UK Tax and Duty

8/3/2019 UK Tax and Duty

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Chapter 1 and Taxes

This is a resource for people who are using DHL Express for the first time, or who have received a delivery from

DHL. We hope you find it useful.

You don't have to be a business person to be an exporter or an importer.

As Internet shopping becomes more popular, what is often not understood is that as soon as you hit the return

key to purchase a product from another country, then effectively you become an importer and become liable for

duty and VAT payments.

Customs Advice for Internet Shoppers

What goods are subject to duty & VAT?

All goods imported into the UK from outside the EU must be declared to HM Revenue & Customs and in most

cases, are subject to Customs duty & VAT. This includes goods bought over the Internet.

It's not always about the purchasing!

If someone sends you a gift from abroad that is over £40 in value, you will also be obliged to pay the duty and

VAT unless the person who sent it has agreed to pay it themselves. Likewise, if you are the person sending you

need to remember that if you don't take the time to include the proper invoices then your shipment could be held

in customs or the person you are sending to may be charged too much duty and VAT.

The bottom line is:

If you are sending goods out of the European Union (EU) you will need to prepare aPrepare aCustoms Invoice

and if you are receiving a shipment you need to know that there could be duties on top that may be billed after

the shipment has been delivered.

Have you received an invoice for the first time?

If this is the first time you have received a duty & VAT invoice from us then you may have some questions that

you’d like answering before you pay it. This could be an unexpected bill and you may be unsure what it is or how

it is calculated.

These charges are levied by HM Revenue & Customs and have been paid for by DHL Express on your behalf in

order that we can deliver your goods.

The following invoice number prefixes all denote import duty and VAT related charges: HMC, CFS, C18, HRC,

XTRI.

You may also be charged import duty & VAT on an invoice with a prefix of a 3 letter code representing a DHL UK

Service Centre, followed by the initial ‘I’ and 6 digits e.g. ABZI765432, BHXI876543



Please refer to the reverse of your invoice for explanatory notes on the charges levied. For further information on

why you have been charged, please read the section below.

Your charges explained

Who is liable to pay duty and VAT charges?

The person receiving the shipment is legally obliged to pay duty and VAT except where the person sending the

shipment has agreed to accept these charges in the contract of sale. Private individuals intending to buy goods

on the Internet from non-EU countries should be particularly careful. Often the price advertised on the supplier's

website will not include UK duty and VAT and you will be expected to pay this once the shipment arrives in the

UK.

How are the charges paid?

We will not be able to deliver your goods to you until we have paid the duty and VAT charges on your behalf.

Some businesses have their own accounts with HM Revenue & Customs and we merely arrange for their

account to be directly debited by Customs. Many other importers, particularly private consumers do not have an

account with Customs. We must therefore pay the charges on your behalf before we can deliver your goods to

you. We will then invoice you for the duty and VAT we have paid over on your behalf. A small administration fee

will be added to the duty and VAT invoice we send you.

What is the administration fee?

The fee for business customers is £10 or 2% of the total duty/VAT amount incurred, whichever is the greater.

The growth of Internet shopping has led us to introduce a different administration fee for private individuals. This

is because net shoppers are usually buying infrequently and purchasing low cost items such as CDs, DVDs or

software. We felt that low usage such as this merited a different fee structure. We charge a flat rate of £1.25

where the total duty/VAT is less than £62.50, or 2% of the total duty/VAT incurred if greater than £62.50.

For example:

If the total duty/VAT incurred is £60.00, the administration fee will be calculated as follows: £60.00 x 2% = £1.20.

However, for businesses the administration fee of £10.00 will apply as this is greater that 2%. For private

individuals the administration fee of £1.25 will apply because the duty/VAT value is less than £62.50.

If the total duty/VAT incurred is £520.29, the administration fee for businesses will be calculated as follows:

£520.29 x 2% = £10.41. This is the fee that will be charged as it is greater than £10.00. For private individuals the

same fee of £10.41 will apply because the duty/VAT value is greater than £62.50.

Can I recover the duty and VAT charges from Customs?

If you are VAT registered you may be able to recover the VAT; duty and administration costs are not recoverable.



Are there any reliefs from duty and VAT?

