Buying a bargain from abroad? Make sure you tell the Taxman...

14 November 2011

Christmas shopping 2I know it isn’t even halfway through November yet, but with tinsel and trees already commonplace on the high street, if you haven’t already started thinking about your Christmas shopping, it’s high time you did.

Many people will again be looking for bargains this year, and one way of getting a good deal can sometimes be to buy from abroad, either from overseas stores or even just from eBay*. However, HMRC would like to "remind" everyone not to forget to add on VAT or Customs Duty that will probably be due on such a purchase, after all they wouldn’t want you to “to be faced with unexpected extra charges, when you thought you had found a bargain."

Confused? You see, when you buy outside the EU, the US and China being common places to find cheaper goods, you may have to pay VAT and Customs Duty either when your parcel arrives in the UK or when you collect your suitcase full of Christmas booty from the baggage carousel. These amounts will need to be paid before HMRC will let you have your parcel or let you through the airport.

If you enter the UK by commercial sea or air transport from a non-EU country, you can bring in up to £390 worth of goods for personal use without paying customs duty or VAT, but this is reduced to £270 if you arrive by private plane or pleasure cruise. Above these amounts and up to £630, there is a duty flat rate of 2.5 per cent, although these limits exclude tobacco and alcohol, which have separate allowances, and fuel.

However, if you purchase online, the limits are much lower. Purchases made from outside the EU attract VAT if the value of the package is over £15, and if the goods are over £135 in value, customs duty may also be due, although this will depend on what they are and where they have been sent from. HMRC has approximately 14,000 different classifications for goods subject to customs duty, with average charges of between 5% and 9%, but with the complete range of duty spanning between 0% and 85%.

What about gifts?

Now you may have already purchased some items from abroad and not worried your little head about duty, or even sent stuff abroad as a gift. Because that’s what it is isn’t it, a gift for someone else?

Well, maybe, but the Revenue definition of a gift is one where no money changes hands, so anyone who writes ‘gift’ on the Customs form of a auction package destined for you, or when you do the same for a chap in Argentina, is guilty of tax evasion. That’s the illegal one. True gifts are also only exempted from import VAT if the value is less than £40.

"We know many people like to go abroad at this time to buy their Christmas gifts, or buy online from non-EU countries, and think that the ‘cheaper’ price they see is always the price they finally pay," said Angela Shephard, HMRC's head of customs policy**.

Cigarettes and Alcohol

Beer, wine and fags have always had their own limits, but since we joined the EU, imports from other EU countries are theorectically limitless, provided the goods are for your own use. However, HMRC think it is “likely” you will be “asked questions” if you attempt to bring in more than the following from inside the EU:

- 110 litres of beer,
- 90 litres of wine,
- 10 litres of spirits
- 20 litres of fortified wines,
- 800 cigarettes,
- 200 cigars,
- 400 cigarillos or
- 1kg of tobacco

Bringing in these items from outside the EU, which includes the Channel Islands and the Canary Islands, means much more strict limits.

You can bring in either 1 litre of spirits or strong liqueurs over 22 per cent volume, or 2 litres of fortified wine (such as port or sherry), sparkling wine or any other alcoholic drink that is less than 22 per cent volume

In addition you may also bring back 16 litres of beer and 4 litres of still wine, and one of the following:
- 200 cigarettes
- 100 cigarillos
- 50 cigars
- 250g of tobacco

Good job Christmas is all about giving, goodwill and making merry then eh.

*other auction sites are probably available.

** and fun-spoiling

TOPICS:   Economy   Tax

4 comments

  • Tim
    Also, used / second-hand good 'purchased' online, through ebay, etc, count just the same as any other item. Doesn't matter if it's new or old, if you paid money for it and haven't yet paid VAT in the EU for it, HRMC want their slice if it's over the basic limits. Indeed with gifts, if someone pays for that gift, even if it's not you, the same applies just with slightly higher limit. HMRC are at liberty to judge the value of the item on import and will charge you even if you didn't pay for it initially. If you bought the item in the EU, took it outside and returned with it, then nothing is due. Be prepared to prove it if it looks suspect (receipts). However, when importing by post, it's still down to Royal Mail to be bothered to collect the VAT & duty. If HMRC are pushing them to do this more frequently then it will only slow down the mail, and annoy a lot of people as RM charge a massive amount in handling fees to collect the money (which goes into to RM's pockets). Couriers generally collect automatically, so if you want a chance of someone forgetting to charge you, don't use couriers.
  • heywood j.
    I'm in texas at the moment and will be bringing back the following: 3 new kindles at £50.54 each, toshiba i5 laptop for £164 and as many 2gb sata drives as my second suitcase will allow as they are still £54 each here. All the above at 8% sales tax and that's it. Christ we get ripped off in the UK.
  • dvdj10
    "Bringing in these items from outside the EU, which includes the Channel Islands and the Canary Islands, means much more strict limits." Surely that should be INSIDE the EU?
  • Tim
    @dvdj10 - Are you referring to Channel Islands? If so, the Channel Islands at least are not part of the UK, are self governed, and are outside the EU and EEC. They are British and European citizens however and there are some European protections they enjoy. If you mean the limits, the above quoted are limits for inside the EU which are relatively relaxed, and yes outside the EU, inc Channel Islands, the limits are harsher.

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