I ordered goods online in the first week of January including an iPhone case, a power bank and an iPad case. I received an email that said my ord
I ordered goods online in the first week of January including an iPhone case, a power bank and an iPad case.
I received an email that said my order included free shipping and VAT paid at 20 per cent. The goods were subsequently shipped from Holland and delivered by UPS.
However, I was then charged both Import VAT and a brokerage charge by UPS. Have I paid VAT twice? Via email.
New Brexit rules means there are higher charges on items coming in and out of the EU
Grace Gausden of This is Money, replies: There has been much discussion about the price of sending items from the EU into the UK and vice versa.
Since Brexit, many consumers have had to contend with extra shipping charges and import taxes when buying items from the Continent.
Meanwhile, some UK-based businesses have notices up on their websites stating that they’ve paused international deliveries because of Brexit.
You were charged £46.09 on a £166.76 order by UPS. However, your invoice from the firm you purchased goods show the VAT was included – as were the shipping costs.
Most goods arriving in the UK are now liable to either Customs Duty, Excise Duty and Import VAT – and sometimes all.
As the UK is no longer part of the EU VAT regime, the Government is applying VAT at 20 per cent on goods from the EU.
These taxes must still be paid if you purchase the goods or receive them as a gift, the goods are new or used or the goods are for your private use or for re-sale.
The rules now state that goods purchased valued at £135 or less are free from Customs Duty and not subject to Import VAT.
However, this does not include alcohol, tobacco products, perfume or toilet waters as these items are excluded from the relief of Customs Duty and VAT at import is payable.
Meanwhile, if you are sent a gift with a value of £39 or less, it will be free from Customs Duty and Import VAT.
Consumers sending packages to the EU must now also complete a customs declaration which will be fixed to the package in most cases.
In your situation, however, it does sound like you have been charged VAT twice.
Fortunately, after contacting your retailer about this later on, you were refunded the VAT amount.
The new taxes means customers have been working out whether they are charged correctly
Sue Rathmell, VAT Partner at McIntyre Hudson replies: With Brexit, HMRC changed the rules regarding B2C sales of goods from outside the UK to a consumer within the UK.
From 1 January 2021 if the goods cost less than £135, then there is no import VAT payable. Instead the overseas seller must register for VAT in the UK and account for UK VAT on the sale.
If the sale was made via an online marketplace, then the marketplace is responsible for paying over the UK VAT on the sale.
If the goods cost more than £135, then import VAT will be chargeable when the goods enter the UK and so VAT should not have been collected by the seller.
In this instance, it sounds like UK VAT has been collected by the seller and import VAT has been collected by UPS. You should contact the seller and query why they have been asked to pay two lots of VAT.
A UPS spokesperson replies: To help avoid surprises, we recommend that businesses alert their customers when shipments are subject to customs duties and taxes payable by the recipient.
Grace Gausden, This is Money, adds: Before purchasing a product from the EU – or anywhere else abroad – it will be worth checking the terms and conditions to see what fees might apply.
If you do get charged extra, it is well worth querying it with the retailer as you did – and got the refund.
Sometimes it may look like a UK website, but the items could be shipped from abroad so if there are any doubts, contact the retailer before purchasing.
If you are unsure of whether an item you have received or sent to or from the EU has been taxed correctly, contact your local Post Office and the retailer you purchased the product from to find out more.