Buyers must factor in import prices on online sales, warns HMRC

HM Revenue & Customs (HMRC) said it wanted to "remind" members of the public who may be considering buying-in foreign goods for Christmas that some purchases may be subject to charges such as VAT and duty.

"We know many people like to go abroad at this time to buy their Christmas gifts, or buy online from non-EU countries, and think that the ‘cheaper’ price they see is always the price they finally pay," Angela Shephard, HMRC's head of customs policy said in a statement.

"HMRC is keen to remind the general public how much they can actually bring back from abroad or buy from an online overseas seller without having to pay import duty or VAT. You don’t want to be faced with unexpected extra charges, when you thought you had found a bargain," Shephard said.

HMRC said that consumers buying goods online or via mail order from non-EU traders have to pay VAT on packages worth more than £15. Goods worth over £135 could also trigger customs duty charges, "although this will depend on what they are and where they have been sent from," HMRC said.

"Where, however, the actual amount of duty due is less than £9, this will not be charged," it said.

Customs duty is a tax on goods imported into the UK from non-EU countries whether by individuals themselves or through the post, although individuals bringing the goods in personally do not face charges on amounts below the duty-free levels. The amount of customs duty that is applied to goods varies substantially according to what those goods are and their value. HMRC has approximately 14,000 different classifications for goods subject to customs duty, with average charges of between 5% and 9% typically placed on the value of goods, but with the range of duty spanning between 0% and 85%.

Excise duty on alcohol and tobacco "always applies" to online or mail order sales, HMRC said. Excise duty is factored into the price of certain goods sold in the UK and generally levied on those goods brought into the country from non-EU countries. Duty-free limits do enable small amounts of alcohol and tobacco to be brought back into the UK from outside the EU by individuals personally without excise duty being charged on the value.

UK consumers also face charges for non-monetary gifts worth more than £40 they receive from other individuals who have ordered the goods from companies based outside the EU, HMRC said. The tax that would apply in those circumstances is import VAT.

Import tax is generally applied on top of standard VAT charges when goods are bought from non-EU countries and 'EU Special Territories', which include the UK Channel Islands and Spanish islands such as Tenerife and Lanzarote. Import VAT has to be paid by the recipient of the goods before they are supplied although the charges will not apply to goods bought online if the value of goods being delivered is below a certain value.