Should I pay VAT on an item shipping to the UK from the USA?

July 24, 2009 7:13 AM

I just bought an item online. I am in the UK. The seller is in the US. Payment was made through Paypal and I was charged VAT (UK Sales Tax). Is this a mistake?

Google searches are throwing up conflicting information. Since the seller is in the USA then can they claim VAT? Has Paypal automatically added it to the total amount due just because I am in the UK?

I assume that I am due a refund but am not sure if I should be approaching the seller or Paypal themselves in order to get one.

Can anybody shed any light on this? Cheers.

posted by Del Chimney to shopping (3 answers total)

You probably paid through the UK subsidiary of Paypal, which will be obligated to charge VAT on transactions it processes.
posted by Happy Dave at 7:20 AM on July 24, 2009

Yes, thought so, you're paying Import VAT - see here.
posted by Happy Dave at 7:30 AM on July 24, 2009

Yes, thought so, you're paying Import VAT - see here.

Paypal should not be charging you import VAT. That's handled by customs when your package arrives in the UK.

Customs Duty
If you’re ordering or buying goods from outside the EU, any Customs Duty must be paid by the recipient once the goods have arrived in the UK but before the goods are delivered.

Import VAT
If you’re ordering or buying goods from outside the EU, Import VAT must be paid by the recipient once the goods have arrived in the UK but before the goods are delivered.

In addition, there may be a handling fee to pay to the carrier. Follow the link below to find out more.

[source]
posted by missmagenta at 9:01 AM on July 24, 2009