"Buying from outside of the EU - a guide for Brits...." Topic

As my parting post before bidding adieu to TMP for a while, this seems a good choice of subject matter. There have been a number of threads recently which indicate people are ignorant of, or at least confused by, the costs of receiving parcels from outside of the EU. These have been exacerbated by recent changes to EU *duty* regulations, which a lot of people mistakenly believe apply to VAT as well – in actual fact the recent changes make zero difference to us. (They increase the minimum threshold for customs duty, but HMRC have always ignored duty on lower value shipments anyway.)

OK, here we go then…. If buying from oustide of the EU, expect to get hit by up to three possible charges when your parcel reaches the UK – VAT, customs duty, and handling charges.

VAT

- This is usually the most significant element of any charges on larger orders. VAT is charged at the standard rate (ie. currently 15%, going back to 17.5% at the end of this year), on the total declared value of the package, plus the shipping costs. The declared value is simply what the little customs form says the parcel's contents are worth. (Under-declaring is illegal, and *your* responsibility as the parcel's recipient, not that of the sender….)

- Remember that books aren't subject to VAT, and this still applies when importing them – if a parcel is solely books, VAT will be zero. If it's a mix of books and other items, ask the seller to itemise the value of the books separately from everything else on the customs form, so you're not charged VAT on the value of the books. (If ordering rulebooks or similar, ask the seller to label the parcel as "books" not "game components" or any such nonsense….)

- There's also an exemption for parcels considered to be of negligible value. If a parcel's value is £18.00 GBP or less, it's exempt from VAT. This increases to £36.00 GBP if the item is a gift and marked as such on the customs form. (Again falsely declaring is an offence, and if the return address on a parcel is a company rather than a person, that's rather a dead giveaway….)

- The exemption totals ignore postage, but if the item's value is over the minimum, VAT is charged on the postage too. The postage value is usually established by the complex procedure of, umm, looking at the stamps…. (Example; if you order £15.00 GBP worth of models, and they cost £5.00 GBP to post, there's no VAT, as £15.00 GBP is under the £18.00 GBP limit. If you order £20.00 GBP worth of models and they cost £5.00 GBP to post, you'll be charged VAT on £25.00 GBP – the £20.00 GBP is above the threshold, so the postage cost is added as well, and VAT charged on the lot.)

Customs Duty

- Customs duty is charged at different rates for various products. The full "tariff" is a bewildering directory hundreds of pages long, but for wargamers the two key ones are that books are usually 0%, and toys are usually 4.7%. Import duty is only charged on parcels of declared value £105.00 GBP or more, and where the actual amount of duty payable is £7.00 GBP or more. (Effectively your parcel would need a value of £148.93 GBP or above before import duty was charged assuming a 4.7% rate.) Annoyingly, import duty applies not only on the declared value of the goods, but also on any VAT payable on them, and I think also on the postage, although I'm not absolutely certain on the last point.

Handling Charges

- This is frequently the one that irks the most, and on lowish value parcels can amount to an appalling percentage, so plan your purchases accordingly. Effectively it's the amount that the parcel handlers charge you for dealing with your customs paperwork, and is usually a fixed amount per parcel. Courier firms charge all sorts of amounts, ranging from stuff all to amazingly exorbitant, but the ones we most want to concern ourselves with are:

£8.00 GBP Royal Mail
£8.00 GBP or £13.50 GBP Parcelfarce
(Most parcels will arrive by Royal Mail, with particularly big boxes being processed by Parcelforce instead.)

- The handling charge applies on any parcel that needs VAT and/or customs duty paying. If there's no VAT or customs duty due, there's no handling charge. Remember that the charge is per parcel, so if ordering a lot, ask the seller to ship it in a single box if at all possible.

Conclusion

- Basically, be aware of what you'll get hit for…. You'll hear tales of people "lucking out" and having items pass through with no charges, but as the system is increasingly computerised this is less and less common, and you'd certainly be unwise to count on it, so plan your purchases around the limits. You're best off with either very low value parcels, under the £18.00 GBP minimum, or pretty high value ones, where at least the £8.00 GBP handling charge isn't too big a percentage. (Eg. a £20.00 GBP parcel will cost you £11.00 GBP in VAT and Royal Mail handling charge; 55% extra. A £100.00 GBP parcel will cost you £23.00 GBP in VAT and handling; a "mere" 23%….)

Dom.

Link to the tariff section for customs duty on toys:
link
Various specific descriptions are 0% or 4.7%, so the exact description's important, eg. dolls and die-cast models are 4.7%, but scale model kits and toy weapons are 0%.

So far this hasn't affected me but I haven't yet managed to clear up one area of 'importing' that could, potentially, cost my customers a lot.

I often get figures sent for painting that are to be sent back. These are not a 'gift' and do have to have a stated value (for compensation purposes). There is no standard 'description' to put on the parcel (that I can find) for such goods so that they avoid customs duties.

In the customs 'rules and regulations' these are supposed to be exempt from import duty but it implies that this exemtion is mostly done in the form of a licence and a tiny concern like me can't get one of those.

Does anyone know how these should be labelled so that duty is avoided ?

