Reducing the cost of online shopping

14 November 2008

HM Revenue & Customs (HMRC) have announced changes to import duties, which should make it cheaper to purchase goods from outside the EU. The following in an excerpt from HMRC’s website:

From next month, internet shoppers will no longer have to pay customs duty on non-EU purchases worth up to £105.

Customs duty is currently payable on goods bought online from non-EU countries worth £18 or more. But from 1 December, the new £105 limit will apply. VAT will still be charged on goods over £18, and is not affected by the changes.

A new HMRC 'internet shopping' podcast, launched today, explains the changes in more detail. As well as duty and VAT, the podcast discusses handling fees, which mail carriers are entitled to charge and collect from you on delivery, where duty or VAT is payable. The podcast is available to download free from http://www.hmrc.gov.uk/podcasts/

HMRC's Director of Customs & International, Doug Tweddle, said:

"Whether you're looking to get your hands on the latest computer game, designer clothes or DVDs, it's important to be aware of the law on customs charges, especially as this is about to change.

"If you're thinking of doing a little web shopping from abroad, download our podcast or visit the HMRC website and get up-to-speed with all things online - it won't cost you a penny.

"If you're buying goods from countries outside the EU, it's in your interests to know what the rules are. For example, some websites don't always make clear there is duty or VAT to pay, while others may misrepresent or undervalue your goods to try and avoid paying charges. But, if goods are found to be wrongly declared, they may be seized and the customer penalised."

On Monday 1 December, the limit for customs duty imported from non-EU countries will increase from 22 euros (£18) to 150 euros (£105). The limit for VAT is not changing and will stay at 22 euros (£18).

Examples Price Will I pay duty? Will I pay VAT?
DVD 16 euros No No
Digital camera 140 euros No Yes
Designer shoes 450 euros Yes Yes

Notes

1. The lower limit for Import VAT is not being raised and will still apply at the existing level of 22 euros (approximately £18). Excise duties, where applicable, will also be unaffected.

2. Customs duty is charged on most goods imported into the EU. The rates are set out in European Community legislation and in the Customs Tariff, which classifies the goods and gives the rate of duty.

3. All non-EU goods imported into the UK are subject to import VAT. It is charged at the appropriate rate that applies to identical goods sold in the UK.