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Import Duty & VAT Threshold on Imported Goods

August 4, 2014 by Andrew Minalto - 605 Comments
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import-vat-tresholdToday’s article is about something quite simple, but still hugely important – import duty and VAT on goods bought from outside the EU.

I receive countless emails every week from people asking me about import taxes; how much they are, when do they apply, how to calculate them etc.

And although once you start importing it becomes second nature and incredibly simple, it is something that can be off-putting initially and as a result; some people continue ordering from local wholesalers at much higher prices than they could get importing directly from places like China or the US.

So today I’m going to go over import taxes and give you a guide to use when importing goods to the UK from outside the EU.

First things first; what taxes do you have to pay on imported goods?

In general, you need to pay VAT (Value Added Tax) and import duty.

VAT is a set amount (currently 20%) whereas import duty varies depending on the type of product, with many being duty-free.

Import duty is calculated as a percentage of the customs value of the goods you are importing, which means:

  • The price paid for the goods.
  • The shipping cost.
  • The insurance cost.

As mentioned above, the duty rate depends on the product type and many are actually duty free. I won’t list them all here but some popular duty free products include:

  • Books
  • Computer Software
  • Desktop PCs
  • Laptops
  • Tablets
  • Mobile Phones
  • Video Game Consoles

So as you can see, a number of products actually have a ‘nil’ rate of duty, even when imported from outside the EU.

To find out the exact duty rate for a specific product, you need to know its HS (Harmonized System) Code, which is basically the universal code to categorise a product.

The simplest and easiest way to find the HS code for a product is by using this site:

http://www.dutycalculator.com/

And then VAT, which is currently a set 20%, is calculated as a percentage of the total customs value PLUS any duty paid.

But one other thing to bear in mind when importing are the minimum thresholds, below which duty/VAT is waived.

For business purchases, import duty is NOT charged if:

  • The total order is worth £135 or less.
  • The total amount of import duty due is less than £9.

And then for VAT – it is NOT charged for any import worth less than £15 with the exception of tobacco, alcohol and perfumes – for which VAT is always payable, regardless of the order amount.

So that’s it – those are the minimum thresholds for paying VAT and duty on orders from outside the EU – £135 for import duty and £15 for VAT.

Personal Purchases/Gifts

giftsBut this only applies to business imports. If you are receiving gifts from outside the EU, the minimum thresholds are slightly different:

  • For import duty for gifts, if the total value is less than £630, then a flat rate of 2.5% is paid.
  • Anything above that value is charged at the normal rate of duty.
  • For VAT for gifts, it is charged on anything above £36 in value.

Obviously we are really only concerned with business imports, but I just wanted to clarify the rules regarding gifts to make everything crystal clear.

And that brings me onto another important point…

Undervaluing Goods or Marking Them as Gifts

I’m sure you’ve all seen this 100s of times! In fact it’s so common that it has pretty much become regular practice for imports from China…

The order is either undervalued on the customs declarations form or it is marked as a gift (more common with small, personal orders on eBay etc.).

I hope you already know without me having to say that you should not do this under any circumstances, because:

It’s illegal!

This should be reason enough for everyone to avoid this practice – undervaluing goods in order to avoid VAT and import duty is ILLEGAL, as simple as that.

And no, the old claim of ‘I didn’t know it was being undervalued as my supplier did it without me asking’ is NOT a valid excuse! You, as the importer, are solely responsible for the items you are ordering and must ensure that all customs declaration forms are filled in correctly.

Another big problem with undervaluing imports is that it makes it impossible to properly book these orders and sales within your accounting.

When you’ve declared an order worth £130 when it was really worth £400, then what happens when you sell those items for £800? You’ve now created extra profit that doesn’t actual exist… ‘profit’ that you will then have to pay tax on… completely negating the benefit of undervaluing your order in the first place.

Basically; it will completely screw-up your accounts which WILL be a huge problem for you – particular as your business grows and you register as a Ltd company.

And that brings me onto the final reason for why you should never undervalue your orders –

It is the absolute WRONG mentality for creating a long-term, successful business.

If you’re relying on avoiding VAT and import duty to make some short-term profit, then your mentality is all wrong and, I’m sorry to say, you probably won’t create a successful business anyway.

If the product you’re looking at importing and selling isn’t profitable when you pay the correct taxes, then you should be looking for another product – not trying to figure out how to avoid paying those taxes!

Do things right from the beginning and you will continue that way!

I’m sorry if you feel I’m going on about this for too long, but it is so important that you don’t go down this route, particularly for new and first-time importers.

So please, always declare the correct amounts so that you can properly book your purchases and sales, and build a real business.

Now lastly for this guide, I want to do a quick example calculation for you so you can follow the same steps yourself.

Example calculation

For my example, let’s say I am ordering a set of high-end tennis rackets from the US, which I am importing to the UK.

Firstly, I need to calculate the customs value:

$1,000 (10x $100 rackets) + $150 (shipping cost) + $20 (insurance) =$1,170

IMPORTANT – I now need to convert this amount to GBP (British Pound) for tax purposes but this cannot just be estimated or taken from an online exchange site like xe.com, no – instead you are given the rate of exchange to use each month by HMRC, which you can find here: Exchange Rates 2014

So for my calculation, the $-£ exchange rate for August 2014 is 1.7042 which means my import is valued at £686.54 ($1,170/1.7042).

