Import VAT

peanutgalleria

Hello, was wondering if any brighter minds than mine could offer advice. I regularly order goods from South Korea to Northern Ireland and have generally managed to keep the cost of goods below £135. This has meant that I haven’t been charged import VAT. This has been the case for upwards of 40+ parcels from a few different retailers. 

This week however, I ordered from a new retailer who has declared the value as the cost of the items + the cost of shipping which has resulted in two hefty VAT bills for me as shipping alone is £50-£70. I queried this with HMRC and they are saying the value which customs uses to determine whether duty/VAT is owed is INCLUSIVE of shipping but on the gov.uk website it says “

Goods that are outside the UK at the point of sale

The seller must work out the consignment value of the goods by deciding their ‘intrinsic value’, this is the price the goods were sold for, not including:

• any transport or insurance costs, unless they are included in the price and not separately shown on the invoice
• any other identifiable taxes and charges”

I am incredibly confused at this point. The government website seems to say transport costs are not included in the intrinsic value - and that has been the case for all parcels I have ordered up until now but the fact that I have received the two bills for my most recent orders and the phone call with HMRC have confused me as it all seems to be conflicting information. Can anyone shed any light on this as I would like to avoid further charges? Thanks

DullGreyGuy

https://www.gov.uk/guidance/vat-and-overseas-goods-sold-directly-to-customers-in-the-uk 

According to the above link the £135 seller pays the VAT rule only applies to GB and not NI. In NI you should have been paying UK VAT on import on all the parcels. 

It is correct that VAT is calculated on the total landed cost of the goods, this includes the value of the goods themselves, P&P and any other importation costs like Customs Duty or Excise Duty

peanutgalleria

DullGreyGuy said:

According to the above link the £135 seller pays the VAT rule only applies to GB and not NI. In NI you should have been paying UK VAT on import on all the parcels. 

It is correct that VAT is calculated on the total landed cost of the goods, this includes the value of the goods themselves, P&P and any other importation costs like Customs Duty or Excise Duty

Thanks! Was holding out home that the limit wasn’t ridiculously low but alas…the joys of living in NI strike again

MattMattMattUK

peanutgalleria said:

DullGreyGuy said:

According to the above link the £135 seller pays the VAT rule only applies to GB and not NI. In NI you should have been paying UK VAT on import on all the parcels. 

It is correct that VAT is calculated on the total landed cost of the goods, this includes the value of the goods themselves, P&P and any other importation costs like Customs Duty or Excise Duty

Thanks! Was holding out home that the limit wasn’t ridiculously low but alas…the joys of living in NI strike again

It would be the same for someone in England, Wales or Scotland importing from South Korea as well, VAT is charge on the sum of the costs as Grey explains. 

peanutgalleria

MattMattMattUK said:

peanutgalleria said:

DullGreyGuy said:

According to the above link the £135 seller pays the VAT rule only applies to GB and not NI. In NI you should have been paying UK VAT on import on all the parcels. 

It is correct that VAT is calculated on the total landed cost of the goods, this includes the value of the goods themselves, P&P and any other importation costs like Customs Duty or Excise Duty

Thanks! Was holding out home that the limit wasn’t ridiculously low but alas…the joys of living in NI strike again

It would be the same for someone in England, Wales or Scotland importing from South Korea as well, VAT is charge on the sum of the costs as Grey explains. 

Yeah it just seems that one is charged at the point of sale and one is charged at the point of import. It’s a lot easier for me if it’s charged at the point of sale but hey ho

DullGreyGuy

peanutgalleria said:

MattMattMattUK said:

peanutgalleria said:

DullGreyGuy said:

According to the above link the £135 seller pays the VAT rule only applies to GB and not NI. In NI you should have been paying UK VAT on import on all the parcels. 

It is correct that VAT is calculated on the total landed cost of the goods, this includes the value of the goods themselves, P&P and any other importation costs like Customs Duty or Excise Duty

Thanks! Was holding out home that the limit wasn’t ridiculously low but alas…the joys of living in NI strike again

It would be the same for someone in England, Wales or Scotland importing from South Korea as well, VAT is charge on the sum of the costs as Grey explains. 

Yeah it just seems that one is charged at the point of sale and one is charged at the point of import. It’s a lot easier for me if it’s charged at the point of sale but hey ho

Sellers have the option of offering a fully landed price no matter what the price of the goods are, though some couriers require business volume to be a minimum amount plus it clearly takes a fair bit of web development to interface with the courier to pull back the taxes to add to the cart. 

In principle it should be cheaper as the handling fee by the courier tends to be less but because the seller wants to avoid FX risks on the taxes they normally bump the price a bit to mitigate the risk

tightauldgit

The declared value of the goods should just be the value of the goods (shouldn't it?) but when you are charged import duties they use the total value including shipping to calculate what's due. Just in case they've based it on the total declared including shipping and then added on shipping again

jnm21

Might be cheaper to get someone you know in GB to order for you & then send on?

I think it is all as clear as mud - the page linked above reverts to UK (no GB/NI distinction) further down the page!

prowla

I think taxes have always been on the sum of goods + shipping.