Think gifts over £39 will attract VAT.
https://www.gov.uk/government/public...nal-post-users
I am getting some cycle wheel rims and a couple of other new old stock bits sent to me from a friend in Italy. The value of them is around £120. They are to be declared as a gift
I know that there is a threshold of £135 above which anything whether a gift or not attracts 20% vat but what is the situation with gift items under that value.
I bought some items last week on eBay from the Netherlands at £100 and eBay collected the 20% vat from me but I’m unclear on the rules with gifts at values below £135
Has anyone any experience of the process
Think gifts over £39 will attract VAT.
https://www.gov.uk/government/public...nal-post-users
Last edited by Kingstepper; 16th May 2022 at 20:52.
As long as your friend declares them honestly on the customs declaration then you'll be hit for VAT (and courier's handling fee) on import at that value. Possibly Customs Duty too, although I don't know what rate bicycle parts might attract, if any.
This, https://www.gov.uk/trade-tariff, will allow you to find what Customs Duty rate (if any) will apply. If you can be bothered to work it out.
Of course, that's if your friend completes the CN22 honestly. Perhaps they were only worth £10.
For the avoidance of doubt, I am not advocating dishonesty. That would be a Bad Thing.
** edit **
Crossed out as incorrect. No Customs Duty will be due. Thanks to jukeboxs for the correction.
Last edited by markrlondon; 16th May 2022 at 21:44.
Google is your friend.
https://www.gov.uk/government/public...nal-post-users
The OP clearly states the value at c£120.
Last edited by markrlondon; 16th May 2022 at 21:57.
Well having followed the link to the advice document I’m still no clearer on it really.
At the bottom of section 2.3 in the table it shows items up to £135 no Customs Duty - No import VAT But then in section 2.4 it states gifts of a value above £39 are subject to Import VAT.
Am I understanding this correctly that if something is purchased from abroad and is under £135 then it is for the seller there to collect the VAT, if it is over £135 then the VAT is collected on arrival. In the case of a gift then anything over £39 attracts VAT on arrival in the UK?
In my case because the item is worth £120 whether it is shown as a commercial purchase or a gift makes no difference it still attracts import VAT.
No, if yours was a commercial purchase it would be subject to supply VAT (collected by the seller) not on import (collected by HMRC). Obviously a private person sending a gift will not be registered and cannot collect supply VAT.
In practice though your item, gift or not, because over £39, will be subject to VAT of some sort just would be collected differently if a gift or not.
The language used is both precise and confusing. The reference to "No Import VAT" in the table at that point means that "UK supply VAT" should be charged instead by the seller on non-gift items valued at £135 or below.
In practice, if the seller can't do this (e.g. if it's a private sale taking place outside of a market (such as eBay) which would charge the VAT on the seller's behalf) then import VAT is charged at the time of import in the traditional way.
For gifts, section 2.4 is the part to consider which confirms that VAT will be charged on shipments valued at more than £39 and Customs Duty (if due) will be charged on shipments valued at more than £135. These taxes will be charged at the time of import (and so a courier's service fee will be due as well).
The following is my understanding.
For non-gifts (ignoring items that attract Excise Duty):-
(1) If the shipment is valued at £135 or less then HMRC would like the foreign vendor to collect UK VAT and remit this to HMRC. A vendor can either register to do this themselves or, if they are selling through a marketplace like eBay, then the marketplace can and will do it.
(2) If the shipment is valued at more than £135 then neither the seller nor marketplace will collect the VAT for HMRC. Instead it will be charged as and when the item enters the UK, in the old fashioned way.
(3) If the shipment is valued at more than £135 then Customs Duty may or may not be due too when the shipment is imported, depending on the category of items in the shipment.
(4) In fact, foreign vendors can also register for UK VAT and can therefore charge UK VAT on items valued at over £135, just as a UK-based VAT-registered vendor would do. Some companies have done this, others have not. Most haven't.
For gifts (again ignoring Excise Duty items):-
(1) If the shipment is valued at £39 or less then no VAT will be due.
(2) If the shipment is valued at £135 or less then no Customs Duty will be due (if any was to be due).
(3) As far as I know, the sender cannot prepay any VAT or Customs Duty. This means that if any is due then it will be collected at the time of import in the traditional way (and a courier's service fee will be due).
Simples!
Correct me if I'm wrong anyone. :-)
Yes.
Yes.
Thanks I think collectively you have about clarified it for me.
Obviously the lower the value shown on the shipping document the less VAT it will attract which I suppose would lessen the bill but create problems recovering the value of the goods if they go missing. We have exchanged vintage cycle parts for quite some time at no cost other than shipping but it could end up where the VAT element makes it prohibitive without drastically down valuing the goods on the shipping document.
Last edited by markrlondon; 16th May 2022 at 23:23.
This is a natural assumption in general. The difference between "import VAT" and "supply VAT" is a fine distinction which, in fact, has no significance at all to non-VAT registered recipients.
From most people's perspective, it is only worth noting the difference when trying to parse HMRC guidance notes.
Ah the gift that just keeps on giving!
Everything imported into the UK regardless of value,sale or gift attracts VAT on entry.
The UK has abolished LVCR (was 22 then 15 now zero) due to abuse from the channel islands.
If you were sending a gift worth less than 39 to your friend that would not attract VAT when it entered the EU, but anyting going this way will.
https://www.gov.uk/goods-sent-from-abroad/tax-and-duty
VAT
VAT is charged on all goods (except for gifts worth £39 or less) sent from:
- outside the UK to Great Britain
- outside the UK and the EU to Northern Ireland
VAT is not charged on goods that are gifts worth £39 or less.
You pay VAT when you buy the goods or to the delivery company before you receive them. If you have to pay VAT to the delivery company, it’s charged on the total package value, including:
- the value of the goods
- postage, packaging and insurance
- any duty you owe
VAT is charged at the VAT rate that applies to your goods.
I’ve just bought a set of bike rims off an eBay dealer in the Netherlands for £100. EBay have added the vat on so with shipping I’ve paid £130. Just hoping I don’t get stung again on double import tax
incorrect. It depends on the country. Sadly I now live in a country that has ZERO threshold on import duty and VAT. I even get charged when there is zero VAT because of the inspection fee (thanks CTT). So any import is subject to IVA unless it is zero rated (documents for example).
So a pair of socks at 5€ second hand - will get slapped 23% IVA
But at least the sun shines 300 days out of 365!
Last edited by MartynJC (UK); 26th May 2022 at 07:38.
“ Ford... you're turning into a penguin. Stop it.” HHGTTG