The third step is to calculate the import duty, which for tennis rackets from the US is 4.7%:

£686.54 x 4.7% = £32.27

Next is to calculate the VAT at 20%. And remember, this is paid on the total customs value (£686.64) PLUS the duty paid (£32.27), so:

£686.64 + £32.27 =

£718.91 x 20% = £143.78

That means all that’s left for me to do is add the import duty and VAT together to find out the total amount of import tax payable on this order, which is £176.05 – making my total landed cost for the 10 tennis rackets £862.59 (total product cost + all import taxes).

And that’s it! 5 simple steps to calculate the exact final cost for any import order.

And although it is important to understand how it works, you don’t actually have to worry about and calculate all the details yourself if you use a freight forwarder for your order (which is what I always recommend).

A freight forwarder takes care of EVERYTHING when you import, including shipping and customs so there’s really very little for you to do.

If you need a freight forwarder in the UK, my recommendation is Woodland Global – they have an impeccable reputation and cater equally to small and large businesses, with very reasonable pricing.

Also, if you’re sending small packages via courier companies – again, you don’t have to worry about this procedure as couriers will do the customs clearance procedure for you.

Still, its essential to learn how this process works so that you can calculate POTENTIAL taxes before you place any orders, so you know exactly how much goods will cost you when they’re delivered to you.

So that covers pretty much all I wanted to go over in this post – now all that’s left is for you to take action!

Use this guide along with my hugely popular posts on How to Import Products from China & How to Avoid Scammers and Find Trusted Suppliers on Alibaba to start your very own importing business.

I really have provided you with everything you need, so don’t procrastinate and make excuses, use what you’ve learnt and get started today!

I look forward to hearing your success stories soon!

All the best,
Andrew


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605 Comments
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  1. Hi there – I am a sole trader selling mostly zero rated goods (baby clothing). When I purchase from Suppliers in Spain they charge me tax on the goods (as baby goods are not zero rated in Spain). If I were VAT registered would they still charge me the tax?
    I know it’s not normally recommended to register for vat if you don’t need to, but as I don’t have to charge vat on nearly all of my sales, I could claim back vat on my purchases of packing supplies, advertising etc, this would mean I would probably get a vat refund every quarter, rather than me paying them, they would be paying me? Is this right or am I totally barking up the wrong tree??
    Any help with this would be great
    Thanks

    1. Andrew Minalto

      Hi Carla,

      Yes, in your situation you would be better off by being VAT registered. That is if your supplier in Spain is also VAT registered.

      Then they won’t charge you VAT on purchases at all.

      Andrew

      1. Thanks so much – it seemed too good to be true

        regards

  2. Hello
    Thank you very much for the article, I am planning to sell few items on ebay (small scale). i am going to ask my sister to buy stuff from india and send it to me. I suppose my initial purchases will be below 135£, so i will be exempted from import duty. what about VAT? she will be using indian postal services and i suppose they will charge VAT?

    1. Andrew Minalto

      Yes, you will still need to pay VAT.

      If packages will come via Royal Mail, they will do clearance for you and charge you VAT + processing fee.

      Andrew

      1. Prabhu

        Thank Andrew for the reply

        so i don’t have to worry about it and Royal mail will do it automatically?

      2. Andrew Minalto

        Yep, exactly.

  3. Hi Andrew, since last year I’ve imported several items from abroad (Blu-rays from Asia/US mostly) and I’ve seen the websites in question allow the buyer to falsify the package (put an incorrect item value to avoid customs). At the time I had no idea what made me think this was a good idea. So I’ve received the items and their were no customs/VAT charges as they were undervalued.

    The Blu-rays are for home use only and are not illegal imports or anything like that, I’ve purchased roughly six of these from said companies on eBay and whatnot. I don’t sell for profit as I don’t run a business.

    Should I somehow pay these fees back as I plan never to order from these companies again as I now know these practises are wrong. Roughly it’s probably around £70 worth or less of VAT plus Royal Mail handling fees I was not charged. I was thinking of just donating £100 to a charity or something as I feel a bit guilty for doing it, even though at the time I didn’t think I was doing any wrong. I don’t like to do the wrong thing, I have since looked up HMRC’s website and there doesn’t seem to be any general enquiries email and their Twitter account is not currently being utilised.

    Apologies for rambling on. Why I thought this was a good idea is beyond me. Thanks for the informative article I appreciate it. Any advice on this? Thank you.

    1. Andrew Minalto

      Hi James,

      From legal perspective you shouldn’t really worry about this if it was just few items over couple of years. Millions of under-valued packages enters UK each year, so….

      But if you feel bad about it, yes, donating that amount to charity sounds like a good idea to me! 🙂

      Andrew

      1. Thanks for the reply Andrew!

        It was around six or so items over the past few years. I’ll donate the sum to charity. 🙂

  4. if you have to pay vat where do you pay it? do you have to send the money to the supplier? I bought something from alibaba. but for myself not to sell it and i think i was scamed. they tell me i have to pay vat taxes for 7 items they send not 1 that i ordered and they want me to pay 700$ in their account to clear vat. is that even legal? where can i call to see if i have anything at the border in my name? help me please

    1. Andrew Minalto

      Hi Dalia,

      Unfortunately you have been scammed, yes. This is a typical scam you can read more about here:

      http://andrewminalto.com/top-10-alibaba-scams/

      You don’t pay VAT to supplier!!!! You pay it to courier, post office but never supplier.

