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Anyone who purchases items from overseas territories may find that customs charges have been applied, unexpectedly pushing the cost up. This is not just an issue for commercial importers because, in the internet age, anyone can buy items from sellers in other countries. What are customs fees and why do you have to pay them?
What Can You Expect to Pay For Customs Charges?
When items are sent to you within the UK, the tax that is liable on them should have been charged at the point of purchase. For by the far majority of goods in the country, this means VAT at the rate of 20 per cent. While the UK is a member of the European Union, a single trading bloc, the same rules apply within the country as they do for the entire union. However, if goods are sent to you from outside the EU – or from within it, once the UK leaves – Her Majesty’s Revenues and Customs (HMRC) is allowed to charge you VAT, customs duty and excise duty according to the class of the item and its value.
Repeated failures can lead to investigation and even prosecution. Therefore, it is important to know the rules on customs duty to minimise your overall charges. Currently, HMRC states that the following charges apply:
|Value and Class of Goods||Duty That HMRC May Apply|
|Any items under £135||No fee|
|Personal gifts worth £135 to £630||2.5 per cent on most classes of goods|
|Personal gifts worth more than £630||Variable fees apply|
|Non-gifts worth more than £135||Variable fees apply|
As you can see, there are no simple answers to the questions of duty and getting it wrong can land you with additional customs charges. Although HMRC has a helpline to assist you with making the right declarations on imports, this is also fraught with technicalities.
As such, it is often better to have your items shipped from overseas with your own operator rather than relying on the supplier who may have no interest in making sure their paperwork conforms to the demands of the UK’s customs authorities. By filling out our easy-to-use online form, you can obtain multiple obligation-free quotations from removals firms and shippers with international experience who will guide you through the entire process.
What Is The Difference Between Excise Duty And VAT?
Firstly, excise duty only relates to certain types of goods, such as tobacco-based products, fuel, beer, wine, spirits and cider. Secondly, VAT should only be charged by HMRC for items that are considered subject to that form of sales tax in the UK.
Crucially VAT is worked out not from the sales value of the goods that have been sent but also their postage and packaging costs and after excise duty has been applied. This means that the cost of an item sent from outside from abroad can significantly rise over and above the price you had expected to pay, especially if the supplier charges a great deal for shipment.
Together, excise duty and VAT is often referred to as customs duty. If your supplier has sent items to you with inaccurate paperwork or you fail to declare imports correctly, then you can face customs charges, too. This may be because HMRC levies and an administration fee to sort out an incorrect declaration, for example.
Can You Query Customs Charges With HMRC?
Clearly, not every decision made by HMRC is correct and they can be challenged. All sorts of problems can occur when an item is checked by customs when it enters the country. If HMRC thinks that your goods are banned in the country, then they could be seized and even destroyed. If the authorities think that you have not paid enough duty, then they may be held at the airport or seaport concerned.
Although there is not always a charge that is applied for keeping goods in storage for you, they certainly can be. Anything that is bulky or perishable, for example, often requires specialised storage facilities in order to keep them in good condition. If your shipment is held in such a facility then you won’t just have to pay the duty HMRC says is pending but there will also be an administrative fee to settle to release the goods plus a charge that is levied for keeping them for you.
Helpfully, you can query charges that have been levied if you think there has been an error. Sometimes, goods can be considered in more than one class of items which may – or may not – mean they are subject to VAT, depending on your point of view. Equally, you may wish to return faulty or incorrect items, in which case you might want to claim back the duty you have been charged. Finally, if you have paid duty but believe you have paid too much, then HMRC is duty bound to hear your case, even if it does not find in your favour. Fill out HMRC’s relevant form in such circumstances. The correct one for courier shipments is C285 which can be found on the government’s website.
How to Avoid Customs Fees In the First Place
Most customs fees apply because the paperwork that goes with shipments is inaccurate. If you only rely on the seller of your goods to provide the relevant documentation, then it is you – the buyer – who can end up having to settle more charges when the delivery crosses the UK’s borders. Ideally, you will be able to check that the sender completes the correct customs declaration form before they send the goods but this is often impractical given the way international web-based commerce works these days. There could be language barriers to overcome, too.
Unless you fill out the relevant customs declaration yourself – something that can cause significant delays to your goods arriving – it is better to organise your own shipment. Not only can this be cheaper than relying on the seller’s courier but it puts you in control of the customs declaration paperwork. Many UK-based couriers and removal companies have the right sort of know-how with international removal shipments to help ensure you get your goods in a timely fashion and without excessive charges being applied because of earlier errors.
Can Multiple Gifts Be Sent In One Shipment?
As previously mentioned, you don’t have to pay customs duty on personal gifts worth less than £135. However, what would happen if you bought three of the same items, each worth £50, for example? The total value of the order would, therefore, be £150 putting it over the limit and subject to customs duty, right? However, so long as each gift is individually packaged within the shipment and they are genuinely destined for different people once they arrive in the country, then they can be counted as individual presents meaning they fall under the threshold.
It is worth knowing that moving companies cannot use this rule to get around charges. Only individuals are allowed to count imports as gifts. Bear in mind that this means items for personal use only, so you may have to write a covering letter in your customs declaration if your gift could also be thought of as something that has an industrial use or that could be resold.
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