HMRC Clarifies Situation Regarding Customs Duty

by Jason Gorringe, Tax-News.com, London

08 August 2008

HM Revenue and Customs on Thursday provided further information on changes to the de minimis limits to Customs duty for goods imported by post.

The UK tax authority revealed that:

"From 1 December 2008, Council Regulation 274/2008 dated 17 March 2008 will enter into force. This Regulation amends several articles of Council Regulation 918/83 (The Community System of Reliefs from Customs Duty)."

"Article 27 of Regulation 918/83 sets out the threshold for consignments despatched by letter or parcel post to be admitted free of Customs duty. This is currently EUR22 (GBP18) but will increase to EUR150 (GBP105) from 1 December 2008. However, Customs duty is not collected if the amount of duty due is less than EUR10 (GBP7)."

It went on to state that:

"We have identified several blogs/internet forums where these changes have been welcomed but widely misunderstood. It appears people incorrectly believe that from 1 December 2008 goods with a value less than EUR150 (GBP105) imported from outside the EU will be admitted without any import charges being levied, but the Regulation applies only to Customs duty. Import VAT and Excise duties (where applicable) will still apply at the current rate."

"Because of this misconception, on some websites people are being wrongly advised to start their ‘Christmas internet shopping’ for goods imported from outside the EU, after the introduction of the increased duty limit on 1 December 2008. This last minute rush (when import VAT and if appropriate excise duty will still be charged) is obviously something both HM Revenue & Customs (HMRC) and Royal Mail want to try and avoid."

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