/ Money, Shopping, Travel & Leisure

Buy America! Does import duty stop you from shopping online?

Money in hands

Ever spotted your dream product cheaper online from a US company, but hesitated to buy because of concerns it may get stuck in customs? Or worse, have you bought from the US and incurred unexpected costs?

Friends have told me that they’ve recently been tripped up by import duty after buying goods online from US companies. The charges can be even more irritating when you compare the customs limit for buying online from the US (£135) to the limit for when you fly home with goods from the States (£390).

The question is – have you also been affected and would you like to see the UK government act?

A few years ago my husband, who is an amateur musician, spotted a synthesiser from a small American seller on eBay. Three weeks after ordering it he received a note from customs asking for additional money to cover the duty plus the VAT, which he hadn’t realised wasn’t pre-paid with his order. This nearly doubled the cost of the synth so he never reclaimed it. He also never bought online from America again.

Customs delays and charges

A colleague, Alex, spotted a picture of high heel shoe protectors for her wedding guests on Pinterest and the link took her to a US website. They were just what she was after and appeared better value than the UK equivalents she found online.

After a couple of weeks the heel protectors hadn’t arrived, so she contacted the US company who said the parcel may have got stuck in customs (annoying that they didn’t mention this at point of purchase!). Sure enough, the next day a card arrived from Royal Mail saying she needed to pay a £30 customs charge to receive her package. She had no choice but to pay the charge. It added about 20% onto the cost of the original items and meant they were now more expensive than the heel protectors she could have purchased in the UK.

Finally, Sam in our Campaigns team is a cheerleader with a UK squad. And while cheer has massively grown as a sport in the UK, the good stuff still mainly happens in the US. Lots of US teams have amazing merchandise for sale – the top team athletes are like celebrities, or “cheerlebrities” – but Sam’s held back from ordering anything due to fear of customs delays and charges.

Have you had a similar experience of customs when ordering online goods from American companies? If so, please share your stories. Do you think the UK Government should make it easier, simpler and cheaper to buy from the US?

Should the UK Government raise the import duty threshold so Brits can buy more from America?

Yes (72%, 925 Votes)

No (18%, 236 Votes)

Don't know (9%, 120 Votes)

Total Voters: 1,281

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Comments
Barry Oakley says:
12 January 2019

If or when we depart the EU, will imports from the USA no longer incur duty costs? I’ve just seen an item and given the present US Dollar/Sterling exchange rate (13/1/2018) , that would cost nearly £200 less than if bought from a UK supplier.

This comment was removed at the request of the user

Duty on most items is relatively low; the major tax is VAT – payable on the item plus p&p.

The information on the Gov.UK website is not clear enough. If we buy from USA it’s in dollars, but we pay VAT in pounds sterling, so even if we buy a very cheap item plus p&p, might the exchange rate on the day of purchase slip us into the paying VAT bracket? And if the VAT is collected by the Post Office, isn’t there a charge for this service? And there’s the bank charges for conversion of pounds into dollars, too. So when this all adds up, it makes even the cheapest item pricey.

I think most people buying from foreign suppliers realise that there will be extra costs over and above the purchase price that have to be factored into the value for money assessment. These additional costs include (a) bank charges for currency conversion subject to the prevailing exchange rate, (b) a VAT liability on the purchase, (c) shipping costs subject to VAT, and (d) a carrier’s handling charge for collecting and remitting the VAT to the HMRC. Of these, the UK government is only responsible for the VAT element [and excise duty in certain cases]. The VAT and duty rates are generally well-known.

Trevelly Cuthbert says:
21 December 2019

Plus the shafting from the Post office/Parcelforce customs clearance fee which IS avoidable, but you have got to be very determined and willing to dig deep to find the necessary info.

adrian edwards says:
19 August 2020

this is totally incorrect i have incurred massive duties on items making it impossible to buy from usa, charges as high or higher than 50% of the item value is ridiculous and the system is clearly broken.

Lin N says:
29 May 2019

Why can’t there be a simple guide? If I want to buy a bottle of herbal capsules from the USA I could find I have to pay a large bill before I can get hold of them but I can’t find out how much it will be before I order! The government site is fiendishly complicated and more aimed at people who want to import tons of the stuff.
Very frustrating!

Mr awesome. says:
9 July 2019

I must confess, I have never paid tax on any of my imports. If it’s a large purchase I just book my holiday around the time I want to purchase the item. Last time I upgraded my phone, I got it from the USA. I also got a MacBook Pro and a Sony a7r iii. I shipped the boxes back home and took the goods through luggage. Made the holiday free.

It’s even more complex when you talk about cars and importing – https://mycarimport.co.uk/import-process/importing-a-car-from-the-usa-to-uk/

They’ve got some great rules on importing classic motors though. But for large vehicle purchases you can’t escape the VAT!

