of duty due is less than €10 (£7). VAT applies from €22(£18)

So between £18 and £105, you pay the VAT but no duty - if it's £106 you pay VAT & duty.

Generally courier companies (so FedEx, UPS, etc) will charge a higher brokerage fee (£20-£30) but DHL apparently charge just £1.25 for deliveries to residential addresses.

Royal Mail used to charge a different fee depending whether it arrives as parcel post (ie. Parcelforce) or as Letter Post - no idea if they still do or not - it's decades since I had the pleasure (it's nice when your postie is helpful at losing the paperwork :D )

You'll notice that the limits are in €uro and translated in to £ at a strange rate (compared to the actual rate today of about 1.10, it's nearer 1.20) - these conversion rates are set once per year - not sure exactly when that happens though. It has no bearing on the exchange rate applied by HMRC on imports though there's a separate rate used for that changed generally once a month. So sometimes it's possible that the duty-free limit in the UK is higher (or lower) than into the Eurozone (same applies for viewers in Denmark & Sweden, but in DKK or SEK)

A quick worked example:

I buy a brush for $200 from BrushCo in the US. It's shipped by USPS Priority International Airmail (say franked as $29) and declared as "Brush $200" on the CN22 customs form.

Customs will assess this as ($200+$29), unless there is a document enclosed that HMRC find saying the price paid including shipping is $200.

They will convert this into sterling at their prevailing rate for the month. It's generally an "ok" rate - not spectacularly good or bad (unless there has been a big change in the exchange rates).

So this month that's $229/1.419 = £161.38

Now they work out the duty - I'll assume it's 3.5% (no idea if it is or not, but it's a figure to work from) the duty will be £161.38*0.035 = £5.64 (so they won't collect it! :p )

Then they work out the VAT (based on the base price plus the duty) - so in this case on £161.38 (15% VAT = £24.21)

Add on the brokers fee and that's what you get to pay at the door - usually in cash, and the postie/delivery driver rarely, if ever, has change - so time to keep a jar of change near the door - if it's a courier, I like to pay in 5p coins :lol: This is vitally important - get a receipt! If the driver is on the fiddle, you may find a demand for payment of the duty arrives by post weeks later.

If you feel that you've been overcharged (or undercharged and you feel like bunging a few quid into Alistair Darling's pocket) you can appeal the VAT & duty levied - but not the brokerage fee direct with HMRC. If you manage to get all of the VAT & duty refunded on appeal, it would naturally be worth appealing the brokerage fee as well - however you have to pay the delivery agent for them to release the goods and claim it back. My experience here is that HMRC take about 3 weeks to acknowledge and pay out on appeal (which they do by BACS with an accompanying letter)

Actually in reminding myself of all the intricacies I found this site which seems to have helpful advice (including the current rates used by HMRC)

<!-- m --><a class="postlink" href="http://www.ukimports.org/">http://www.ukimports.org/</a><!-- m -->

No affiliation with them nor have I looked too far at what they're trying to do - the information should be on <!-- m --><a class="postlink" href="http://www.hmrc.gov.uk">http://www.hmrc.gov.uk</a><!-- m --> - but it's like trying to map a plate of spaghetti that's alive.

Of course if it comes from inside the EU (remember that the Azores, Canary Islands, Aland Islands, Isle of Man, Channel Isles, Gibraltar and probably a load of other territories like them - are outside the EU) there should be no additional charges - if you get the YTS at the broker who doesn't know what's inside and outside the EU you can get comedy charges on EU-originated packages (I have an understanding and intelligent manager at my local Royal Mail delivery office, so that's quick to solve for me) or based on US dollar values when the package is declared in Hong Kong Dollars (that's about a factor of 10 difference).
 
A very detailed post from HM; as a basic rule of thumb I ask the sender to keep the stated value under $30 USD. This may cause issues later in terms of a claim if things go missing so be warned...
 
Not sure if anyone is still reading this thread; but does anyone know what the charges are for someone in the U.S. who receives an item from UK, sent by RM? Who knows, I might make a sale there one day. :)
 
Make yourself about 13 (imperial) gallons of tea and start here (it's written from the importer's point of view - ie. your purchaser, but should point you in the right direction.

Their regulations can be completely bonkers - I remember as a kid having to eat all the red smarties in the packs I was carrying because the red ones had something in that was banned from being imported into the US.

Oh and in general terms they can be a bit strange about where "overseas" is - a friend of mine sells Lego worldwide and most of the odd comments are from US-based customers wanting to pay dollar for pound (ie. don't understand currencies that aren't US dollars) and not to pay for international shipping because despite the goods being shipped from the UK, the customer can't see that it's an "overseas" purchase because they're not overseas.
 
Thanks Hunny,
I will save the pleasure of perusing the link provided for later, no doubt it will povide as much fun as the EU Cosmetic regulations.
I am confident that my potential customers (being of course the most discerning of buyers :) will have enough nounce to know where England is. If not, I will make allowances, as I am renowned for the degree to which I am geographically challenged...although that's only within England.
 
Well Ive just walked in the door and found the ever worrying grey RM leaflet saying i have a fee to pay. My heart almost stopped when i read it, the only item I am awaiting that can incur a customs charge is from the us for a total of $17:50 including shipping, even if they a the shipping on separately its only $6.. I cant wait to find out what this is about.. the customs charge is £18.18

Its not worth the cost of paying for it..
 
Working backwards from that £18.18....

£8 of it is the RM's charge so £10.18 in VAT & Duty.... Assuming the duty to be nil, the VATable amount for that is £68ish ($115)

So scrawly numbers on the CN22 maybe? If there's an invoice inside you can appeal it, possibly on the spot if your delivery office manager is like mine and interested in customer service... I had one that was declared in HK$ (14 to the £ at the time) and the duty worked out as if it was US$ (1.6 to the £) so had a comically large customs fee payable.
 
The relevant pages on HMRC are here:

<!-- m --><a class="postlink" href="http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageImport_ShowContent&propertyType=document&id=HMCE_CL_000014#P35_3251" onclick="window.open(this.href);return false;">http://customs.hmrc.gov.uk/channelsPort ... 4#P35_3251</a><!-- m -->
<!-- m --><a class="postlink" href="http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_RatesCodesTools" onclick="window.open(this.href);return false;">http://customs.hmrc.gov.uk/channelsPort ... CodesTools</a><!-- m -->

In summary (using the second link to find the appropriate exchange rate), if the total (BEFORE postage) is £18 or less, then no VAT is charged. If it is greater, then VAT is charged on the total (INCLUDING postage).
 
Can someone more in the know confirm.

To get it in customs duty free the goods must be £18 or less or the goods plus the posstage is £18 less?

And there would be no vat charged until it hits a certain figure after that or have i read the HMRC site wrong?7

Worse, it is coming down to £15 later this year.
 
jon_hall said:
Can someone more in the know confirm.

To get it in customs duty free the goods must be £18 or less or the goods plus the posstage is £18 less?

And there would be no vat charged until it hits a certain figure after that or have i read the HMRC site wrong?7

Worse, it is coming down to £15 later this year.

If the goods are under the LVCR threshold (currently £18, dropping to £15) then it gets in... if it's over the LVCR threshold then it risks the VAT on the declared value plus the postage.

The duty free limit is exactly that - duty (not VAT) free.

I have this in writing directly from George Osborne - in reply to a question I put to him, fully not expecting any response whatsoever.
 
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