paying vat on purchases bought via the internet.

[Dumbo#1]

Could anyone help me - I have just ordered 2 bracelets from the USA costing $44 and would like to know if I will have to pay vat on their arrival into the UK? I ordered 2 watches about a year ago which came to $90 and the Post Office would not release them to me until I had paid the vat on them which came to about �11. I had no idea where I stood on this and so didn't feel I could argue with the Post Office, but thinking back now this doesn't seem right?? The bracelets are birthday gifts (as were the watches) surely I don't have to pay vat for such a small purchase sum? Thank you if you can help me.

[Stu Dent]

Yes, I'm afraid that you are required to pay VAT - even if you'd received them as a gift.

You will be charged import VAT @ the standard rate of 17.5% of $44 or sterling equivalent; you will also be charged customs duty of 3.5% of the $44 cost of goods.

I was going to check the VAT Act 1994, but it was quicker/easier to check HMRC.gov.uk - the links below take you to the necessary information.

http://customs.hmrc.gov.uk/channelsPortalWebAp p/channelsPortalWebApp.portal?_nfpb=true&_page Label=pageTravel_ShowContent&propertyType=docu ment&resetCT=true&id=HMCE_CL_001454

http://customs.hmrc.gov.uk/channelsPortalWebAp p/channelsPortalWebApp.portal?_nfpb=true&_page Label=pageTravel_ShowContent&id=HMCE_CL_000014 &propertyType=document#P49_4191

[Buenchico]

If you travel to the USA, you can bring back up to �145 worth of gifts and souvenirs but there is no such entitlement for postal imports. However, for the reasons explained below, items with a value less than �18 do not normally attract charges. (So you could have avoided charges by ordering the two bracelets separately).

Here's how the system works:

Step 1: Customs staff calculate the Customs Duty payable. A table showing the current rates, for the most common types of imports is here:
http://customs.hmrc.gov.uk/channelsPortalWebAp p/channelsPortalWebApp.portal?_nfpb=true&_page Label=pageTravel_ShowContent&id=HMCE_PROD_0099 89&propertyType=document
The rate for silver jewellery is 2.5%, so (theoretically) the amount due is the UK equivalent of $1.10. However, Customs Duty is waived if it comes to less than �7, so you won't have to pay this amount.

Step 2: Customs staff work out the Import VAT to be charged. (Where Customs Duty is payable, you also pay VAT on the duty as well!). This is charged (on most items, including jewellery) at 17.5%. However, if the value of the items is less than �18, Import VAT is waived. Unfortunately, the current exchange rate shows $44 = �22.44. This means that you'll have to pay �3.93 for VAT.

Step 3: A Customs Inspection Fee is added to your bill. This fee is waived if there is no Duty or VAT to be paid. However, because you've got some VAT to pay, you'll have to pay this flat rate fee, which is currently �8.

In total, that means that the postman is likely to require payment of �11.93 before you can receive the package.

Chris