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Buying from Overseas Sellers

By: Chris Nickson - Updated: 1 Jul 2010 | comments*Discuss
Auction Internet Auction Customs Duty

At times you may bid on items in Internet auctions where the seller is overseas. If you win the auction that means paying postage and packing, and can also involve you having to pay customs charges before you’re able to get the item, unless it’s coming from inside the EU or other “special territories” (although with the latter you pay import VAT).

That can be very frustrating. It means that, depending on the value of the item, you’ll pay a variable percentage of the sales value in customs duty, as well as VAT on top of that, plus a fee from the Post Office. As if that weren’t quite enough, you’ll have to go to the postal depot to pay in person and collect the item.

What You Can Do

Although it’s illegal, buyers and sellers do sometimes avoid the problem of customs duty by putting a much lower value on an item. The shipper will have to fill out a customs form that’s attached to the package. This includes information as to whether the item is a gift, documents, commercial sample, or other, as well as the value of the enclosed item.

Since no duty is payable on items valued at less than £36 (and above that the first £7 of duty is waived), if the seller puts a low figure, duty can be avoided. But – and this is a big but – it also means that if the item in insured for shipping, it will be for less than its real value.Be aware, too, that if you’re discovered, you’ll have to pay the full amount of duty and could also be liable for prosecution.

Its better by far to have the seller declare the proper amount (many insist on doing this to remain legal), be able to have the item insured, and pay the duty when it arrives.

The Charges

Although Customs duty of less than £7 is usually waived, above that you get into complex formulae that depend not only on the value of the item, but where it’s shipped from and the type of item it is. It’s charged not just on what you paid for the items, but also an applicable local sales tax, posting and packing fee and insurance costs. On top of that is import VAT, which is charged at the same rate as UK VAT, and calculated on the total prices above plus the customs duty.

In some cases overseas shippers have an agreement whereby they pay import VAT before shipping (and after they collect it from you, of course). You’ll probably also have to pay a handling fee to the Royal Mail when you collect your package.

Appealing Charges

If you feel you’ve paid too much in Customs charges, you can appeal, but you’ll need to give plenty of evidence, including the charge label, the customs declaration and packaging with your address, as well as the seller’s receipt to you. If you’re unhappy with that decision you have the right to a Departmental review or even a Tribunal.In the event you reject the item sent and return it, you have three months in which to reclaim the amount you’ve paid in duty and import VAT.

Countries Not Affected

If the item you buy is from any of the EU countries, you don’t have to pay customs charges or import VAT. However, there are a few selected territories that are classed as part of the EU for customs purposes, but still require the payment of import VAT. Before buying you should be aware of what they are.

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