Duties and Taxes

What is Customs Duty?
Customs duty is a tax charged on goods produced outside the EU. It is controlled by HM Customs & Excise. 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) 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.

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.

What goods are subject to Duty & VAT?
All goods imported into the UK from outside the EU must be declared to HM Customs & Excise and, in most cases, are subject to Customs duty & VAT. This includes goods bought over the Internet.

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.

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 17.5% = Total VAT payable £20.83

Therefore the total import Duty and VAT charges payable on import of these goods would be £24.85.

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 Customs and Excise 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 £1.25, or 2% of the total duty/VAT incurred, whichever is the greater. This compares very favourably with our competitors and we are, as far as we are aware, the only air express carrier who has introduced a special rate for private individuals.

For example:

Total duty/VAT incurred – £120.29. Administration charge for businesses – £120.29 x 2% = £10.00. For private shipments = £1.25

Total duty/VAT incurred - £520.29. Administration charge for businesses - £520.29 x 2% = £10.41. For private shipments = £10.41

Can I recover the Duty and VAT charges from Customs?
If you are VAT registered you may be able to recover the VAT. But Duty and administration costs are not recoverable.

Are there any reliefs from Duty and VAT?
Yes, they include:

• Goods of £18 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 £36. (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 out more information?
You can find out more information on Duty and VAT by contacting your local Customs office or by visiting the HM Revenue & Customs website.