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    Fee to pay: the card no-one wants

    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:

    • Described as gifts on the customs declaration
    • For an occasion
    • Bought and sent between individuals
    • Intended for personal use

    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 ✓ ✓

     

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