Have you ever been stung with a customs charge bill after ordering from a retailer abroad? You’re not alone. When shopping online from international sites, UK residents could be liable for certain fees before their purchase is allowed in the country.
Because of these fees, sometimes it feels like shopping internationally is more expensive than shopping at home.
While it’s true some charges are ‘extra’, mostly, it’s just that people are used to having all the necessary taxes included in the final cost.
So what are customs charges, why are they not included in the price, and why do you need to pay them?
Why have I been charged?
All items imported into a country need to be tracked and paid for, whether you order personally or for your VAT-registered business. Couriers do this on behalf of companies and consumers in the UK. They have to present all items to the Border Force and calculate all customs charges.
The rates depend on the following:
- Type of goods
- Value of goods
- The country of origin
The couriers need to pay customs duty and import VAT to take the package and deliver it to you. They do so on your behalf, so you are essentially reimbursing them when you are charged.
How can I avoid paying customs charges?
Bad news. Unfortunately, there isn’t a way of avoiding it. They have to be paid, and a courier company pays them on your behalf. If you do not reimburse them, you will not receive your package.
Usually, couriers in the UK wait up to three weeks to receive the payment. If they don’t receive anything, they either return the package or destroy it.
What are customs charges made up of?
They comprise customs duty, import VAT, handling fees, and – if applicable – excise duty.
What is customs duty?
Customs duty is a fee charged for an imported item. It is calculated as a percentage of the total value of the goods.
In the UK, for orders under £135, you shouldn’t have any extra costs. The only fee you will need to pay is postage or packaging and potentially Import VAT.
On the other hand, any order over £135 is subject to customs duties and other expenses.
What is import VAT?
Import VAT is a tariff on goods purchased outside the UK. Instead of paying VAT at the checkout, you need to pay VAT when the item enters the UK. This is because when shopping from an international retailer, they mainly do not include UK VAT in their prices.
The Import VAT in the UK is 20%.
Import VAT also applies to sending and receiving gifts, but the threshold is lower. If the value of the gifts is £39 or less, import VAT won’t apply. For gifts over £39 but under £135, Import VAT is added to the value of the gift. Once you go over £135, gifts are treated as if you bought them yourself – all additional costs apply.
Excise duty
People who order alcohol or tobacco products need to pay excise duty, which is non-refundable. Alcohol and tobacco duties differ depending on the product. In this case, the cost of the goods imported doesn’t play a role, and you pay duties for these products.
You can use trade tariff codes to check duty rates on these imports. When ordering such products, keep in mind that Border Force can seize your goods if they are:
- Cigarettes and tobacco without UK health warnings or fiscal marks
- Spirits over 35 centilitres without a UK duty stamp
So, when ordering such goods, make sure they don’t fall into these two categories. Otherwise, they may not enter the UK.
Courier handling fees
Couriers such as Parcelforce or DPD deliver anything you order abroad directly to you.
Since couriers cover your customs fees and work with HM Revenue and Customs (HMRC), they’ve introduced handling fees – costs you need to pay for their services.
Unlike customs duty and import VAT, courier handling fees are non-refundable if you want to return your package.
Different couriers in Britain have different fees. DPD is the least expensive, with a handling fee of £5, whereas DHL, UPS, and FedEx charge £11, £11.50, and £12.50, respectively, or 2.5% of duty+VAT, depending on which amount is higher.
How to calculate import duty and pay customs charges
Before you even order products online and your goods arrive, you can calculate your import duty. We have an import duty calculator that helps estimate customs costs upfront. You can use it:
- Before you order
- When you want a refund following a return
- To check whether you’ve been overcharged
Using it is very simple. All you have to do is enter the cost of purchase and product description and select a courier. The calculator will show your duty fee range, VAT, and the non-refundable courier handling fee.
How do I pay customs charges?
Any imports that enter the country has to be declared to UK customs authorities. UK customs check that the parcels comply with International trade laws, usually within a few hours.
After it is done, the courier service will contact you to say how much you owe and send you the billing information for paying online.
The billing information will contain the link you will use when paying fees.
Which customs charges are refundable?
If you’ve returned an item to a retailer abroad, you could be eligible to have some customs charges returned too.
You can request duty and VAT refund for any order over £135 you returned abroad, but not all charges are refundable.
There’s also a statute of limitations for when you can request a refund following a return. Customs duty and VAT for unwanted items have to be reclaimed within 90 days of the item entering the UK. Damaged or defective items have to be claimed within a year.
You will get customs duties and Import VAT returned, but once you pay handling fees, you cannot get them back.
Reclaiming customs charges with HMRC
You can also reclaim import duty and VAT on your own.
But, a lot of people who commit to it give up after some time because they don’t get timely responses from HMRC, and they need to put in some work to collect everything.
If you want to do this independently, here’s how it works:
- Contact the store and ask for a confirmation letter
- Find and send the original invoice
- Get Import paperwork from the courier
- Fill in the C285 form
- Print the online form and send it
Some questions they ask here won’t match the documents you will receive from your courier, which means you may struggle to find the info.
There are around 40 questions that you have to answer to proceed. If Royal Mail or Parcelforce delivered your parcel, you might also have to fill out the BOR 286.
You have to print and send the form via post to HMRC, along with other paperwork for review.
You can understand why more UK citizens don’t even try to reclaim their charges.
Many give up on the start, especially if the customs charges are lower. Under the condition that you have filled everything correctly and provided all the paperwork, you can expect to get the money back, but that’s not certain.
Your claim can get rejected, after which there’s not much you can do. HMRC doesn’t have to provide you with any feedback and justification for their decision.
The other option is to use Duty Refunds, which is hassle-free and has no fee if your claim isn’t successful. As the first and only online import duty and VAT refund platform for UK shoppers – we’re experts at getting money back that is rightfully yours! We have successfully claimed refunds on returned goods worth over £500,000. When your claim is successfully paid by HMRC we’ll pay it into your bank account minus our 15% fee.
About Duty Refunds:
As the first and only online import duty and VAT refund platform for UK shoppers, Duty Refunds has helped customers refund their purchases amounting to half million pounds and is rated 4.9 excellent on Trustpilot. We also work extremely closely and are integrated with courier companies (eg: DHL, DPD, Fedex and Parcel force) and HMRC.
At Duty Refunds, we believe returning an item should be just as easy as buying it in the first place. Money and time should be spent on enjoying the fun bits of shopping and unboxing. If you need any help on duty & tax refund for your international shopping return. Please feel free to chat with us through our live chat, or fill in our online form in 5 mins and start your claim straight away.
