Tuesday, 19 January 2010

Letter From America - And How UK Customs Charge You To Receive a Gift

I had a nasty shock recently, courtesy of Her Majesty's Revenue & Customs.

A very kind friend in the United States had sent me a beautiful gift - an Alaskan Ulu and chopping board.



It really is the most wonderfully crafted piece of kit and Ruf absolutely adores it. My friend carefully chose the handle to be made from Alaskan wood, rather than the normal bone so it is completely vegan friendly.

I have had an enormous amount of vicarious pleasure watching Ruf contentedly chopping up all the garlic, herbs and vegetables that he likes to mix together to provide me with the most amazing vegan sustenance.

It was the perfect gift. Thank you, Michael x

But, back to the Customs problem. I knew that the parcel had arrived in the UK, because I got a letter from a courier service stating that they were holding an international parcel on my behalf, but that they would not deliver it until various charges had been paid.

These were detailed as VAT (that's value added tax) at £13.88 plus a Customs clearance fee levied by the courier company of £8.

On researching this further, I discovered that this is not a new thing, it has been going on for some time, although I had been unaware of it.

Basically, for anyone else sending gifts to the UK from outside the European Union, the facts are these:

Any goods imported into the UK over the value of £18 are liable to import VAT; gifts between private individuals over the value of £40 are also liable for VAT. Goods and gifts over these values may also be liable for Customs duty. As of the 1st of December 2008 you will no longer be required to pay customs duty for goods up to the value of £135, however you will still be required to pay import VAT and excise duty where applicable.

Customs duty is a tax charged on goods produced outside the EU. It is controlled by HM Revenue & Customs. The purpose of Duty is to keep competition equal and fair and to bring the cost of imported goods up to the same cost as those produced within the EU. Once duty is paid, the goods are in 'free circulation' and can move throughout the EU without restriction.

Certain goods such as wines, spirits, cigars, cigarettes and tobacco are subject to what is called excise duty. When you buy excisable goods in the UK the price you pay includes this tax. However, if you import these goods either from the EU or from outside the EU, you will have to pay Excise Duty and VAT on them. The Excise Duty is often more than the cost of the goods, and private consumers buying excisable goods over the Internet should be extremely careful as there are different regulations governing the purchase of these goods on the Internet.

Value Added Tax (VAT) is a tax normally charged on the supply of goods (and services) made by a VAT registered business. However, imported goods are also subject to VAT. This is to prevent a purchaser gaining an unfair advantage by buying non-EU goods VAT free..

Gifts sent as parcels from the US are examined by Customs officials there and can be sent to the UK free of Duty and VAT only if they comply with these rules:

* The value of the goods must not exceed £36 (approximately $72).
* Packages must be correctly declared.
* They must have been sent by a private person abroad to another private person in Britain.
* The gift must be for the use of either yourself or your family.
* There is no commercial or trade element.
* Any alcohol, tobacco products, perfumes or toilet waters are within the Customs allowances and costs (see above).
* They must be of an occasional nature only, such as a birthday or anniversary.

It is possible for the sender to pay these charges in advance or in retrospect but no parcel will be released, unless the fees have been paid.

Unpaid parcels, resulting from disputes about Customs charges, cannot be delivered and will be returned to sender if they have been held at the depot for more than 20 days.

Naturally, because of the holiday period, I paid up promptly and the parcel arrived the following morning.

I suppose I should think positively because I believe VAT went up at the beginning of this year, so it could have been even more, but it just seemed very wrong that a gift could incur these charges; something that was not going to be sold on or used for commercial gain.

You have been warned!



I just had to post this, since it really made me laugh... and the original Proclaimers' video has had embedding disabled by request.

5 comments:

Ro said...

I suppose the only good news, really, is that this particular gift was something you were both pleased to receive. Can you imagine how peeved you'd be if it had turned out to be something destined for the next charity shop?

Not that I get many things coming in from overseas nowadays, but I always over-estimate how much extra I'm going to get thumped by Her Majesty's Revenue & Customs. That means it comes as no great shock when I get the bill, and it's always a nice surprise when I end up paying out less than I'd expected :-)

Brian said...

You got off lightly. Here in Canada I paid $60, to receive my birthday present that customs Canada decided was valued at $130. My sister had written on the customs doc that it had $0 value and that it was a gift.
$130 was a gross over valuation, I don't think they even opened the package to inspect.
One of the tops was too big too even fit me! I have since told my sister to discourage my parents from sending gifts and if they do to not value them above $30 as that is the limit here.

And then there were the thieving b*stards in either the US postal service, customs Canada or Canada post who stole the $us180 cash that a friend sent to me from the US as payment for some concert tickets I gave him....

Brian said...

You got off lightly. Here in Canada I paid $60, to receive my birthday present that customs Canada decided was valued at $130. My sister had written on the customs doc that it had $0 value and that it was a gift.
$130 was a gross over valuation, I don't think they even opened the package to inspect.
One of the tops was too big too even fit me! I have since told my sister to discourage my parents from sending gifts and if they do to not value them above $30 as that is the limit here.

And then there were the thieving b*stards in either the US postal service, customs Canada or Canada post who stole the $us180 cash that a friend sent to me from the US as payment for some concert tickets I gave him....

nitebyrd said...

That's outrageous! I do appreciate the information, though because I ship things to the UK now and then. I wasn't aware of this "tax".

Joanna Cake said...

Ro - I like your attitude :)

Brian - Scandalous! Mind you, I never send cash through the post these days. A friend of mine wraps it in tin foil to disguise it but I just dont think it's worth it. Far better to transfer the cash online or send a cheque or that old favourite the postal order. Funny, I used to get those for birthdays when I was a child. It was always very exciting and I always thought they were called poster lorders :)

I didnt realise that it applied to gifts going into other countries as well.

Nitebyrd - It says on the form how to pay the tax in advance so there is no delay on the parcel at the UK end whilst they write to the recipient and then wait to receive payment before delivery. If you're on a tight schedule for a birthday, that could prove important.