VAT and Import Duty Payment Query

[Jazz1966]

Hi,

I am just starting a new business selling giftware - paintings, small statues etc.
I am sourcing the products from abroad - countries like China and India.

The ordering is done either online or when I visit that particular country.
Goods are delivered to the UK via Royal Mail or DHL.
I am aware that I need to pay VAT and Import Duty on these goods.

I have just had a small delivery but the supplier from China did not charge me VAT or any Import duty to be paid to HMRC.

I am not VAT registered so I do not have a VAT number.

My question is how do I pay VAT and Import duty to HMRC?

Thanking you for your reply.

 

[MOIC]

I have just had a small delivery but the supplier from China did not charge me VAT or any Import duty to be paid to HMRC.

It’s not for your supplier in China to charge you VAT or Import Duty.

I am not VAT registered so I do not have a VAT number.

Irrespective of whether you’re registered for VAT or not, you still have to pay VAT on imports.

My question is how do I pay VAT and Import duty to HMRC?

This is generally paid via the courier, who will notify you for payment.

There may be caveats that apply, one of which is that your supplier has sent the goods using incoterms DDP (Delivered Duty Paid), so theoretically they have prepaid the Import Duties. In this case, ensure you have all the correct documents and the figures are accurate.

Also some countries have 0% import tariffs.

If you start importing larger volumes, check the following link for other payment options.

How to pay duties and VAT on imports from outside of the UK

Choose how to pay Customs Duty, excise duties and VAT.

www.gov.uk

 

[Customs Geek]

Also some countries have 0% import tariffs.

To be clear it’s not just where the goods are shipped from but where they originate ie manufactured that may impact duty payable.
The amount of duty payable will also depend on the type of goods - different goods will have different duty rates and in some cases that is 0% irrespective of where goods originate .

 

[Jazz1966]

Thank you for all your responses.
A bit of background. I recently ordered from China goods totaling around £200. I checked the HS number for Import duty and there was none. This just left me with a £40 VAT bill.

When the package arrived it stated the contents were 'Gifts' and the value was $3 even though I had paid them £200. This was written on the package itself and no invoice was included - though I could download the order from their website which would show the amount I had paid. This was the reason for my query. This is a new business and I don't want to get off on the wrong front with HMRC - this Chinese supply has put me in a pickle. I take on board comments about DDP - I just wish this supplier had done this and not made my life complicated.

 

[scstock]

Thank you for all your responses.
A bit of background. I recently ordered from China goods totaling around £200. I checked the HS number for Import duty and there was none. This just left me with a £40 VAT bill.

When the package arrived it stated the contents were 'Gifts' and the value was $3 even though I had paid them £200. This was written on the package itself and no invoice was included - though I could download the order from their website which would show the amount I had paid. This was the reason for my query. This is a new business and I don't want to get off on the wrong front with HMRC - this Chinese supply has put me in a pickle. I take on board comments about DDP - I just wish this supplier had done this and not made my life complicated.

Unfortunately you have unwittingly got off on the wrong foot - your supplier thinks they are being "helpful" by drastically under-stating the value of the goods - which is the value you have paid.

HMRC can at any time investigate and demand immediate payment of the difference - and they can go back three years. You should ask them in future to make sure that the value of the goods on the Commercial Invoice matches your invoice from them. Also make sure they are using the correct HS code for the goods, as equally if HMRC find that Duty was actually payable then you can end up with a large bill (trust me, I know).

 

[Customs Geek]

The duty and VAT relief for gifts is strictly for goods worth below £39 and sent free of charge between two private individuals. So if there is any sort of commercial relationship then the goods can’t be considered gifts .

the Chinese supplier has safely said DDP in the full knowledge they won’t have any taxes to pay because they were going to falsely value the goods.
You the customer think you are getting a good price including taxes and the seller is doing you a favour by removing the hassle of import from you . In reality they are potentially dropping you in it with customs .

I totally agree with scstock -HMRC can come back years later and are well aware of the undervaluation and misdescription of imports in this way and may seek to recover any underpaid taxes. They can’t go after the Chinese seller so will come after the receiver.

HMRC are known to run concentrated campaigns on combatting this from time to time. It’s also this sort of behaviour that causes the clamping down on low value duty reliefs that are abused - there used to be a vat relief on low value imports but that was removed a few years ago due to undervaluation fraud.

You sound like you have had a postal package with a customs label just saying the value so there is minimal risk HMRC will catch up with you. if you do want to rectify the situation and remove any risk to you ,you can make a voluntary disclosure to HMRC and pay the VAT. vat-customs-dutyimport-vat-relating-to-imports-by-post-bor286