Import VAT on a gift when sender put down wrong value.

Verdana

Thanks izzy, I had debated with myself and unsuccessfully with the other half about whether I should just let them send it back to her. I had suspected it might be futile appealing to HMRC. It's just that the guy at the sorting office said I could try that, but I think he is just saying that so I could pay up and the rest is not his problem.

unholyangel

Had something similar before. Bought goods that were reduced, amount paid was less than thresh but retailer put RRP on it - meaning I had to pay as much in vat/handling fees as I did for the item itself.

Paid it as was told I would have it refunded. What they didnt tell me is the handling fee is non refundable. Understandable perhaps but if i had known that, I wouldve just refused delivery as item wasnt worth full RRP.

If they still have same procedure, you'll need packaging it arrived in, along with receipts to prove value.

Hintza

VAT is chargeable on the total price paid plus postage.

If your friend was exporting from Australia then they could have possibly claimed the GST back (if that is allowed in Australia) it is irrelevant to your case.

Verdana

To Hintza, this is from HMRC or am I reading it wrong?

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_PublicNoticesAndInfoSheets&propertyType=document&columns=1&id=HMCE_CL_000014#P130_14404

Value Added Tax (VAT) - Import VAT is charged at the same rate that applies to similar goods sold in the UK and applies to commercial goods over £15 in value, and on gifts that are over £40 in value. However, please note that commercial consignments sent to the UK from the Channel Islands do not benefit from any relief of import VAT. The value of the goods for import VAT is based on the:

• basic value of goods, plus
• postage, packing and insurance, plus
• any import (Customs or Excise) duties charged.

As with customs duty, the cost of postage is excluded from the calculation for VAT on gifts except where the sender has used the Express Mail Service (EMS) as opposed to a standard mail service.

Verdana

That's helpful to know that the 8 pounds can't be clawed back. I guess they already went through the process and incurred expensese/time, even if I can prove that import VAT can be waived.

Now I am in the process of asking her what exactly is in the box, exact value of everything and hence if my appeal is valid (along with the faff in getting the receipts), and whether it can wait to be given to me in person later on in the year when another Aussie relative visits. Still it isn't nice to send it back and let her waste her postage in the first place but I don't want to be stung with something I can't quite afford to pay for at the moment, for something I hadn't asked for.

unholyangel wrote: »

Had something similar before. Bought goods that were reduced, amount paid was less than thresh but retailer put RRP on it - meaning I had to pay as much in vat/handling fees as I did for the item itself.

Paid it as was told I would have it refunded. What they didnt tell me is the handling fee is non refundable. Understandable perhaps but if i had known that, I wouldve just refused delivery as item wasnt worth full RRP.

If they still have same procedure, you'll need packaging it arrived in, along with receipts to prove value.

HappyMJ

I'd let the post office send it back.

Hintza

OK then so the goods are valued at $65 which equates to £41.75 which is still over the limit.

So you are going to have to pay a minimum of £16.35 if you win your argument versus the £20.98 that they are charging you.

To save yourself £4 you are going to have a lot of forms to fill in and evidence to gather.

Oh and remember HMRC use am exchange rate that only changes infrequently (quarterly or monthly)

bazzyb

Verdana wrote: »

That's helpful to know that the 8 pounds can't be clawed back. I guess they already went through the process and incurred expensese/time, even if I can prove that import VAT can be waived.

If the VAT/import duty is refunded in full, RM will refund the £8 if you can provide them evidence of this. If the VAT is reduced and you only receive a partial refund, the £8 charge will stand.

Guardsman

The way I would look at it is that I was getting a bargain I would pay the £20.98 for goods that are worth far more.

unholyangel

bazzyb wrote: »

If the VAT/import duty is refunded in full, RM will refund the £8 if you can provide them evidence of this. If the VAT is reduced and you only receive a partial refund, the £8 charge will stand.

I received a full refund........still wasnt entitled to a refund of the £8 they said because they'd still handled the parcel etc (which as i said above, is fair enough....just wish they'd told me that prior to paying).