British shoppers who buy from overseas websites are being reminded of the need to factor import duties and VAT into internet prices. New Government figures reveal that a rapidly-growing number of shoppers face these added costs only when parcels arrive from abroad.
"Many people often don't realise that they have to pay charges on purchases delivered from overseas," said Customs Anti-Smuggling Manager Phil Colclough yesterday.
Customs duty is payable if the amount of duty is £7 or above; and VAT is payable if the value of the goods is £18 or above. These must be paid whether the goods are new or used, purchased by you or a gift from another; and whether they are for your private use or for sale.
Charges are raised at the Customs Postal Depot where the goods are imported and the Customs charge levied will depend on the type of goods imported.
The duties vary in sometimes baffling ways. For instance, all cameras attract VAT; but digital cameras are duty free, while a camcorder attracts duty at up to 14% and a film camera attracts duty at 4.9%. A laptop is duty free; but a PDA attracts 3.7% duty. And duty on a plasma or LCD screen is 14% if you can use it to watch TV, but duty free if it only takes a computer signal.
In recent years, Customs officers have seen a dramatic rise in the number of packages on which Customs duty and import VAT is due. Figures published yesterday reveal the number of parcels received at Coventry International Hub on which duties have been charged. For the year ended 31st March 2003, the number of parcels charged was 269,703 – up 26% on 2002. The figure jumped another 24% in 2004; and again by 29% in the year ended 31st March 2005, representing a total of 434,349 parcels with a price tag.
HMCE says this reflects increasing levels of internet shopping – particularly from suppliers in the US – and has led to complaints from the public, who are either unaware of the VAT and duty implications of internet purchases costing more than £18, or mistakenly assume that the £145 'passenger's allowance' applies.
People are often unaware that although the foreign sender may have completed the customs declaration form on the parcel, the buyer is regarded as the importer of the goods. If anyone purchases goods online and the declaration is found to be false or misleading they may be liable to financial penalties or criminal prosecution and the goods themselves will be liable to forfeiture.
Customs duty is not payable on goods bought from countries within the EU. However, VAT may be payable either in the EU country of purchase, or in the UK if the EU supplier is UK VAT registered. In addition, special rules apply to excise goods such as cigarettes, tobacco and alcohol.
Reader Kevin Acton writes, 04/02/2008: It should also be noted that UK postal services will charge a handling fee for collecting any revenue due on postal imports. This equated to £8.00 of the stated £22.50 due in import VAT on Footware to the value of £73.46 inclusive of postal and insurance charges.