      Andrew

  5. Hi Andrew,
    Is it legal to have an agreement with a chinese company whereby they charge less for the product than normal, keeping down duty and vat but get a share of your profits when the items are sold at a later date?

    1. Andrew Minalto

      Hi John,

      Yes, it is illegal I think.

      Tanks,
      Andrew

  6. Daniel Bailey

    Thanks Andrew, thought so but best to check. You mentioned mobile phones/tablets are duty free. We are importing mobile phone accessories. Mainly cases and mounts. We were charged duty on these last time when using the buyers dhl number. I assume these arent therefore duty free. I did look on the calculator and think i came to the conclusion that this was the case but wondered if you new of the top of your head?

    1. Andrew Minalto

      Hi Daniel,

      Accessories are not duty free no, so you’re correct in your assumptions.

      Andrew

      1. Daniel

        Thanks Andrew, very helpful indeed 🙂

      2. Andrew Minalto

        You’re welcome Daniel! 🙂

  7. HI Andrew,

    When you pay the VAT on the purchase can you claim it back through your usual VAT return or is it not the same as a purchase in the UK and it can’t be claimed back?

    Thanks,
    Daniel

    1. Andrew Minalto

      Hi Daniel,

      You mean VAT you pay when import goods from outside EU?

      1. Daniel

        Hi Andrew,

        yes sorry, we bought some items from USA and we received an invoice for duty and VAT.

        Thanks,
        Daniel.

      2. Andrew Minalto

        Yes, of course – if you’re VAT registered you can claim this VAT back via VAT return just like any UK purchase.

        Thanks,
        Andrew

      3. sudarsan

        Andrew, really helpful stuff you got in there.A BIG THANK YOU.

        i am right in thinking that we can claim vat back on purchases only from Non eu countries or even EU countries ??

        we are a new business , don’t think we make big sales to register for VAT, cold i still register for VAT and get the advantage of claiming VAT back from purchases?

        thank
        kanumilli

      4. Andrew Minalto

        Please see this post regarding registration for VAT at early stages:

        http://andrewminalto.com/ebay-tax-mistake/

        With EU orders it works differently – if/when you’re VAT registered, you simply provide your VAT number to your EU based, VAT registered supplier and they WON’T charge you VAT at all, on your order. But you still have to add it when re-selling goods to consumers of course.

        Thanks,
        Andrew

  8. Hi I have just ordered ladies clothing from USA . the total amount 230.00usd for items, and shipping and handling fee was 110.71 usd with insurance 5.15 usd DHL will be delivering the items so have i understood right they will send me invoice or ask me to pay on delivery import and vat taxes ? or do I have to let hmrc know . Also if I buy from Germany does import taxes and vat still apply as I have already paid 19% vat before the items left Germany sorry for asking 2 questions at once HELP

    1. Andrew Minalto

      Hi Geraldine,

      Yes, that’s correct – DHL will take care of customs clearance procedure so you don’t have to contact HMRC.

      No, when you buy from Germany, you won’t have to pay any extra taxes. Same applies to any country within European Union.

      Thanks,
      Andrew

  9. Hello,
    I’m a self-employed and I’m planning to import outside the EU, mainly from China.
    None of the order will be over £135 – does it mean I don’t have to pay duty even if I do this on business purposes buy-sell. What if the order is below £15 – I don’t have to pay VAT either?

    Regards
    Shem

    1. Andrew Minalto

      Yes, if it’s below £15, you won’t have to pay VAT either.

      Thanks,
      Andrew

      1. Andrew, one more thing, I couldn’t find on the gov.uk anything about minimum thresholds for paying VAT and duty on orders from outside the EU
        It says that all goods imported must be declared.

        Regards
        Shem

      2. Dear Andrew

        I was there before and couldn’t find anything about minimum thresholds and anything that you don’t have to declare the imported goods if the are under some value

        Regards
        Shem

      3. Thank you Andrew for a quick reply.
        Are there any restrictions of how many orders I can bring like that?
        Do I have to declare my imports to HMRC?
        Is the invoice with me name, address, price and supplier details enough for my accounts?
        Let’s say I bring 10pcs for £1.50 each so £15 in total, no vat, no duty
        if I sell for £6.50 each, my profit is £50 and I need to pay tax on this profit
        Am I right or am I missing something?
        I’m trying to plan ahead and have all the angles covered.
        I want to buy-sell legally without avoid paying any necessary taxes, duties, vat
        Many thanks for your help
        Shem

      4. Andrew Minalto

        No, there are no restrictions – its all based on “per shipment/order” values.

        You don’t have to do any special “declarations”, no. Yes, your name, price, supplier details – standard invoice information is enough.

        Yes, you’ll pay tax on your profit (final sale price minus product cost, eBay fees, shipping fees etc.)

        Andrew

      5. Thank you Andrew, That’s clear now

  10. Hey Andrew
    I’m looking at tablet pc from aliexpress with a price tag of 800 usd, They offer almost like free DHL delivery. M y point here is ,as I read on some questions, how do I pay tax here ? Do they deliver item and I pay tax on collection or they send me tax which has to be paid.
    Also i calculated that ill have to pay 117.20 gbp VAT and as i seen its duty free ( I’ve used http://www.dutycalculator.com/)

    Thanks in advance.

    1. Andrew Minalto

      Hi Ingus,

      Courier company will contact you and give you invoice for taxes you have to pay. Some companies ask for this money right on delivery, some – before delivery and some send it via mail after item has been delivered. Either way you don’t have to worry about this as courier will take care of customs clearance procedure and simply invoice you for charges.

