Body & Soul1 min ago
Duty and vat????
4 Answers
I'm thinking of ordering some Ugg boots from an Australian website but i'm not sure about the duty and vat that i will have to pay. Does anyone have any experience of this and can give me an idea of what i will have to pay? The boots are just less than GB�60 and postage is �9. I've looked at the gov website but it just says usually 12% but doesn't say of what!! Also says vat at 17.5% is likely to be payable, but on what??!! Hope someone can help!! Thanks!!!
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Based upon a purchase price of �60, here's how the sums add up:
Duty is charged at 12% of the purchase price. 12% of �60 = �7.20. (NB: You might not have to pay duty. See below for an explanation).
VAT is calculated as 17.5% of the 'value' of the boots, where 'value' = cost price + duty. (Yes, that does mean that you pay VAT on the duty!). 17.5% of �67.20 = �11.76
Then there's a flat fee of �8 for the examination of your package by Customs.
That means that the postman would demand payment of �26.96 before handing over your parcel.
However, things might not be quite as bad as that. Duty is waived if the amount comes to less than �7. So, if the cost of the boots was, say, �58, the nominal duty would be �6.96 and this would be waived. (The sender has to declare the the price of the goods on a sticker attached to the package. Whether you'd have to pay duty would depend upon the exact price stated and the rate of exchange used by Customs for converting the price to sterling).
If the price was �58, you'd still have to pay �10.15 VAT, plus the �8 examination fee, so the postman would require �18.15 from you.
In general, it rarely pays to buy goods from non-EU countries unless they're either free of duty & VAT (e.g. books) or the price of the goods is less than �18. (VAT is waived in this case. The examination fee is also waived when there's no duty or VAT to pay).
To summarise, if the purchase price is just below the threshold for paying duty, the postman will demand around �18. If you have to pay duty, he'll require about �27.
Chris
Duty is charged at 12% of the purchase price. 12% of �60 = �7.20. (NB: You might not have to pay duty. See below for an explanation).
VAT is calculated as 17.5% of the 'value' of the boots, where 'value' = cost price + duty. (Yes, that does mean that you pay VAT on the duty!). 17.5% of �67.20 = �11.76
Then there's a flat fee of �8 for the examination of your package by Customs.
That means that the postman would demand payment of �26.96 before handing over your parcel.
However, things might not be quite as bad as that. Duty is waived if the amount comes to less than �7. So, if the cost of the boots was, say, �58, the nominal duty would be �6.96 and this would be waived. (The sender has to declare the the price of the goods on a sticker attached to the package. Whether you'd have to pay duty would depend upon the exact price stated and the rate of exchange used by Customs for converting the price to sterling).
If the price was �58, you'd still have to pay �10.15 VAT, plus the �8 examination fee, so the postman would require �18.15 from you.
In general, it rarely pays to buy goods from non-EU countries unless they're either free of duty & VAT (e.g. books) or the price of the goods is less than �18. (VAT is waived in this case. The examination fee is also waived when there's no duty or VAT to pay).
To summarise, if the purchase price is just below the threshold for paying duty, the postman will demand around �18. If you have to pay duty, he'll require about �27.
Chris
Full-throttl is partially correct in his/her statement that HMRC can take the postage into account when assessing duty & VAT. There is no duty on 'services' (such as postage) but the VAT-exemption which applies to Royal Mail charges does not apply to postal and courier services from overseas. Hence, it's possible that HMRC could charge an extra �1.58 VAT in respect of the postage but they shouldn't charge any more duty.
Chris
Chris
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