If you need to pay import duty on a parcel, you'll be contacted by Royal Mail (or your courier) and instructed on how to pay. You'll usually have 3 weeks to pay any charges, before they send parcel back.
If the parcel is from outside the EU, you may be charged VAT, customs, or excise duty on it. This also applies to gifts and goods from the EU if they're above a certain value.
You'll need to know the tariff or HS code to calculate the exact rate due. If you also need to pay VAT, it'll be charged on the total value of your goods, including import duty.
HMRC (Her Majesty’s Revenue & Customs) will consider a parcel a gift if the sender has described it as a gift on the customs declaration. To qualify, the parcel will need to be sent between two people (not companies) for an appropriate occasion (like a birthday, or anniversary).
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Imagine you need to import a shipment of umbrellas from China to the UK. The goods cost £15,000, and the shipping and insurance costs £7,000.
If you need to pay import duty on a delivery, UK customs will automatically let Royal Mail or your courier know, and they’ll contact you. They’ll tell you how much you need to pay, and when it’s due, so you won’t need to worry about calculating it yourself (unless you think a mistake has been made).
To save time, you can usually get your supplier to send the shipping invoice before the delivery. This means you can let Royal Mail or your courier know beforehand, and pay the charges before the goods arrive to the UK.
And if you need to pay your shipping invoice in a different currency, TransferWise for Business can get you a better deal. By sending your money at the best possible exchange rate, TransferWise can save you up to 19x more than PayPal.
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If you’re buying goods for sample purposes only, and don’t intend to sell them, you can save on import duty and VAT. To qualify, there are some criteria that the goods need to meet:
If the price of the products, shipping, duty, and insurance comes to more than £15, then you’ll still need to pay VAT. And if that total is above £135, you’ll need to pay UK duty as well.
The UK currently follows the EU’s GSP (Generalised System of Preferences) scheme, which means that goods coming from certain countries will have lower import duty. In some cases, they may even be free from duty altogether. The scheme is intended to encourage business between the UK and developing countries, such as: