As we approach Christmas, you may start receiving gifts from friends and family from overseas. Depending on the value of those gifts and how they have been sent, you could find yourself landed with a fee-to-pay card from the Royal Mail.
Most goods coming into the UK from outside the EU are liable to one or more of the following taxes: Customs Duty; Excise Duty; Import VAT.
If you are sent a gift with a value of £39 or less, it will be free from Customs Duty and import VAT. Customs duty becomes payable only once the value of the goods rises to £135+.
For the goods to qualify as gift they must be:
Within these limits, there are also low quantity restrictions for gifts of alcohol, tobacco and perfume. However, there is no relief from Excise duty on alcohol or tobacco products.
If you are sent gifts to different people in the same house they can be combined in the same package. However, each present must be individually wrapped and addressed to a specific person who is listed on the Customs declaration to benefit from the gift allowance.
So, if you are sent five gifts each worth £39 for five different people in one package, so long as they are wrapped, addressed and listed separately on the Customs declaration, no Customs duty or VAT would be due on the whole package.
If each of those five gifts were worth more than £39, they would each be subject to VAT. But as they are also worth less than £135 each, Customs duty would not be required.
Here’s a summary position on the duty and VAT due on gifts
|Gift Value||Customs Duty||Import VAT||Excise Duty|
|£0.01 to £39||✘||✘||Excise duty will be due on all alcohol and tobacco products even if they are gifts.|
|£39.01 to £135||✘||✓|
|£135.01 or greater||✓||✓|
I always get quick, clear and definitive responses from the Harwood Hutton tax team – commercial answers to commercial issues.Robin Berry – Morgan Management
Right from the outset Harwood Hutton gave us direction and great advice – and that advice has evolved over the years as we’ve grown. We’re both medium-sized companies providing a bespoke service – one furniture, one accountancy – and the relationship works.Andy McCarron, McCarron and Co
I’m deeply impressed with Harwood Hutton’s extensive knowledge of tax arrangements for residential and commercial property landlords.Qadeer Ahmed, MD, ABA Finance
They really took their time to understand what was important to us and our business and the expertise we required. Whoever we speak to at HH, we get the same fantastic response and technical input. It’s a real partnership.Edward Finch, group MD, MRIB insurance brokers
I have worked with the directors at Harwood Hutton on a number of mutual client matters over many years. The reassurance of their clear, commercial and focussed advice is one of the main reasons I regard this as one of my most valuable professional relationships.Frank Wessely, Partner, Quantuma LLP
Harwood Hutton never seem to rest on their laurels. They are always seeking out new avenues and ways to improve their offering. A very forward-thinking company with staff who are always well briefed and who approach each task with drive.Karl Austen, MD, Surefoot Communications
We have engaged Harwood Hutton in several areas of structuring, including VAT issues, decoupling an SPV from a group structure and HMRC clearance for a transaction. The team have exceeded all expectations by being proactive, measured and very thorough.Adam Fawsitt, Director, FHT Limited
We moved to Harwood Hutton as they delivered a succinct and professional proposal. If anything, we have been more impressed post-move. They are a fantastic company to work with. They do truly differentiate. They have the skills and capabilities of a mega firm but with a personal service.Edward Finch, group MD, MRIB insurance brokers
Join our mailing list to receive important news and insights for business leaders and private individuals