Thursday, 1 September 2011

Import VAT on gifts received from USA to UK

Yesterday I got an invoice from the post office; well actually it was from Parcel Force stating I was sent a parcel from overseas and that it is subject to pay an import VAT which cost £8.67 and a clearance fee of another £8, total of 16.67. Now I was wondering why I got a customs charge as I did not order anything from abroad! The invoice said that they are going to keep the parcel for 20 days, and then it will be returned to sender. But if paid, which you can only do online, they are going to deliver it the next day.

I have paid for it and today it has been delivered. It was actually a gift for my daughter from my sister in America. I have spoken to my sister and she was wondering why the gift was taxed? Well, here is the thing that every sender should know when sending a gift to the United Kingdom. Your receiving party will pay an import value tax if your declared value of the gift you are sending exceeds £40. I think my sister put in $70 as a declared value so I was charge £8.67 for it. Plus the clearance fee charge of £8 from the Parcel Force, which they say would help cover the cost of additional handling, administration, collection of monies and provision of facilities for customs clearance of packages; these will all be billed to the receiving party. My sister was actually surprised to know that the cost of sending it plus the taxes paid where actually higher than the content of the parcel. Anyway, what’s done is done. But here is some additional information you might want to know about import taxes, I got this from the invoice that came yesterday.

Import Value Thresholds:
For goods moving within EU, import duties do not usually apply. However, for good imported from non-EU countries, customs charges do apply, these may include duty, excise duty and import VAT. Goods with a value of £18(for commercial items including internet/mail order purchases), or £40 in case of gifts between private individuals (plus shipping costs and postage for commercial items).

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