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UK Tax and Duty

UK Tax and Duty

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Published by Vince Vo
UK Tax and Duty for DHL
UK Tax and Duty for DHL

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Published by: Vince Vo on Feb 13, 2012
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11/13/2013

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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 fromDHL. 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 returnkey to purchase a product from another country, then effectively you become an importer and become liable forduty 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 mostcases, 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 andVAT unless the person who sent it has agreed to pay it themselves. Likewise, if you are the person sending youneed to remember that if you don't take the time to include the proper invoices then your shipment could be heldin 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 Invoiceand if you are receiving a shipment you need to know that there could be duties on top that may be billed afterthe 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 thatyou’d like answering before you pay it. This could be an unexpected bill and you may be unsure what it is or howit is calculated.These charges are levied by HM Revenue & Customs and have been paid for by DHL Express on your behalf inorder 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 UKService 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 onwhy you have been charged, please read the section below.
Your charges explainedWho 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 theshipment has agreed to accept these charges in the contract of sale. Private individuals intending to buy goodson the Internet from non-EU countries should be particularly careful. Often the price advertised on the supplier'swebsite will not include UK duty and VAT and you will be expected to pay this once the shipment arrives in theUK.
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 theiraccount to be directly debited by Customs. Many other importers, particularly private consumers do not have anaccount with Customs. We must therefore pay the charges on your behalf before we can deliver your goods toyou. We will then invoice you for the duty and VAT we have paid over on your behalf. A small administration feewill 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. Thisis because net shoppers are usually buying infrequently and purchasing low cost items such as CDs, DVDs orsoftware. We felt that low usage such as this merited a different fee structure. We charge a flat rate of £1.25where 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 privateindividuals 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 thesame 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 notinclude alcohol, tobacco products, perfume or toilet waters.
 
Gifts from one private individual to another providing the value does not exceed £40. (Exception: There is avery 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 beforequalifying 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 HMCustoms 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 seizureby 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 HMRevenue & Customs website.
Receiving ShipmentsWhat 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 samecost as those produced within the EU. Once duty is paid, the goods are in 'free circulation' and can movethroughout 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 areimported either from
within or from outside the EU
, you will have to pay Excise duty and VAT. The Excise dutyis often more than the cost of the goods, and private consumers buying excisable goods over the Internet shouldbe 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 VATregistered business. However, imported goods are also subject to VAT. This is to prevent a purchaser gaining anunfair 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

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