Understanding Customs Duty Without Jargon.

Jonothon

Hey,

I need to buy some items from Israel. I did this last year and was charged tax as the goods were close to £300.00 which makes sense.

This time, the total I need to pay is £264.61 (with P+P). But this time, I'm splitting this order into two as some items I need for September and some for December.

The first order (to be placed this month) will amount to £123.23 (with P+P).
The second order (To be placed in Oct) will amount to £131.39 (with P+P).

I have been looking on the Gov customs website (https://www.gov.uk/goods-sent-from-abroad/tax-and-duty) and it's full of jargon to me.

firstly, it states: "VAT is charged on all goods (except for gifts worth £39 or less) sent from: outside the UK to Great Britain outside the UK and the EU to Northern Ireland."

Secondly, it states "Goods worth £135 or less in total If you bought the goods yourself and they are not excise goods, the seller will have included VAT in the total you paid. You will need to pay VAT to the delivery company if the goods are: gifts sent to you by someone else and worth more than £39 excise goods"
(my goods are not excise goods.)

Thirdly, it states: "Customs Duty You’ll be charged Customs Duty on all goods sent from outside the UK (or the UK and the EU if you’re in Northern Ireland) if they’re either:  excise goods worth more than £135.00."

Finally, it states "Non-excise goods worth £135 or less:  No charge."

To me, this is to mean that if the goods are worth £39.00 or more, I will pay the VAT; and if the goods are under £135.00...I don't pay VAT. What is actually going on?

Will I be paying any VAT/duty or not?
Any definitive answers will be deeply appreciated.

–Jono.

DullGreyGuy

If the total package is under £135 the merchant is supposed to charge you UK VAT at point of sale and then there is nothing to pay when the goods enter the UK.

If the total package is over £135 then you most likely will have VAT and Customs Duty to pay (depending what's in the parcel) and potential Excise Duty (again depending on what's in it but mainly things like alcohol or tobacco) when the parcel lands plus a clearing fee from the courier.

Big international companies are now doing this so when you look at your shopping cart you'll see the local VAT being removed and the UK VAT added for small orders. Some will do the taxes up front no matter the value and so saves you paying the clearing fee.  Similarly if you buy from a market place like Amazon then the Market Place has to deal with VAT for you. 

Does every small retailer in the world know what they are supposed to do? Unlikely. What are HMRC/Border Force doing about it? It's unclear as declarations haven't changed. Personally not ordered enough from overseas recently to know if HMRC do catch parcels under £135 that haven't had taxes paid (can't see how they would).

So as always, to be safe budget for VAT and handling fee on top of what you pay but be happy if you aren't charged it

martindow

Is there any indication on the invoices you have been sent whether UK VAT is included?  As DullDullGrey says that is possible if it is a large company exporting a lot and very unlikely for a small company or individual who will not be set up to do this.

VAT is certainly due on both shipments and the carrier will add a clearance fee.  Whether it slips through or not depends on who is the carrier.  If it is sent from an Israeli PO and delivered by Royal Mail it could slip through uncharged.  Companies like UPS or Fedex almost certainly will impose the correct charges sometimes invoicing after delivery and sometimes asking for payment up front.

It might be worth considering combining your orders to avoid the second clearance fee. You are likely to be charged around £25 VAT per parcel (20% of the shipment value and postage) plus around £10 clearance.    Assume you will need to pay and take it as a bonus if no bill is raised.

superbigal

Unless it is clear you have already paid UK VAT then it is safe to say you MAY be subject to 20% Import VAT before delivery, plus a handling fee. You also may be due a small percentage of Import Duty depending on what you are buying and the UKs trade deal with Israel. Use that as a worst case scenario.
Many sellers simply declare goods at a lower value or as a gift. I even have sellers doing this when i expressly do not want them to, due to being able to claim Import VAT back as a company.

DullGreyGuy

superbigal said:
You also may be due a small percentage of Import Duty depending on what you are buying and the UKs trade deal with Israel.

There is no import duty on parcels under £135 unless there is Excise Duty (ie alcohol, tobacco etc)