      Thanks,
      Andrew

  11. Hi Andrew.
    I’d like to buy a phone -cost 280 australian dollars- from Australia of course:-) ,,,I live in UK. Do I have to pay any tax and duty? and how much if yes? Thank you and sorry for my english:-)

    1. Andrew Minalto

      Hi Diana,

      Yes, you’ll have to pay VAT + import duty on your order.

      Apron. it will be 25% on top of what you pay for item and shipping.

      Andrew

      1. ,,,thank you very much for your quick response :-),,,appreciate this!

      2. Andrew Minalto

        You’re welcome Diana! 🙂

  12. I am usman, an importer of consumer electronics and accessories etc. I found this thread very helpful. Bundle of thanks for sharing knowledge and giving me guidence. May I ask couple of following questions?
    1) is there any free website as a substitute to duty calculator? As duty calculator doesn’t allow more than three items to check for free.
    2) how much vat, duty and other expenses related to imports of mobile phone spare parts like LCD from non EU countries?

    1. Andrew Minalto

      Hi Usman,

      You can find tariff codes and import duty rates for everything directly on HMRC website, if you don’t want to buy credits on duty calculator website.

      Andrew

  13. Les Philpott

    Hi Andrew.

    I run a company called L P Clearance in Heathrow who specialise in customs clearance. I have read through some of the questions and answers on this site but when asked for a cost on customs clearance entries you have answered with the cost of £10-£20 but this is not correct as there are many factors to account for like how many tariff headings are used as these are charged for each one and some clearing agents charge up to £105 for the customs entry and £7.50/ tariff heading, this includes one of the big handling agents on Heathrow airport. if you need proof of this I can send this over to you but I am not allowed to disclose on open sites for legal reasons.
    I also have not seen anything advising any one that if they do pay duty or vat on shipments they will need to pay 99% of the customs agents a charge up to 10% for the use of a deferment or Fas account on top of the duty and Vat. I`m not having a dig I just thought this would be helpful for other people looking to import.

    Kind Regards,

    Les Philpott

    L.P.Clearance & Couriers UK Ltd

    1. Andrew Minalto

      Hi Les,

      Thanks for sharing this with us.

      Yes, I know that cost depends on number tariff headings (when I started out many years ago I made a stupid mistake of importing 20 different items, vey cheap items and ended up paying something like £200 for customs declaration).

      The £10-£20 is what most couriers and royal mail charge, that’s why I use it as a general figure.

      Anyway, Thanks for your comment!

      Andrew

  14. Hi Andrew
    great info here on this page. I am looking to buy some items from China, if the products are not all the same do I have to calculate the duty on each separate item as they will have different codes? how does it work if the delivery contains various different items? Do i pay VAT on only items that are more than £36 as a single item or a group of items? How will customs know whether it is a gift or for business?

    thanks

    1. Andrew Minalto

      Hi Bella,

      Yes, you have to calculate import duty on each item you have, if they’re different, as tariffs will be different.

      VAT is not affected though as you pay it on TOTAL value of your order, for all items.

      Customs will know it by looking at attached customs declarations form and/or invoice.

      Thanks,
      Andrew

      1. Thank you Andrew. But how will customs know whether the products are gifts or for a business? if I only buy a few items and it is under 630 then will they classify as gifts or for business

      2. Andrew Minalto

        It’s stated on the customs form – if it’s a gift or commercial shippment.

  15. Hi
    I’m planning to purchase a camera that casts £2650 from Hong Kong for my own use,
    Do I need to pay any tax?

    1. Andrew Minalto

      Yes, of course.

      You’ll pay roughly 25% in taxes when camera arrives in the UK.

      Thanks,
      Andrew

  16. Hi Andrew, I am a young clothing designer and I would like to know your views on drop-shipping direct from manufacturer to the customer, as opposed to shipping over a large quantity of stock to then deliver to customers worldwide. The reason I ask is because one of my manufacturers brought this to my attention as one of the services they provide. I was wondering if you could help me to analyse the pro’s and con’s. I am based in the UK and about 60% of my customers are in the US. The manufacturer is in China. It is cheaper to deliver from China to the US than from the UK. My only concern at the moment i would not want my customer to bear any import/duty cost as I would like to pay for that. This is a big decision and any advice would be greatly appreciated.
    Lia

    1. Andrew Minalto

      Hi Lia,

      Downsides are obviously longer deliver times + as you say, customers will have to pay import duty & VAT.

      Also, if you don’t get the stock first, you have no control over quality of products being sent out, something which could be very important in your niche.

      So I personally wouldn’t do this, no.

      Thanks,
      Andrew

      1. Thanks Andrew,
        Your right quality assurance is the most important, i’m not convinced by this drop-shipping idea. I will be shipping everything to the UK, maybe to save costs in the future I will consider freight shipping rather than by air.

    2. I was reading the comments regarding DHL, and was wondering if theres any way that DHL can send the invoice to the sender (me) and not the receiver (customer).

      1. Andrew Minalto

        I’m not sure how exactly it works but I think they do offer a service where sender pre-pays taxes. But you will have to contact them to find out how this works as I have personally never done that.

