Gifts purchased online from non EU suppliers could not only incur customs duty but could be subject to VAT and a handling charge warns Alan Pearce at London Chartered Accountants Blick Rothenberg LLP.
Alan, a VAT partner at the firm, said: “Buying goods online from outside the EU may not always result in the bargain price expected. Buyers need to check the website’s terms and conditions to see if the price paid includes all UK import duties and VAT. If it doesn’t, then an additional VAT charge of 20% could apply and there may also be an administration charge levied by the delivery company for processing the collection of the import taxes.”
He added:”Many people realise that there may be customs duty to pay on a gift but do not realize that they may get an additional VAT bill of 20% if the gift they have purchased is over £36.00, plus a handling charge.
“Make sure if you are buying gifts online from non-EU suppliers that the website price includes any Customs Duty and Import VAT or you’ll end up with a tax bill from the Royal Mail or parcel company before the gift arrives.”
Pearce said that often there would be a delay once the parcel arrived while the charges were calculated and then a bill would be sent in the post to the recipient with the amount of VAT and any handling and other duty charges.
He added: “If people are buying from abroad or indeed receiving a Christmas gift from relatives it might still be subject to VAT.”