Yes, they include:

Goods of £15 or less in value (excluding postage, packing and other miscellaneous costs). This does not

include alcohol, tobacco products, perfume or toilet waters.

Gifts from one private individual to another providing the value does not exceed £40. (Exception: There is a

very restricted gift allowance on excise goods but you are advised to contact Customs for further information)

Personal effects of people returning to the EU after residing abroad

Goods found to be defective or damaged or not otherwise as ordered. (Customs must be notified before

qualifying goods can be returned overseas. Otherwise duty relief may be lost)

Goods imported into the EU for processing and repair before re-export from the EU. (Your local office of HM

Customs and Excise can provide you with further details)

Note: Any goods arriving in the UK on which Excise duty in particular has not been paid will be liable to seizure

by Customs

Where can I find more information?

You can find more information on duty and VAT by contacting your local Customs office or by visiting the HM

Revenue & Customs website.

Receiving Shipments

What is Customs duty?

Customs duty is a tax charged on goods produced outside the EU. It is controlled by HM Revenue & Customs.

The purpose of duty is to keep competition equal and fair and to bring the cost of imported goods up to the same

cost as those produced within the EU. Once duty is paid, the goods are in 'free circulation' and can move

throughout the EU without restriction.

What is Excise duty?

Certain goods such as wines, spirits, cigars, cigarettes and tobacco are subject to what is called excise duty.

When you buy excisable goods in the UK the price you pay includes this tax. However, if these goods are

imported either from within or from outside the EU, you will have to pay Excise duty and VAT. The Excise duty

is often more than the cost of the goods, and private consumers buying excisable goods over the Internet should

be extremely careful as there are different regulations governing the purchase of these goods on the Internet.

What is VAT?

Value Added Tax (VAT) is a tax normally charged on the supply of goods (and services) made by a VAT

registered business. However, imported goods are also subject to VAT. This is to prevent a purchaser gaining an

unfair advantage by buying non-EU goods VAT free.

Why doesn't DHL include duty & VAT charges in its tariff?

These charges are not included in our tariff because the Customs authorities in the destination country determine



whether any duties and taxes are applicable when the shipment arrives. This is based on the information

provided on the Waybill and Customs paperwork, in particular the contents, declared value and weight.

About Duty

What is the rate of duty?

The rate of duty for any given product should be the same no matter into which EU country they are imported, but

may differ depending upon the country of origin. Set annually by the EU, rates run from 1st January to 31st

December and are published in a Customs Tariff issued by each EU country. Duty is usually percentage based,

and averages between 5-9% with extremes of nil and 85%.

How is the rate determined?

Goods are classified using the Customs Tariff in order to arrive at the rate of duty. The EU uses a ten digit coding

and there are approximately 14,000 classifications.

What is the value for duty?

Customs assess the amount of duty to be paid based on the declared value of the goods plus the transport costs

to the country of destination.

About VAT

What is the value for VAT?

The value for VAT is the declared value of the goods plus the transport costs to the country of destination plus

the customs duty.

Example of Duty calculation

Goods = 2 special edition CD sets

Value of goods £80 + Transport to the UK £35

Total value for Duty £115 x 3.5% Duty = Total Duty payable £4.02

Example of VAT calculation

Value of goods £80 + Transport to the UK £35 + Duty charges £4.02

Total value for VAT £119.02 x 20% = Total VAT payable £23.80

Therefore the total import Duty and VAT charges payable on import of these goods would be £27.82.

Deferment Accounts

For information about how to set up your own deferment account, please contact your local Customs office or

visit the Business Link website or contact HM Revenue & Customs directly on 0845 010 9000.

For any amendments to clearances made against your deferment account, please contact DHL Aviation.



Buying Goods from other European Union (EU) Countries

Within the EU goods do not have to be declared to Customs. However, Excise duty must be paid on excisable

goods. DHL Express does not normally carry goods subject to Excise duty. The following table details EU

member countries.

EU Member Countries

Austria Germany Netherlands

Belgium Greece Poland

Bulgaria Hungary Portugal

Cyprus Ireland Romania

Czech Republic Italy Slovakia

Denmark Latvia Slovenia

Estonia Lithuania Spain

Finland Luxembourg Sweden

France Malta United Kingdom

UK Tax and Duty

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