        Andrew

  17. Cool, I was always wondering why anything I ordered from China on Amazon was marked as a “gift.”

  18. Hi Andrew:
    I have a product in the US, and occasionally ship to the UK:
    I include an Invoice on my parcel. Is it illegal to declare the package value as what my cost was in producing the item (as to avoid huge fees for the recipient). If so, are there any ways to lower my customer’s VAT? my last customer had to pay 38 euros for a item sold at 180 USD (shipping included), 25 euro for VAT and another 13 for clearance fee… any suggestions for me as to help out my customer? Thanks in advanced, Tal

    1. Andrew Minalto

      Hi Tal,

      No, I don’t think you can declare your cost price IF you send directly to your customer. If you have lots of such orders, it would be best for you to send some stock over to UK first (declare cost price) and then simply send to UK/EU customers from your Uk location. Then your customers in EU won’t have to pay any extra taxes.

      Thanks,
      Andrew

  19. Hi Andrew,

    I recently received jewellery goods from China with a total value of $153.40 (£104.01) which is under the threshold of £135 but was still charged

    £24.54 Vat
    £11.00 Brokerage Surcharges

    After reading the info and comments on this page, I understand that I should NOT have been charged VAT at all?

    Please advise.

    Thanks
    Jo

    1. Andrew Minalto

      Hi Jo,

      No, it’s all correct. VAT should be charged in your case but not import duty (threshold for import duty is £135).

      So it’s all correct.

      Thanks,
      Andrew

  20. Hi, can you help…if I order something from Australia that costs £14 (under vat threshold) but the delivery cost takes it to £20 would I pay vat?
    Thanks, Beth

    1. Andrew Minalto

      Hi Beth,

      Most likely for such small valued order you won’t have to pay any taxes, no.

      Thanks,
      Andrew

  21. Hi Andrew

    I’m thinking of buying a second hand Sonos playbar speaker in Canada. It retails new in the UK for UK£599, but I can get a second hand one in Canada for CDN600 (roughly UK338 @ 1.7764 CDN to GBP). This speaker is for me and will NOT be sold on. Do second hand goods fall under the same import rules etc, and would I pay duty and VAT on the price I paid for the unit, or the Canadian retail price?

    Cheers Alan

    1. Andrew Minalto

      Hi Alan,

      Yes, second hand items fall under same rules I’m afraid.

      But no, you won’t have to pay taxes on full retail price – just ask seller to include invoice to package you paid and taxes will be based on that.

      Thanks,
      Andrew

  22. Bryan Fortnum

    Hello everyone

    Bryan here, i have question, i want to start selling a product from alibaba, it will cost me around $100
    shipping is around £65 as i being adviced by the supplier

    do i need to ask for the insurer and name of the delivery company? (ups, dhl etc.)

    since the product is very cheap, single peace costing around $4
    do i have to pay for tax duty and this sales tax?

    this is from a supplier from china to the united kingdom
    product is very light and made mostly of cardboard , can be classed as a toy. (foldable cardboard kit)

    will be sold in the uk for £10 to £15 in hope for profit

    i am new at this but i need to make it happend, thank you in advance.

    1. Andrew Minalto

      Hi Bryan,

      Yes, you will have top pay taxes on this order as total order value is important here and not price of each individual item.

      But you have to ask supplier to show full value on customs forms/invoice – otherwise such small order can just slip through the customs without you getting charged any taxes.

      Thanks,
      Andrew

  23. Hi, when I buy from a supplier, I also have to pay a paypal fee, or bank transfer fee on top of the cost of the goods. Should that fee be included with the duty and VAT calculation?
    Thanks

    1. Andrew Minalto

      Hi James,

      if the fee is shown on the supplier invoice (like with PayPal when often suppliers add it to total cost), then yes, you have to pay for full amount you have sent. But if you sent money from bank account, no – no one will ask you for proof of fees you have paid for that transfer.

      Andrew

  24. Hi Andrew
    Firstly- great site! Very helpful.
    I recently bought 2 dresses from Australia at $379AUD and paid tax upon arrival of £71 requested thropugh the courier DHL.
    I want to return both dresses as they do not fit.
    Can I expect a refund on the tax I paid? Or have I just lost £71? If I am entitled to the tax refund, do you know how I would go about getting it?
    Many thanks!
    Sam

    1. Andrew Minalto

      Hi Sam,

      Thanks for your comment.

      Yes, you can get a refund back from HMRC following these steps:

      http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/vat/sectors/consumers/goods-imported.htm#8

      Thanks,
      Andrew

      1. Most helpful- appreciate the advice!
        Best,
        Sam

  25. Hello Andrew,
    I want to start importing womens clothinkg (knitwear) from Hong Kong and have spent some time trying to understand the whole shipping/VAT/duty jungle….
    Few questions:
    -Freight Forwarder told me I have to VAT register and get an EORI number, even if my turnover will stay well below the VAT treshold. Is that correct?
    -In case I am VAT registered, can I then claim back the VAT on each sale (ie if I buy a sweater for landed cost £10 and sell it to end customer for £30 (equals £24 ex VAT), can I claim back the £6 per item?
    -when you say shipping cost (to calculate the correct VAT) do you mean ALL costs (shipping, custom clearance fees, airline handling fees, delivery to door)?
    Thank you so much for your help!
    Nina

    1. Andrew Minalto

      Hi Nina,

      Thanks for your comment.

      1) Who told you that? It’s absolutely NOT true! You don’t have to register for VAT to import such goods. You can get EORI number without being VAT registered. Do NOT register for VAT!

