UK Shipping Info
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Many people importing goods into the UK for the first time are surprised at the amount of tax which they can be required to pay.To help avoid unpleasant surprises, below is a brief outline of how the UK import taxes are calculated.
All goods imported into the UK from outside the UK are subject to Customs Duty (Import Duty or Import Tax) and Value Added Tax (VAT). All goods imported into the UK from outside the EU must be declared to HM Customs & Excise and in most cases, this includes goods bought over the Internet.
Import Duty rates are set annually by the EU, and run from 1st January to 31st December. They are published by each EU country in a "Customs Tariff". The UK version is published in three large loose leaf binders, allowing for constant updates to be inserted or substituted.
The Customs Tariff groups all goods into various classifications in order to arrive at a rate of Duty. The broad classifications are divided into 21 sections, which are divided into 97 chapters. There are approximately 14,000 sub-classifications. Each classification is identified by a ten digit code number.
Import Duty is usually percentage based. It averages at between about 5% and 9% - but with extremes in some cases between nil and 85%.
Customs assess the amount of Import Duty to be paid based on the declared value of the goods, PLUS the transport costs to the country of destination.
VAT (Value Added Tax) is then added. The value for VAT purposes is therefore the declared value of the goods, PLUS the transport costs to the country of destination, PLUS the Import Duty
Example of Import Duty and VAT calculation:
| £ | £ | |
| Tax | ||
| Value of goods say: | 100.00 | |
| Shipping or postage costs to the UK, say: | 15.00 | |
| Total value for Import Duty: | 115.00 | |
| Import Duty payable at say 5% on £115.00: | 5.75 | 5.75 |
| Base value for VAT (Value Added Tax): | 120.75 | |
| VAT on £120.75 @ 17.5%: | 21.13 | 21.13 |
| 141.88 | 26.88 |
Therefore in this example the total Import Duty and VAT charges payable on importation of these goods would be £26.88 - or a tax rate of 26.88% on the original £100.00 price of the goods.
From this it can be seen that in most cases Value Added Tax will be the largest tax to pay on importation.
VAT: The 2003 UK rate is 17.5%. Vatax.net
Import Duty: Note also the rate of Import Duty will vary according to the type of goods imported and/or the country of origin.
Remember that your carrier or import agent (including Royal Mail or Parcel Force) may also charge you fees to clear your products through customs.
The person receiving the shipment is legally obliged to pay Import Duty and VAT. Private individuals intending to buy goods on the internet from non EU countries should be particularly careful. The price advertised on the seller`s website will not include UK Duty and VAT but YOU WILL BE EXPECTED TO PAY THIS WHEN THE SHIPMENT ARRIVES IN THE UK.
If you are VAT registered you may be able to recover the VAT. But Duty and administration costs are not recoverable.