Import VAT on gifts

james_dean1986

Our friends in Canada sent us a Christmas hamper including some food, drink and two hats and a stuffed teddy bear.
Everything was declared and the total hamper was worth around £55.
I had a letter from Parcelforce saying it will cost us £41 to receive the item. (27.50 in VAT and 13.50 handling fee)
Given the parcel was only worth £55 this charge seemed rather steep - but I paid it.
I understand if a gift is below £34 its not chargeable, but if its over £34 is the full amount chargeable or just the surplus? So in my case I would have expected to only pay VAT on around £20 worth of goods.

To make it worse we sent a parcel to them for around the same value, again declared everything, and it only cost them around £1 in duties.

vuvuzela

james_dean1986 wrote: »

Our friends in Canada sent us a Christmas hamper including some food, drink and two hats and a stuffed teddy bear.
Everything was declared and the total hamper was worth around £55.
I had a letter from Parcelforce saying it will cost us £41 to receive the item. (27.50 in VAT and 13.50 handling fee)
Given the parcel was only worth £55 this charge seemed rather steep - but I paid it.
I understand if a gift is below £34 its not chargeable, but if its over £34 is the full amount chargeable or just the surplus? So in my case I would have expected to only pay VAT on around £20 worth of goods.

To make it worse we sent a parcel to them for around the same value, again declared everything, and it only cost them around £1 in duties.

Full amount (including postage) is chargeable if over the gift limit. So I guess that the postage cost quite a bit too...

marliepanda

Canadian limits are much higher. Just the way of the world.

£27.50 means they must think the parcel is worth £140, did it cost nearly £90 to post? I know Canadian shipping is a tonne but that seems a lot, even with wine and food.

unholyangel

marliepanda wrote: »

Canadian limits are much higher. Just the way of the world.

£27.50 means they must think the parcel is worth £140, did it cost nearly £90 to post? I know Canadian shipping is a tonne but that seems a lot, even with wine and food.

In my experience, customs have a habit of taking the foreign currency and putting it as £ even when its clearly marked as $ - at least with USD or AUD, Wondering if that has perhaps happened here. £1 is around $2 CAD so $140 would be £70 - which is more fitting with the £55 the OP has said the gift cost & postage.

marliepanda

unholyangel wrote: »

In my experience, customs have a habit of taking the foreign currency and putting it as £ even when its clearly marked as $ - at least with USD or AUD, Wondering if that has perhaps happened here. £1 is around $2 CAD so $140 would be £70 - which is more fitting with the £55 the OP has said the gift cost & postage.

I would usually agree (as Im currently panicking as I have a parcel costing 15500 Yen on the way...) but I cant see a parcel of that size and weight, especially when they mention drink, only costing £15 to post from Canada. I've spent £70 on large parcels coming from America so I can see £90 from Canada.

shaun_from_Africa

marliepanda wrote: »

£27.50 means they must think the parcel is worth £140, did it cost nearly £90 to post? I know Canadian shipping is a tonne but that seems a lot, even with wine and food.

If any of the drinks included with the hamper were alcoholic then there will also be excise duty to pay as well as VAT. If there were any spirits then the duty rate is round about £14 for a 1 litre bottle and Champagne (or other sparkling wine) is about £3.50 a bottle.

marliepanda

shaun_from_Africa wrote: »

If any of the drinks included with the hamper were alcoholic then there will also be excise duty to pay as well as VAT. If there were any spirits then the duty rate is round about £14 for a 1 litre bottle and Champagne (or other sparkling wine) is about £3.50 a bottle.

Didn't realise that! Well that could be some of it too.

Keep_pedalling

if they want to send you a hamper next year get them to order one on line from a UK seller, it will be far cheaper.

james_dean1986

Thanks everyone. It appears its worth me raising the issue with them.
The value in Canadian was $110, which is where I got the £55
I never send international parcels so it really baffles me that they can tax a shipping service from another country.
Does sound like they have charged me for the value in Canadian dollars even though its clearly highlighted.
There was a bottle of Ice Wine (500ml - 12%) but that was the only alcohol.

marliepanda

james_dean1986 wrote: »

Thanks everyone. It appears its worth me raising the issue with them.
The value in Canadian was $110, which is where I got the £55
I never send international parcels so it really baffles me that they can tax a shipping service from another country.
Does sound like they have charged me for the value in Canadian dollars even though its clearly highlighted.
There was a bottle of Ice Wine (500ml - 12%) but that was the only alcohol.

How much did shipping cost?

It does make sense to tax the shipping as that's part of the price. If something is available for £50 in the UK but at £20 in the US plus £20 shipping then people will think 'oh I'll save £10 and order it from the US.
Most people consider the shipping cost as part of the cost of them item, especially overseas, and that's how HMRC take the view. Obviously with gifts it's different but again, that's just how it works.

james_dean1986

Ouch. It says postage rate is $172. I hope that's including the items otherwise £85 for postage is rather pricey