Understanding Duty on gifts - HELP

In the past I have sent a coupe of gifts to family or friends in the UK and I honestly cannot understand the calculation of TAX

The ruling is governed by Duty on Gifts

3. How Much Duty is Required on Gifts That Are Mailed and Who Pays?

If the value of your gift is more than the duty free allowance for mailed gifts of £135, the recipient pays the duty after the goods arrive in the UK but before they are delivered.

Generally, on amounts of between £135 and £630, the rate of tax is 2.5%.Duty is waived if the amount due is less than £9. The tax on gifts worth over £630 varies, depending upon the type of goods and their country of origin.

It’s impossible to give a general figure for the rate of duty as, unbelievably, there are 14,000 different classifications of goods with different rates of duty for each based on their country of origin. The average is between 5% and 9% of the value of the goods but it ranges from 0% to as high as 85%. Your best bet, if you are sending gifts worth more than the £135 horizon, is to check with the UK Customs and Excise helpline.

Item 1
I sent a partially completed scale model boat to a friend as a gift. The value would not have been greater than 100GBP but he ended up paying 50quid to get it out of customs. At 50GBP the value must have been greater than 630GBP as 2.5% of 630 is 15.75 GBP……………………go figure??

Item 2
I send a wooden jewellery box to my sister as a present. It was hand made by myself but she ended up paying 30 quid to get it out of customs. Again the value would have been less than 630GBP

There does not seem to be any reason for these valuations

Net time use amazon.co.uk !!!

Is the UK tax man so short of money they have taken to highway robbery

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Hi @Phoenix,
You have asked a wonderful question. From a compliance perspective yes we must follow what the website says, but in reality it looks different since they are charging duties more than what can be calculated. On the other hand, I checked that you can ask them for duty refund, if it has been overcharged, I read the below:

If you’re charged too much or return your goods

Ask for a refund of VAT or Customs Duty if you:

  • return your goods
  • think you’ve been charged too much

Download and fill in:

  • form BOR 286 if Royal Mail or Parcelforce delivered the goods
  • form C285 if a courier or freight company delivered the goods

This may be an issue of the type of company that you used to send the goods. If it was a courier (DHL, UPS or FedEx for example), they have to make and lodge a customs declaration. This is a commodity service that is pretty much the same whether the goods subject to the declaration are a private jet, a container of computers or a model boat. The average cost for such a service in the UK is just under £50 per movement (though couriers are generally much lower) and it is possible that the charge you have received combines both the fee for the declaration service and the tax charge that flows from it. Remember also that imports to the UK suffer not only customs duty at a rate typically below 5%, but also VAT at a standard rate of 20%.

Yes I would not be surprised if the courier also adds a fee for just processing the declaration. I just paid DHL £50 for “Duty & VAT”, pretty sure there should be no duty on my item given the value is so low, but seems to be their standard fee.

As far as I know I did not use a courier. It was from Australia Post to UK Post Office

Don’t forget that the value they use to calculate the duty also includes the shipping cost, and you also have VAT to pay which is typically 20% (unless stated otherwise in the tariff).

Hello Phoenix - the costs payable in the UK depend on a few factors:

  • Shipping method used - courier (Such as TNT or UPS) or Postal Service (Airmail)
  • Item Value (as declared on CN22 form or invoice)
  • Item commodity (was the item is)
  • how it is declared (gift or commercial sale)

If an item declared as a gift is sent to the UK via the postal service it would need to be £39 or less to be free from local Duty and VAT - this does not apply to excise goods (alcohol, cigarettes etc.)

The problem with goods over the value of £39 is not necessarily the amount of duty and VAT which would be applied it is the customs clearance or administration fee that gets added on. The difference can be huge - Royal mail charges £8 + any duty or VAT - UPS & TNT will be around £30 customs clearance + Duty and VAT. You can view the government guidelines here: https://www.gov.uk/government/publications/notice-143-a-guide-for-international-post-users/notice-143-a-guide-for-international-post-users

The commodity (what the goods are) defines the duty rate. Quickly looking - a model kit of metal has a duty rate of 4.7% , wooden jewellery box could be 4%.

All costs would be billed to the addressed party (receiver).

To avoid costs on future keep the value under £39, ensure ‘gift’ is selected on the CN22 (Customs declaration) form and send via the postal service. Note if you declaring the value using a currency other than £ sterling the exhange rates can fluctuate.

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