      2) As I said, just don’t do it. At the end, if you’re VAT registered, you’ll pay more in taxes. More details here:

      http://andrewminalto.com/ebay-tax-mistake/

      3) Shipping costs that you paid to get goods delivered to the UK. usually this is covered in invoice you received from supplier.

      Hope this helps!

      Thanks
      Andrew

      1. Thanks! But I am still confused….
        You are saying I don’t need to be VAT registered if I stay under the annual treshold of 81K. So I can become a clothing retailer (online and offline) without a VAT registration?

        However I need to pay 20% VAT on importing the goods+ import duty, correct?

        How about VAT registration of you are importing from another European country?

      2. Andrew Minalto

        Yes, exactly. If your sales are below the threshold, you don’t have to register for VAT.

        But yes, you’ll pay VAT + import duty on imported goods.

        Nothing changes with EU based suppliers – they will simply add VAT to their invoices. (no customs procedure when you buy from EU based suppliers).

      3. Hi Andrew- one more thing…
        Why are you so against VAT registration? I understand it can inflate the prices for your end customer, but at least I can claim the VAT back, correct?
        If my margin is high enough can I not simply set my retail price ex VAT a bit lower, so that the customer is charged a price incl VAT that I think is still the correct/competitive retail?
        Thanks for your advise

      4. Andrew Minalto

        lol, I’m not against VAT registration – when you reach threshold, you register for it.

        But doing it voluntary is simply stupid because you will pay more in taxes at the end of the day, even taking account that you can claim back VAT on purchases, as explained in my guide here:

        http://andrewminalto.com/ebay-tax-mistake/

  26. Hi There

    Im glad I found this advice so Ive now added it to my Bookmarks : )
    Im a designer and I am having my designs made up as lovely products in Nepal. The company have provided me with quite a few free samples and seem to be very helpful so far. The parcels have come to my door within approx 5 days so all seems well so far, and with no charges as the samples are marked as No Value samples only. Im told by the company in Nepal that they are duty free as Europe gave them permission as a developing country. Now Im wondering if I will still occur VAT once they arrive here in the UK as larger orders. I am taking my products to a trade show so my orders can be small to larger? Have you any advice on shipping and charges from Nepal? The items are hand made felt slippers for children and small bags also felt, this is a tradition in Nepal. So I expect these are considered to be wool items no other materials added and are natural dyes used. What do you suggest I need to do. Thankyou Nina

    1. Andrew Minalto

      Hi Nina,

      Thanks for your comment.

      Yes, you’ll have to pay VAT, unless these products are 0% VAT rated. You can check exact fees/VAT rates using this online calculator:

      http://www.dutycalculator.com

      As for the shipping – depends on how large your orders are. If they’re full palettes, then you will want to use sea freight. If it’s just 20 or 30kg boxes, then you want to stick with courier companies.

      Thanks,
      Andrew

  27. Hi. can i ask the merchant in china to mark my airsoft gun as a free gift, and send it to me. its is not for business, but for personal use.

    1. Andrew Minalto

      You can do that yes, but technically it’s against law.

      Plus if it’s a big item, like airsoft gun, most likely customs will stop it anyway and ask you for proof of purchase.

      Andrew

      1. Thanks.

  28. Christina Akinuli

    Andrew

    Where the amount inported is over £15 duty is payable. The amount is £16.91 what I object to is the thieving £8 handling fee charged by the Post Office and the cheeky bastards make you go to the Post Office they insist on cash as they are too backward to take card payments. As the amount is so low is there a chance that this sum will escape the fee as I know customs do not check every item.

    Thanks for the explanation above.

    Christina

    1. Andrew Minalto

      yes, unfortunately that’s how it works… 🙁

  29. hi just a quick question ,I have just purchased something from china for about £90 ,the curriors SCS have billed me for import duty before they would send it to the uk, is this legal ,I have always paid when its arrived in the UK not before,im going to be really pissed ,excuse my French if im charged here as well,they stated in the invoice I would not be charged in the UK

    1. Andrew Minalto

      Hi Mark,

      You sure you haven’t been scammed????

      As you never pay import duty/VAT to China, ONLY when goods arrive in the UK.

      From the sound of it, sounds to me that supplier scammed you.

      Thanks,
      Andrew

  30. Hi Andrew,

    I live in Florida and I am thinking of buying my sister a laptop and shipping it to her in the UK. The cost of the laptop is approximately $410 and shipping will be about another $160 but I would like to know is my sister going to have to pay VAT or Import Duty when it arrives?

    Stuart

    1. Andrew Minalto

      Hi Stuart,

      Yes, she will have to pay VAT + import duty which is approx. 25% together as value of laptop is above gift limit.

      Thanks,
      Andrew

      1. Stuart

        Hi Andrew,

        Thank you for the info. Can you tell me what the limit is? And I understand it is on the full amount not the amount over.

        Stuart

      2. Andrew Minalto

        The limit on Gifts when you don’t have to pay VAT is only £36.

        So your item is def. way above the limit.

        Thanks,
        Andrew

  31. Hi Andrew,
    I hope you can help me. I received a package from USA last week which I had to pay customs for. After opening the package I found the goods were damaged. I contacted the company and they have said they will of course send a replacement for the items. Now will I have to pay customs again? (It was lipsticks I bought and 2 were completely broken). I hope you can answer my q as I cannot anything online regarding this situation.

    Many thanks

    1. Andrew Minalto

      Hi Nazma,

      Yes, unfortunately you will have to pay customs again if 2nd order is being sent. Unless you can ask the seller to send it as a free gift (show on customs declaration that it is a free gift).