Joe Biden says:
9 August 2019

The biggest sting is the handling fees that carriers presume to pay on your behalf. You can have a parcel come in that’s 50p over the threshold for VAT and you will find Royal Fail lumping an £8 plus whatever few pence VAT they paid on your behalf. The things that need to change are: a higher VAT-free threshold. The removal of postage and packing costs from the rateable value -fees should only be levied on thh value of the actual goods, not the box they’re in and the cost of the stamps. Regulation on Royal Mail’s illegal seizure of goods until you pay their exorbitant costs, which bear no real relation to the actual costs incurred by them and is just a massive profits scam.

The rule of vat on p&p is no different buying from overseas as it is in the UK. I see no reason why importers should pay any less tax than those who buy in the UK. The threshold is a concession.

I am not sure why the VAT threshold should be raised for imported goods, Joe. Wherever it sits there will be the potential for a marginal overspend above the purchase price triggering a VAT liability.

Packaging and shipping costs are for services which are liable to VAT whether the goods are imported or home-produced. I don’t see why there should be more favourable treatment because they are coming from overseas.

How do you know the actual costs to the Royal Mail of handling the collection and remittance of VAT to the HMRC? It is a flat rate irrespective of the value of the import so obviously it will represent a higher percentage on a low value purchase.

I just bought a piece of medical equipment for £169 from NYC and their US website stated clearly when I added the equipment to my shopping cart that international shipping was £3. Very shocked to find I’ve now to pay £35 to get my specialist equipment delivered through my door, when I’ve since found it can be bought on Amazon here in the UK with free shipping. Yes. More fool me. Shouldn’t the US websites have to state clearly that there will be substantial extra shipping/customs charges or at least make it very clear or have I just been naive? You live you learn. Also if I don’t pay the £35, my credit card has already been debited with the £169, do the goods just get sent back to the sender to be posted on to someone else. Is this how unscrupulous companies are making their profits? Who pays for the item to be returned to the US if I refuse to pay out of principle???!!!!!

I’m a dressmaker, and I buy a lot of fabrics and laces from the US. I got my first shock when I ordered roughly £200 worth of lace. I had to pay £60 in VAT and Import Tax, in addition to the £8 standard fee our Post Office charges to handle the payments. I’ve found that most of the really fantastic stuff is sold in the US – they have vintage lace and fabric that is out of this world – and while it is so reasonably priced, I’m very reluctant to buy from there because I have to add those extra costs to the price of the garments I make. Where does the VAT and Import Tax revenue actually go? Who benefits from it? If buying from the US could be made less expensive, I’d be buying from there all the time. I only hope The Donald smiles on our PM, and we get a better deal.

Caroline, you would pay vat on fabric, lace and its delivery cost if you bought in the UK. Importing is no different, except you pay the Post Office (on your case) a standard fee to handle the taxation transaction and remit with (e-)paperwork to HMRC. I doubt there is much, if any, import duty involved. The tax benefits the UK just as any vat does.

Hussain says:
30 August 2019

I ordered some herbal tablets for pain from a company in USA. I received a card from Royal Mail asking me to pay duty of £21 + post want to charge £8 handling charge, the tablets only cost $29! I fail to understand how can the duty be approx the same as the cost of the goods?

colin currie says:
2 March 2020

I used to buy my golf apparel from ebay.com specifically from the usa as the golf shoes at the time were just a bargain and easily £40-£50 cheaper than our uk counterparts but now its just impossible to buy from the usa because as the time you add shipping costs and ridiculous amounts off import charges its actually now cheaper purchasing my items from the uk i mean for instance golf shoes from the usa $55 the time i add the shipping and charges it whacks it up to just over $90 on where i can now get the shoes in the uk for £70

Well done, Colin. At today’s exchange rate that is break even. Good result – you must be well-pleased.

More people should do the comparison before buying abroad and then moaning about the tax, shipping and duty collection fees.

Cath says:
9 June 2020

My daughter is due to have her first baby. So my friend in America has made a baby blanket..and sent this to me for her baby shower, which is this Sunday. But I’ve had a card from customs to say I have to pay, £58.50
Why do I have to pay this as the gift isn’t even worth that amount. I feel bad that my friend made this gift and I can’t except it.

You will have to pay a fee due to how the package was labelled (the GOV have a code system to identify which items need what VAT and Duties are chargeable).

There has also been a recent additional Tax the UK have implemented on goods from the US (at either 10% and 25% of the goods!!). The list of goods are found in appendix 1 and 2 : https://eur-lex.europa.eu/search.html?whOJ=NO_OJ%3D158%2CYEAR_OJ%3D2018%2CPAGE_FIRST%3D0005&DB_COLL_OJ=oj-l&lang=en&type=advanced&qid=1606426970493.

The regulation date is 2018 but the date of implementation on the Gov website is May 2020, not entirely sure why the delay but in any case it is completely unfair.

The System is clearly broken and items sourced from usa should not be hit with high import duties, we have to pay shipping costs regardless. The government is clearly trying to stop us buying abroad and we should not stand for this kind of control.

I bought items from Fashionnova for £150 but received a custom n excise bill for £110.63!!