Tony Hughes

You have to be registered for IPR to claim it – you can't simply label a package differently. Long-winded regulations here:
link
Page 31 of the PDF covers postal imports for IPR, but you have to have an authorisation before the item's posted to you. Contact details for help and information on page 12….

Dom.

You're leaving? Too bad. Y'all come back!

Very good write-up. Thank you!

I bet UK buyers would also benefit from a guide for sales to the UK for VAT ignorant people like me.

Nice job!

Thanks Dom

Yes, I have attempted to read that already but it doesn't seem to allow for anything but large businesses importing from other business on a fairly regular basis.

Ah well, just as I supposed, I can't do it.

I'll have another scan and see if I can see some way I can do it but I'll bet I'm screwed if they decide to hit one of my parcels.

Back to the original for a minute – the only time I got hit with a customs charge was on a prize from a competition run by a US manufacturer. My 'prize' cost me £18.00 GBP

Tony

I could be painful when I get my wargames factory stuff about 4 sprues at a time as they go into production.

I had stuff sent from outside Eu and it seemed to depend on what address I used. When I used home address never seemed to get hit by VAT or Duty. Once I had stuff delivered to work adress and did get a bill.

Of course all this can be avoided to the benefit of the UK based retailer by ordering foreign goods from UK sellers.

It's what I do, and I like to think it helps our suffering retailers.

Rally to the flag lads!

So the moral is label everyhting as Toy Weapons and ship in GBP17.99 packs?

I caanot even start to say how this can get so weird.

local tax gets added , post gets added, cost doesnt go over value, all the duties get added based on an estimated value HIGHer than the receipt enclosed.

How 4 packs of figures at 3 dollars each got estimated at 64 pounds is beyond me…..the charges were higher than the value of the enclosed items, which were below the minimum value…..NEVER EVER again…..

55% max seems to be some sort of competition guideline

There's your problem "receipt enclosed" – there should be a declaration on the packet, complete with the correct value. If there isn't, tell 'em to return it to sender….

Decent guide Dom, I'm a customs officer,

the only correction i'd say is that Import duty is calculated on the total cost of goods inclusive of insurance & freight (CIF), import VAT is calculated thereafter.

Thanks Stuart – is VAT paid on the import duty? (I suspect it is, but am hazy on that one – if so the order of calculation won't matter, as you're multiplying anyway.)

Dom

VAT is paid on the import duty yes, the calculation is as follows;

Work out the total cost of goods inclusive of insurance & freight, then;

Add the import duty where relevant, then;

Add the import VAT

This should be the order in which you should calculte, and don't add the two together and then work it out as you'll often get a different result.

What I will say, or re-iterate your point is that in general most importers, certainly on this site, will only generally have to take into consideration the import VAT and clearance charge levied by the courier / parcelforce.

Import duty only becomes a consideration where the goods' CIF is in excess of £120.00 GBP (this increased from £105.00 GBP in January and should stay at £120.00 GBP until review in October 2009)

Thereafter the import duty can still be waived if the amount of duty is less than £7.00 GBP

Those are the basics, there are a great deal of variables that can occur but this and what you've stated pretty much covers things from the perspective of a non commercial postal import.

Stuart

Stuart, on behalf of the UK TMP members. I'm sure I can say we are all very appreciative of the fine work you do. Now, if you'll just take this brown envelope and look over there for a while…

:-)

Steve P

Whisky is preferred! I need some new paint brushes as well :)

Stuart – impressed! You can have my job :o)

The only charge I object to paying is the outrageous £8.00 GBP from the royal mail. That's normally much more than the cost of the tax that's being collected.

The clearance fee is a difficult call.

If you're expecting the fee and are aware of the fact that you are considered to be importing goods then in my opinion it is fair, Royal Mail are effectively acting as your shipping agent.

Due to reasons that are too dull to go into the cost of declaration and clearance cannot be added to the total cost of purchasing goods from outside the EC so therefore these costs must be calculted at the frontier (point of first entry into the UK)

You don't have to pay the fee, you can make arrangements to self declare which involves completing a declaration, sending it for check and authorisation, then present this at the port of entry (for postal this will usually be Heathrow)and go and collect your goods from the port. There is no charge for any of this but in time and logistics it will cost a lot, and unless you've got a large import or are exceptionally principalled there's little point in even considering this procedure.

Royal Mail are probably the cheapest in terms of declaration fees, they can get very high, particularly with courier companies.

What I will say is that if your goods are declared by Royal Mail (which they would be if the goods were exported using a foreign country's postal system)their procedure is to declare and clear the goods but they generally will not release these to you until you have paid them for the duties and their declaration services. This can be annoying as you may have a delay in receiving your goods but it does give you the opportunity to see what £ is due and whether you're prepared to pay that, also it can give an indication as to whether there has been a mistake in any of the duty calculations (often a decimal place can be miscalculated so a declared value of $10.00 USD could be stated as $100.00)

For reference, most courier companies receive and clear goods, deliver, and invoice at a later date.

So, in summary, do check how goods are being sent to you and if they are being consigned from outside of the EC you will be importing and clearance fees and duties will be due, so allow for them.

It's always easier for customs or the postal service / couriers to offer advice and guidance before you choose to import, so I hope this gives some insight and leaves you better informed.