Buying goods from abroad - import taxes and VAT
Article checked and updated Feb 2007
Marilyn Beardsmore takes a look at importing goods from Abroad
Note that this article is intended for UK consumers.
If you are interested in importing and exporting goods for trade then you might find the Customs & Excise website more useful.
Are you liable for duty on goods sent from EU countries?
You are not liable for import duty or VAT, but excise duty must be paid on certain goods, principally alcohol and tobacco.
Are you liable for duty on goods sent from non-EU countries?
If you buy goods from non-EU countries, you may be liable to pay
• import (customs) duty (rates vary)• VAT (at 17.5%)
• a handling charge payable to the courier (this could be consignia or anther courier).
• Excise duty is also due on alcohol and tobacco products.
VAT and import duty is due whether you purchase the goods or they are a gift, whether they are new or used, or whether they are for private use or for resale.
The good news is, if your purchased goods have a value of £18 or less, excluding shipping costs, then no charges are payable.
No duty is payable on gifts that have a value of £36 or less. To qualify as a gift, the item has to be sent from a private person and must be for your own use.
Notice that there are special rules that apply to alcohol, tobacco products, perfume and toilet waters. For more information on this, follow the link for notice 143 given below.
What is the import duty?
Typically the duty is anywhere between 2% - 8%, but it can be less or it can be much higher. The rate depends on the type of goods and the country of origin. All goods are classified into certain categories and are assigned a code. (There are approximately 14 thousand codes and these are held in 3 volumes called the Binding Tariff Information). The rate, (which is subject to revision at any time) is then determined by the code + the country of origin.
How do I find the rate of import duty?
The European Commission maintains a website called Europa where you can perform a TARIC Textual Search
(See example of how this works)
If this causes you to give up in despair, you can always call the Tariff Classification Service (01702 366077) who will give you a code, although they do say give them a ring after all other avenues have failed!! There is a pdf file available that gives a list of codes for the most popular products. You can get it here: Classification of Popular Products You can then get a rate for your goods by calling the National Advice Service (N.A.S.) on 0845 010 9000 and giving them the code and country of origin.
How is it all calculated?
Firstly, the sender must attach a Customs Declaration to the goods. This gives details of what the goods are and their value.
Having found out the rate of import duty, you can calculate how much your goods are actually going to cost you. In this example I have chosen goods costing £100 with a £10 shipping charge. This is the amount you pay to the site (or shop) where you bought the goods. I have chosen to use an import duty rate of 6.5%
| Cost of goods + shipping | £110.00 | |
| Import tax @ say 6.5% | £7.15 | £7.15 |
| VAT on £117.15 @ 17.5% | £20.50 | £20.50 |
| Handling charge to the post office, say ~ £4.00 | £4.00 | £4.00 |
| Total cost of goods | £141.65 | |
Total additional cost |
£31.65 |
The charge levied by Consignia is for handling, (collecting the tax and administration) and this is usually £4 - £8.
To summarize this example: you pay the company you bought the goods from £110.00, and you then pay the post office an additional charge of £31.65 when the parcel is delivered.
Taric Search
In the description box put in the type of goods you want to import. You will get a general list and you must choose a specific type of goods. This will give you the code for your goods. You can then enter the code in the code box and, after having entered the country of origin, hopefully (!) this will give you the rate of import duty due.
Here is an example of buying a cotton dress from Pakistan:
1. Go to the Taric Home page
2. Click on Taric description
3. Enter 'clothing' in the goods description box
4. A list of product types comes up. Scroll down to code 6217000000 and click on this. Scroll down to 6204, click on this. Click on code 620441. Another list! The dress is cotton, so I choose 620442. I decide the best description is 6204 42 00 90, so I click on this and a new window opens where I can put in the country of origin. Use the scroll button to find Pakistan. Click duty rates. The duty is 10%.
Eu Member States
Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Irish Republic, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and The United Kingdom
The Special Territories of the Community are subject to VAT but not customs duty. They are:
• The Aland Islands (Finland);
• The Canary Islands (Spain);
• The Channel Islands;
• The French Overseas Departments of Guadeloupe, French Guiana, Martinique and Reunion; and
• Mount Athos - also known as Agion Poros (Greece
More information about the EU.
Notice that although Turkey is not part of the EU, "the EC and Turkey established a Customs Union on 1 january 1996. As a result many products coming from Turkey no longer attract Customs Duty although VAT and Excise Duty still apply".
Notice 143 - a guide for international post users
Note on buying goods from the Channel Islands
A number of internet retailers trade from the Channel Islands, for example many leading DVD/CD/Games retailers. As the Channel Islands are one of the Special Territories mentioned above, companies based here do not have to charge VAT. The problem for the UK consumer though is that if you import goods over the value of £18, then technically you are liable to pay Customs and Excise the VAT on those goods. However, many Channel Island based retailers actually take care of the VAT, themselves, on goods over £18, so that the price you see is the price you pay. What we have noticed that if you buy a number of small items from the Channel Islands, the retailer will usually split the order so that each parcel is less than £18 anyway:-)!
We are currently trying to establish the position with regard to all such retailers listed on Easytorecall. Please see each individual review for details.
Please also note that, contrary to popular belief, there is no import duty due on goods from the Channel Islands.
Digital Downloads
Companies from non-Eu countries selling to customers in EU countries are obliged to add VAT to all digital goods such as software, music and games. The rate of VAT charged depends on which EU country the buyer resides in - so UK buyers will be charged VAT at the normal rate of 17.5%. Note there is no import duty to pay.
More information from Customs & Excise
Travel Allowances
If you are intending to travel abroad and bring back goods yourself, different restrictions apply and generally the amount you can bring in without having to pay duty is much higher. It also depends on whether you are bringing goods in from outside the EU or from within the EU. The Inland Revenue has Information for Travellers where you can find out the latest restrictions and limits. You can also download the information in a pdf document for easy reference.
Further Reading and Information
National Advice Service - 0845 010 9000
The National Advice Service is available from Monday to Friday, 8.00am to 8.00pm, and will be able to answer any general queries you may have.
• Notice 143 - a guide for international post users
• Customs & Excise - web page 'Classifying your goods - Frequently Asked Questions'
• Customs & Excise - web page 'The Tariff '
• Customs & Excise - web page 'Classifying Your Goods"
• TARIC Textual Search - on the Europa site: Notice that 'the Commission accepts no responsibility or liability whatsoever with regard to the information on this site'!
• Binding Tariff Information (customs & excuse) A BTI is a written tariff classification decision, given on request, which is legally binding on all customs administrations within the European Community for up to 6 years from the date of issue.
• www.hmce.gov.uk - buying tobacco on the internet
• www.forestonline.org - buying tobacco on the internet advice from FOREST
• www.jointaction.com - Interesting information regarding the position of importers whose goods are suspected of being counterfeit. Joint Action is a discussion forum regarding the activites, nefarious or otherwise, of large public and private sector organisations.
Note
You may have read other articles online that state that the £18 cut-off is including shipping charges. However, the following is taken directly from the Customs and Excise website:
"EC agreements allow relief from charges on ... imported goods if they...have an intrinsic value of £18 or less although this particular relief does not include alcohol, tobacco products, perfume or toilet waters which are covered in paragraph 3.4. The intrinsic value is the actual value of the goods excluding postage, packing and other miscellaneous costs"
Related Easytorecall Articles
• Consumer Rights & the Net
• Guide to Internet Shopping
• Returning Goods
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