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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 )
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! )
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).
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 )
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! )
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).