Customs duty - help

Agent_C

I recently ordered some items from the US with a total value of $50 - about £25. I thought I wouldn't be charged customs duty as 17.5% of £25 comes to less than £7, and the HMRC website says that duty of less than £7 is waived.

However I recently received an invoice from FedEx for £11.70 VAT plus a £4.50 admin charge - totalling over half the value of the goods - a bit steep!

I have called FedEX and they are looking into it but wondered if anyone could shed some more light.

FedEX seemed to be saying that they charged tax on the total amount, which included a $22 shipping charge. Is this correct? The HMRC just mentions 'goods', and shipping can't be defined as goods, surely?

julbags

Unfortunately the shipping is included when working out the cost of the goods. I've been caught with this in the past.

You may also be liable for import duty as well as VAT at 17.5%. When I brought bicycle parts in from the US I got charge VAT plus 4% import duty, plus a fed ex import charge worked out on the goods plus shipping. It was still much cheaper than buying in the UK but it is something to bear in mind especially if things are sent through a courier such as FedEx as they present things to customs automatically.

Agent_C

Thanks - these were items I couldn't get in the UK so I can't compare how much I'd have saved, but the charge seems prohibitively steep, even with the weak dollar!

JohalaReewi

The official verdict is here...

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageTravel_ShowContent&propertyType=document&resetCT=true&id=HMCE_CL_001454

I think you may have confused the 17.5% VAT with customs duty. As you can see, the two are separate. Customs duty under £7 is waived but VAT is always chargable on items over £18 in value (inlcuding shipping, insurance etc.).

So your item $50 plus shipping $22 is about £40 so the VAT would be £7. However, there may have been other charges or possibly some customs duty (more than £7) which would push the total up.