      Thanks,
      Andrew

      1. Hi Andrew,

        Thanks for the reply. I was dreading this, it’s very unfair as it’s not my fault the goods were damaged. I have contacted the company and asked if they could mark it as a gift otherwise it really isn’t worth it if I have to fork out for customs again. Thanks again

      2. Andrew Minalto

        no worries, you’re welcome.

        Thanks,
        Andrew

  32. Raj Bharath

    Hi Andrew,

    I appreciate your great support. Actually, I am a student in France and I would like to import electronic kits and I hope you can clear my doubts regarding French customs also. I have gone through the French customs site (http://www.douane.gouv.fr/articles/a10751-envois-postaux-sans-caractere-commercial-franchises-douanieres-et-fiscales) and I have few questions.

    Question 1:
    If I buy from a non-EU website through UPS shipping, for a package less than 150 euros (for example MP3 – € 75, electronic chip -25€ , soldering kit -15 €, Shipping – € 20, Insurance -. 0€ , weight – 700gm, 1 pack), I need to pay 20% VAT but no customs duties as per the above link. Although the invoice on the package clearly states the details of the above items,will the French customs charge customs clearance fees from the courier? If possible, can you please let me the rate of the fee.

    Question 2:
    If I buy electronic items (less than 100 euros, including shipping) from ebay.fr or amazon.fr, but if the origin of the product is from China / Hong Kong, will I need to pay VAT charges? Also, if the product’s origin is from the UK, will I need paying VAT charges?

    Thank you,
    Raj Bharath

    1. Andrew Minalto

      Hi Raj,

      Thanks for your comment.

      1) Yes, courier company will charge you customs clearance fee. Not sure how it is in France but in UK it’s usually £10-£20 depending on which courier company you use. You can call couriers and ask them what is their customs clearance charge as usually it’s a fixed fee.

      2) Yes, it doesn’t matter WHERE you buy items from, as long as they’re shipped from outside EU, you’ll have to pay taxes. If item is shipped from UK, then no – you won’t have to pay any extra charges as UK is a part of EU.

      Hope this helps!

      Thanks,
      Andrew

      1. Raj Bharath

        Hi Andrew,

        Thanks a lot for your clear explanation.

        Does only the private courier services like DHL, UPS charge the customs clearance fee for importing and not the government postal services?

        Thanks,
        Raj Bharath

      2. Andrew Minalto

        You’ll have to find out this at your local post office as in some countries it’s free service, in others – paid.

        Thanks,
        Andrew

      3. Raj Bharath

        Thanks a lot for the details.

        Raj Bharath

      4. Andrew Minalto

        You’re welcome Raj! 🙂

  33. Hi Andrew,

    Thanks for this article! It has really helped me make sense of VAT and import duty.

    I would just like to know at what point would you need to pay the VAT and import duty on the items you are importing and who does it need to be paid to?

    Is it paid directly to a courier on top of shipping or can it be paid via a freight forwarding company?

    Thanks

    Kez

    1. Also, If it is paid directly to a courier are you given the VAT and import duty price along with the shipping quote or do you need to work this out yourself?

      Thanks

      Kez

      1. Andrew Minalto

        Shipping you will pay before the order or with order (if supplier arranges shipping).

        Taxes you’ll pay when goods arrive in the UK. They will calculate exact amounts for you.

        Thanks,
        Andrew

    2. Andrew Minalto

      Hi Kez,

      The amounts are listed in the article.

      If your order comes via courier company, you’ll pay them (taxes).

      Andrew

  34. Hi,

    I just wanted to clarity with regards to stamp duty and vat in Uk so if the item is worth (purchase price) below £15 we are not eligible to pay it, so if we place an order for 100 units of goods as long as each item is below that threshold no tax is paid?

    I am thinking of trading in watches on eBay just wanted to see if i can avoid taxes and just bear the shipping costs from china to uk

    Thanks

    1. Andrew Minalto

      Hi Nitin,

      No, it won’t work. Threshold is calculated for whole shipment and not individual value of each item in your order.

      Thanks,
      Andrew

      1. HI

        What if each shipment was seperate?

      2. Andrew Minalto

        Then it’s all good.

        As each shipment is valued separately.

        Andrew

      3. Mike Matthews

        Hi Andrew

        Are you sure HMRC will be okay with this, to me it sounds like a great idea if the value of your items are very cheap, i.e 1 pound, and you send a maximum of 14 of them each time, to go below the import level.

        But if you did this 2 or 3 times a week, wouldn’t they start to get a bit upset or they don’t really care as your technically not breaking any laws.

        Do you know anybody who has actually use this technique?

        Thanks

        Mike

      4. Andrew Minalto

        I can’t see it being a problem really as long as each shipment is TRULY below the threshold value.

        I haven’t done this personally though as I can’t see the practicality in doing something like this.

  35. Hi, I am new to importing goods from China. I am having 600 earmuffs imported to me in the UK (cost – USD 650), being sent to me via DHL. Anything I need to do on my end to receive this shipment? My Chinese supplier (from Alibaba) tells me that there is nothing I need to do, and my UK accountant tells me that as long as the goods are under £3000, I don’t need to worry about anything.
    Thanks!
    Tim
    London

    1. Andrew Minalto

      Hi Tim,

      Thanks for your comment.

