Crosswords3 mins ago
Customs Duty And Tax???
7 Answers
I frequently order clothes from an Indian company. Each time I order, I get a text from DHL saying that I have to pay extra to get my parcel- usually £3.50 ish but more recently £13-ish. Today I got one saying I had to pay £28!!! My whole order was 3 skirts and cost me £90. I cannot believe they think it is okay to charge me £28 when I have spent such a small amount. The company say that if I refuse the parcel, DHL will destroy it, and I will be banned from ordering from them again as it will cause a loss to the company. This feels really unfair to me. I'd be grateful for anyone's thoughts or comments. Is this correct?
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Customs Duty on cotton-based clothing is 12%, so that's £10.80 to start with. (The duty would automatically have been waived if it came to less than £9, so you could have avoided it by splitting your order).
VAT, at 15%, is charged on the cost of the goods, the carriage charges and the customs duty. (Yes, that last bit really is a tax on a tax!). You can only avoid the tax if the cost of the goods is less than £15. So, ignoring the carriage element, that's 15% of £100.80 = £15.12.
So our running total is now £10.80 + £15.12 = £25.12.
Then there's a Customs Examination fee to be added on. (That's only waived when there's neither Customs Duty nor VAT to be paid). In practice, routine examinations are carried out by carriers, acting on behalf of HMRC. I don't know what DHL's fee (agreed with HMRC) is but if the parcel had come through the normal international mail system, Parcelforce Worldwide would have charged £8.00. So the total to be paid should be in the order of £33, suggesting you've been UNDER-charged by a fiver.
VAT, at 15%, is charged on the cost of the goods, the carriage charges and the customs duty. (Yes, that last bit really is a tax on a tax!). You can only avoid the tax if the cost of the goods is less than £15. So, ignoring the carriage element, that's 15% of £100.80 = £15.12.
So our running total is now £10.80 + £15.12 = £25.12.
Then there's a Customs Examination fee to be added on. (That's only waived when there's neither Customs Duty nor VAT to be paid). In practice, routine examinations are carried out by carriers, acting on behalf of HMRC. I don't know what DHL's fee (agreed with HMRC) is but if the parcel had come through the normal international mail system, Parcelforce Worldwide would have charged £8.00. So the total to be paid should be in the order of £33, suggesting you've been UNDER-charged by a fiver.
PS:
It could have been worse. If you'd ordered from the USA, rather than from India, the Customs Duty would have been a whopping 27%. (That's because the UK Government imposes a penalty on cotton-based imports from the States, due to the US government subsidising their cotton farmers in breach of World Trade Organisation rules). That would have cost you another £13.50
It could have been worse. If you'd ordered from the USA, rather than from India, the Customs Duty would have been a whopping 27%. (That's because the UK Government imposes a penalty on cotton-based imports from the States, due to the US government subsidising their cotton farmers in breach of World Trade Organisation rules). That would have cost you another £13.50
The charges are all laid down by the UK Government and should apply to ALL imports from non-EU countries.
However some items seem to slip through the system. That's sometimes because sellers illegally falsify CN22 declarations to show items as 'gifts'. (Bona fide gifts valued at under £36 don't attract VAT. Those valued at under £135 don't attract Customs Duty). However that risks the goods being impounded by HMRC if the deception is discovered.
Doing it by the rules, the only way to avoid any charges is to buy items valued at less than £15 (or, of course, to buy items that that don't attract charges anyway, such as books).
You can avoid Customs Duty by keeping the value of your order down to less than £75. (That applies to cotton-based clothing from anywhere outside the EU except the USA. From the USA the value needs to be kept down to under £33.33. Different customs rates to apply to other types of clothing and to non-clothing items).
However some items seem to slip through the system. That's sometimes because sellers illegally falsify CN22 declarations to show items as 'gifts'. (Bona fide gifts valued at under £36 don't attract VAT. Those valued at under £135 don't attract Customs Duty). However that risks the goods being impounded by HMRC if the deception is discovered.
Doing it by the rules, the only way to avoid any charges is to buy items valued at less than £15 (or, of course, to buy items that that don't attract charges anyway, such as books).
You can avoid Customs Duty by keeping the value of your order down to less than £75. (That applies to cotton-based clothing from anywhere outside the EU except the USA. From the USA the value needs to be kept down to under £33.33. Different customs rates to apply to other types of clothing and to non-clothing items).
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