3.1 How are import charges calculated?
Charges are calculated by Customs staff at the postal depots where the packages are received. However, in some cases special arrangements are in place for goods purchased on the internet (see paragraph 3.4 below).
Value Added Tax (VAT) - Import VAT is charged at the same rate that applies to similar goods sold in the UK and applies to commercial goods over £18 in value, and on gifts that are over £40 in value. The value of the goods for import VAT is based on the:
■basic value of goods, plus
■postage, packing and insurance, plus
■any import (Customs or Excise) duties charged
Customs duty - Customs duty becomes payable if the goods are over £135 in value but is waived if the amount calculated is less than £9. Customs duty is usually charged as a percentage of the value of the goods.
The amount of customs duty charged will depend on the type of goods imported and their value stated on the customs declaration CN22/CN23 (converted using the rates of exchange for the month of importation as shown on our website).
The percentage varies depending on the type of goods and their country of origin. Duty is charged on the price paid for the goods including any local sales taxes plus postage, packing and insurance costs. However, the cost of postage is excluded from the calculation for customs duty on gifts except where the sender has used the Express Mail Service (EMS) as opposed to a standard mail service.
Where the value of gifts is below £630 per consignment a flat rate of duty of 2.5 per cent will be applied, but only if it is to your advantage.
Excise duty - this is charged on alcohol and tobacco products and is additional to customs duty. The excise duty on alcohol products such as wines and spirits depends on the alcohol content and volume. In the case of wine and cider whether they are sparkling or still. Duty on cigarettes is based on a percentage of the recommended retail selling price plus a flat rate amount per 1,000 cigarettes. On other tobacco products, for example, cigars or hand rolling tobacco, excise duty is charged at a flat rate per kilogram.
3.2 Is duty charged on used goods?
Used goods are still liable to the same duty and VAT charges as if they were new. However, their value may vary depending on their age and condition.
3.3 How do I pay customs charges?
Royal Mail provides several options for payment and they will inform you of the options available and the amounts payable when they contact you. A postcard or letter is usually delivered to your address, detailing the amount due and the options available for payment. Once payment has been made, the package may be collected from the post office or if you have paid on line/by phone you can arrange for it to be delivered. Details of the charges, including the Royal Mail or Parcelforce Worldwide handling fee, will be shown separately on a label affixed to the package.
If the value of the package is over £2,000 or it is for a particular customs regime you will be sent a customs declaration form (C88 or C160) which you must complete and return to Customs at the Postal Depot before your package can be delivered. You should not send any payment with this form unless asked to do so.
3.4 Pre-payment of import VAT on goods purchased over the internet
UK Customs has special arrangements that allow some overseas traders to charge, collect and pay over to us the import VAT for goods purchased on the internet that would normally be chargeable at the time the goods are imported. These arrangements operate under Memoranda of Understanding (MoU) signed with certain overseas customs and postal authorities. The countries who have an MoU with HMRC are: Channel Islands, Hong Kong, Singapore and New Zealand. Overseas traders wanting to use this procedure must be authorised to do so by their authorities.
Once authorised, foreign businesses are issued with a unique authorisation number, which they must show on the customs declaration or packaging. Also they will include the statement 'Import VAT Pre-paid'.
Where these arrangements are used you will not be charged a Royal Mail handling fee when you receive your package.
If you are a VAT registered business and purchase goods for use in your business you should keep the outer wrapper and invoice from the supplier to support your claim to input tax.
3.5 Why do I have to pay a handling fee to Royal Mail?
If customs charges are payable upon importation, Royal Mail charge a handling fee to cover the costs for carrying out customs procedures paying any customs duties or VAT due and collecting it from you. If customs examination is required, or if information is missing from the declaration, Royal Mail open, repack and reseal the package. Royal Mail fees are itemised separately on the charge label and are collected at the same time as customs charges. As they are completely separate from any customs charges, any queries about them should be raised with Royal Mail or Parcelforce Worldwide as appropriate.
3.6 Where can I ask about or query a customs charge?
If you have any questions about a particular customs charge you should contact Customs at the postal depot shown on the charge label as soon as possible. If you write to Customs you should include as much detail as you can including, the customs charge label, the customs declaration and the part of the wrapper with your address on it. If your claim is about overcharged tax because the declared value of the goods was incorrect you will need to supply evidence, for example, an invoice, receipt of purchase etc., to support your claim.
Customs deal with thousands of packages every day and without this information we may not be able to trace your particular package in our records. If you telephone it will help if you have the package details with you. In the event of a claim you should retain all wrappings and documents until your claim is settled.
3.7 What can I do if I am not satisfied with the reply I receive?
If you think that your query has not been answered satisfactorily, or you have some additional information that may affect an earlier decision, please contact Customs at the postal depot again to try to resolve the matter.
3.8 What do I do if I disagree with a Customs decision?
If you do not agree with any decision issued to you there are three options available. Within 30 days of the date of the decision you can either:
■send new information or arguments to the decision maker
■request a review of the decision by someone not involved in making the disputed decision. Your request must be in writing and should set out the reasons why you do not agree with the decision.
UK Border Agency
Reviews & Appeals Team
PL6 5BZ , or
■appeal direct to the Tribunal who are independent of HMRC
If you opt to have your case reviewed you will still be able to appeal to the tribunal if you disagree with the outcome.
Further information relating to review and appeals is contained in factsheet HMRC1 Decisions - what to do if you disagree which can be obtained from our website or by phoning 0845 900 0404