Overseas Vendor? Caveat Emptor! HMRC Import Duty!!!

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I hope this may be of interest to UK based eBayers wishing to purchase items from non-EU based vendors.

Within the boundaries of the member states of the EU, the importation of certain items by individuals does not attract the payment of additional taxes.  If an individual obtains a single item, it is commonly held to be a purchase for personal use, as opposed to re-sale.

However, if one purchases an item from an eBay member not located within an EU country or if it is clear the item is not held within an EU county, then it is likely that Excise Duty and VAT will be imposed by Her Majesty's Revenue and Customs.  The duties and tax will reflect the cost price of the purchase transaction and the shipping cost required to transport the item to the UK border.

The Common Customs Tariff prescribes the level of duty applied to specific item categories.  The duty is expressed as a percentage and ranges from 0% to 85%.  Given the wide scope of the percentages concerned, it is evidently wise to have an idea of how they may adversely influence the total amount payable for an eBay item, as you may subsequently regret the associated costs attached to a purchase of what may have seemed to be a bargain.

An important distinction to make clear at the outset; Excise Duty is item specific, whereas VAT is charged at 15% (currently).  Both charges will apply to imported items from non-EU countries.

Okay, for arguements sake, let us say you are a keen military horologist, a collector of military timepieces...

A seller in the United States of America has a rare Westclox 26-D military wristwatch, as issued to combat personnel fighting in the Vietnam War.  The watch is in superb condition with a fully functional automatic (self-winding) 7 jewel movement.  The watch case is manufactured from a composite plastic material and is fitted with a fabric strap.  You MUST have this item, so you either bid or 'Buy-It-Now'!

The cost is $84.99 USD with $6 USD shipping, so $90.99 in total.  In Sterling this means £57.92 GBP with £4.09 GBP shipping = £62.01 GBP.

The Common Customs Tariff prescribes the category code 9102 21 to this item, denoting, 'wristwatches, pocket watches and other watches, including stop watches, other than those of heading 9101 [where 9101 alludes to watches with 'precious metal cases']'.    

The 21 suffix denotes, 'with automatic winding'.

From the United States of America, the Excise Duty percentage for an item in this category is 4.5%.  It does vary from one country to another!

Therefore, 4.5% of £62.01 = £2.79. £2.79 + £62.01 = £64.80.

VAT levied at 15% on £64.80 = £9.72 + £8 Royal Mail handling fee imposed on all UK mail which may be subject to assessment by HMRC.

Total cost = £82.52 which is somewhat more expensive than the original £62.01.   

Even when overseas exchange rates may cause overseas transactions to look very attractive, it is sensible to do the sums first to avoid expensive disappointment!  

 
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