      Yes, if shipment is via DHL, you don’t have to do anything extra. DHL will contact you and send invoice for VAT and import duty once goods arrive in the UK. They take care of customs clearance procedure so you just have to pay the invoice.

      Thanks,
      Andrew

  36. Hi Andrew,

    I found this page in an attempt to solve certain issues. I have received a few imports with under-declared values hence my having to pay reduced duty and tax. This happened despite my telling the seller/shipper not to reduce the value. I even lied and told one of them i was having an audit shortly. Instead of declaring the real value, he simply included an invoice to match the low declaration. I would like to correct this error but worried if I contact HMRC, it will put me or the seller/shipper in trouble. How do i do this without getting myself or the seller/shipper into trouble.

    is there a way to correct this on my account such that the money inevitably goes back to HMRC? I’ve been to ”Duty Calculator” and now know the correct fee to pay and was thinking i should simply add the difference to the income column of my accounts to make up and include the printout from ”Duty Calculator” in my documentation incase i get audited in the future?

    I simply want to do the right thing and not cause further complication. Looking forward to your response. Thank you

    1. Andrew Minalto

      Hi Sammie,

      You simply need to contact HMRC and inform that goods where under-valued.

      They have special forms/procedure for this which allows you to pay extra tax you owe.

      This won’t put you or supplier in any trouble as long as you do this BEFORE HMRC finds it out in a audit.

      Thanks,
      Andrew

  37. Hi Andrew,
    I have just recently started selling mobile replacement parts on Ebay, when I first listed the product , I sold couple of them quickly but after that it’s all gone quiet. I have re-listed my items with the option of automatcially relisting when the listing expires. Any advice or guidance will be greatly appreciated.

    Thanks
    Gazala

    1. Andrew Minalto

      Hi Gazala,

      Take a look at this guide first:

      http://andrewminalto.com/top-search-position-on-ebay/

      Thanks,
      Andrew

  38. Hi Andrew,

    I am new to this, but your site has already provided me with some great tips. thankyou 🙂

    This has probably been answered before, but having scoured HMRC website, can’t seem to find an answer to my questions.

    I have recently received several parcels from China, for future commercial resale (total value £641). How do I go about declaring these to HMRC and pay the VAT and import taxes?
    And are these taxes payable on receipt of goods, or can it be deferred until I submit end of year tax returns forms?

    Additionally, obviously they will still need to be declared, but will i need to pay VAT+taxes on items that arrived damaged and will be returned to supplier? If so, can this be reclaimed?

    1. Andrew Minalto

      Hi Mike,

      Thanks for your comment.

      When yo import goods from China, you have to pay VAT and import duty on goods value BUT not resell value. So you pay taxes on amount you paid to your supplier, not theoretical resell value.

      IF your supplier under declared parcels and you didn’t have to pay anything when receiving them, you have to contact HMRC and inform them about this fact so you can pay off related fees (VAT & import duty).

      For goods that go back to supplier – I think you can re-export them using special forms and get those taxes back but I have personally never done this myself so can’t really comment on the procedure. But I think it can be done, yes.

      Hope this helps Mike!

      Andrew

  39. Hi Andrew

    I cannot agree with you about Woodland Global as I used them door to door and they lost one of the parcels from China and have ignored my claim and do not return my emails. I used them on your recommendation!

    Regards
    Martin

    1. Andrew Minalto

      Hi Martin,

      Sorry to hear about that…. This is first time I hear bad things about WG but I guess no one is perfect and even they do make mistakes.

      Was your shipment insured?

      Andrew

      1. Martin

        Hi Andrew

        Yes it was insured with Woodlands and a Stuart Clark who works there is ignoring me. Not a professional way to run a business especially when you are putting your name to them.

        Regards
        Martin

      2. Darren Brundell

        Dear Martin,

        This is Darren from Woodland.

        I am very sorry that you do not feel happy about the service received from us relating to your missing carton. We pride ourselves on extremely high levels of customer service so I am keen to investigate.

        If you could kindly drop me over an email with a brief summary relating to the missing carton/claim I will find out more and have someone get back to you straight away.

        Darren.brundell@woodlandglobal.com

        Kind regards,
        Darren.

      3. Andrew Minalto

        You’re right Martin.

        I will try to find out what’s going on there.

        Andrew

  40. I thought import duty was calculated ONLY on the items cost. so isn’t it ($1000 x 1.7042) x 4.7%?, not $1170? Or have I got this wrong…

    1. Andrew Minalto

      no, shipping & insurance should also be included in amount import duty is paid on.

      Thanks,
      Andrew

      1. Peter Skeet

        my Australian internet girlfriend sent me a digeridoo – for obvious reasons – and I am not about to pay 60 pouds tax and extra charge for it. This is tyranny and I am about to rebel. I am not an importer but one who goes what the fuck is that tube…. oh oh I know I get it.

        So what is the Fascist state going to do about it if I dont pay?

      2. Andrew Minalto

        Hi Peter,

        You can simply refuse to accept that package and let them send it back, as simple as that.

        Andrew

      3. Yes, if I refuse to pay the import tax and the package gets sent back

      4. Andrew Minalto

        you won’t pay any extra fees in that case.

      5. If an item gets sent back who pays for the postage? Will the sender/exporter get billed again (+ handling fee if there is one)?

      6. Andrew Minalto

        Sent back like when you don’t collect package at all, refuse delivery?

      7. Alistair

        Aha. I’m learning 😀

      8. Andrew Minalto

        In this business, learning never ends, lol

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