How to avoid import taxes on a parcel from the US to the UK.

September 15, 2011 2:38 PM

How to avoid import taxes on a parcel from the US to the UK.

I'm about to order $1000 worth of custom embroidered hats from the US to be delivered to here in the UK. I'd like to try and avoided paying a crazy amount of import tax if possible. What needs to be on the box to make this happen? I've heard promotional items don't get taxed (the hats are promotional items), obviously there is the whole "gift" thing, however I don't think that works for high value items. I'm sure I read you can be charged tax on anything over £14.

My friend recently got stung £180 for 300 vinyl records from the US via parcelforce, ontop of paying $750 for them to be shipped anyway, expensive business!

posted by rinsemedown to law & government (12 answers total)

Here's your answer and although IANYTA for a boxful of hats I think you are SOL.
posted by cromagnon at 2:49 PM on September 15, 2011

Import VAT is charged on the total value of the goods which includes the shipping costs. The more you reduce your shipping costs, the more you reduce your VAT.
posted by grouse at 3:01 PM on September 15, 2011

Shipping is only going to be $20
posted by rinsemedown at 3:04 PM on September 15, 2011

Yeah, as someone who orders expensive things online from the US, your only real option is to ask them to mark the value of the box down. Which is technically illegal. Marking it as a gift won't work (people have been charged shipping their own stuff from the US to the UK)

And the tax is HIGH. Budget for like 20% in my experience, though YMMV.
posted by stillnocturnal at 3:15 PM on September 15, 2011

A real answer would probably depend on knowing how many hats and how big and heavy the box is going to be, and how it's being shipped (USPS, FedEx, UPS). For example, there are several places in China that ship $50-200 worth of goods to countries all over Europe and N. America via airmail or EMS that zip right through customs labelled "Toy Box, value $14"

The problem with, say, asking the seller (if they'll even do it--it is a crime even if people are rarely stung for it) to enclose a packing slip indicating every hat is worth <$1 and indicate on the customs form that the whole box is worth only $20 total is that you cannot insure it for anywhere near the full amount. This might not matter if you get regular shipments worth around $40-50 but you might not want $1000 worth of custom-made hats going uninsured and you really don't want to do that close to Christmas or close to a time when any union connected with their transport is striking.
posted by K.P. at 3:27 PM on September 15, 2011

Depending on where in the U.S. your goods are coming from, you may be able to (legally) avoid paying U.S. sales tax, which may take 5-10% off the price.

But you should pay the UK VAT and import duty. It pays for hospitals and schools and roads and things like that. If you don't like it, vote for a someone who will eliminate sales tax and import duties, move to a country that doesn't have them, or order your embroidered hats from somewhere in the EU.

If you insist on tax evasion, you might want to have this question anonymized, since what you're trying to get advice on is how to break the law.
posted by caek at 4:17 PM on September 15, 2011 [2 favorites]

I think the tax-free status for promotional items is for things being sent to you for promotional purposes - not things you will buy. I'm afraid you'll have to pay 20% VAT and customs duty (you will have to check with customs to calculate this). Seeking to avoid this could lead to serious hot water - it is easily a criminal offence.
posted by prentiz at 11:51 PM on September 15, 2011

Entirely legal and no need to lie: ship it through the regular postal service.

UPS, FedEx and other private shipping services ALWAYS charge customs. ALWAYS. Including on $20 packages. I learned this the hard way (and it was confirmed by the deliveryperson that they ALWAYS charge customs now).

Regular postal service is more lax. But if they're genuinely worth $1000, then I hate to say it, but there is one reason (among others, or course) for customs being charged – so that people take a closer look at local sourcing options.
posted by fraula at 2:16 AM on September 16, 2011

Not sure what you mean by 'regular postal service' - I've had many packages shipped with the USPS for which I've been charged customs. The last one was a flat-rate envelope of fabric, which was if I remember rightly only just over the threshold.
posted by mippy at 4:33 AM on September 16, 2011

Yes, fraula's advice is simply not true. It's not the carrier that levies the VAT and duty when something enters the UK.
posted by caek at 4:44 AM on September 16, 2011

UPS, FedEx and other private shipping services ALWAYS charge customs. ALWAYS. Including on $20 packages.

UPS and FedEx charge a "brokerage fee" on packages worth $20+, but that has nothing to do with customs; it's just their own charge for ?? on top of any actual customs charges you may pay. It is not disclosed when you are getting a shipping quote from them; be very wary of those companies for sending anything to another country if you don't know the score with the "brokerage fee."
posted by kmennie at 5:11 AM on September 16, 2011

What fraula says is practically true. The express carrier (their Customs broker actually) will calculate the amount of VAT/duty that is due, pay that amount to HMR&C and then bill that amount to their customer (either the shipper or the consignee depending). The VAT/duty is much more consistently assessed and collected on shipments moving via the express carrier than it is on shipments moving via the postal service. If the express carrier doesn't do things correctly HMR&C is much more likely to fine them than they are the post office (if that is even possible). The result is that postal services are much sloppier about collecting duties and taxes. Still, the UK postal service is one of the ones that is more likely to collect the duty and tax so far as postal services go.
posted by Carbolic at 11:00 AM on September 16, 2011