If you enjoy buying goods online, chances are you’ve noticed that your shipment comes now with additional charges. Due to Brexit, shoppers now must deal with charges like import duties and taxes on products purchased outside of the EU.
Although there are many explanations online for calculating import duties for your parcel, most of them are written in a complex and confusing way. And with ever-rising prices, insurance, and delivery costs, it is no wonder that many wonder if they have been overcharged for import duties and fees for their shipment.
Types of UK customs charges
However, there are also additional taxes to consider when buying goods.
Certain items like alcohol or tobacco are charged with excise duty. This type of duty is charged at different rates than import duty. As such, they can become more costly when they go through customs clearance. Unlike customs duty, you can’t request a refund for excise duty. If you are a business owner selling these items, you might want to consider this.
It is also vital to distinguish between import duty and import tax, or the value-added tax. Also known as VAT, the import tax is charged on items originating from another country. Though its rates depend on the type of goods being imported, it’s usually set at 20% of the total cost of the item and shipping cost. It’s also worth noting that you cannot avoid paying import VAT.
How to calculate import duty?
How much you will need to pay UK duty and other taxes depends on many factors.
First, the seller needs to fill out the customs declaration form correctly. This document makes any importing of ordered goods going through customs clearance legal. The seller needs to provide information like the type of goods, product category, declared value, description, weight, etc.
One of the crucial pieces of information the seller needs to include is the trade tariff code. It’s also known as the commodity code or the HS code. The HMRC uses the code to define and give a duty rating to each imported item. Thanks to HS codes, the HMRC can calculate the import duty percentage and VAT.
We’ve already mentioned that based on the type and value of imported goods, the import duty rate changes. Here is what you need to know:
- If the value of your items is under £135, you might not pay duties (unless it contains alcohol or tobacco).
- For goods or gifts valued at £135 to £630, the UK duty rate is 2.5%. Although, this percentage can be lower for some goods.
- The rate of goods valued above £135 and gifts above £630 depends on the type of goods and the country of export. Hence, you need to check the tariff code to get the exact rate.
Goods from certain countries, like India or Moldova, will have lower import duty. This is due to the EU’s Generalised System of Preferences (GSP) scheme that the UK follows. Certain trade agreements are made to boost business between the UK and developing countries.
If you want to check how much you will pay for UK duty, we suggest using an online import duty calculator.
How much pay import duty and VAT do you pay when shipping to and from the EU?
When importing goods to and from the EU, there are a few things to note.
You will be subjected to paying VAT and duty when receiving goods from the EU to the UK. Also, if you are shipping to the EU, you will have to fill out the customs declaration forms.
What does the calculator do?
(Read this extended boring version, or make your life easier by skipping to the part with our free automatic import duty calculator)
A customs duty calculator helps you estimate how much you will pay the two main costs – import tax and duty.
This handy tool helps you check how much you should pay duties to HMRC. The good news is that most calculators are available online and free.
To calculate import duty, you need to enter the necessary information, like:
- The main costs of goods released
- The correct commodity code or the HS code
- Type and declared value of imported goods
- etc.
What doesn’t the calculator do?
However, online import duty calculators have a few things to note.
Import duty calculators only give you the estimated value of the duty and VAT. The HMRC has the final say in all matters regarding customs charges in the UK. In some rare cases, you might have to pay a higher price than you’ve estimated.
Also, import duty calculators can only help you estimate duties that are payable in the UK. They will not be helpful in calculating duties and taxes that you need to pay in other countries.
According to the source, there are also two methods to calculate import duty. The first method is the CIF (Contract, Insurance, and Freight), which considers insurance and shipping costs.
The other, the FOB (Free On Board) method, doesn’t take the costs mentioned above into account, providing you with a lower estimated price.
Make sure that when you use the customs duty calculator to enter the values of shipping cost and insurance to get a more accurate picture.
Use Duty Refunds Import Duty Calculator
While they are helpful to save money, a vast majority of online import duty calculators can be confusing. They overcomplicate the results, and some don’t even include courier handling fees in the equation.
Instead of spending precious minutes deciphering what and how much you have to pay import duty or for shipping, why not use Duty Refunds’ user-friendly and easy-to-use import duty calculator.
What to do if you are overcharged for import duties?
First, we must mention that being overcharged for duties rarely happens. How much you will have to pay for UK charges depends on two factors:
- That the seller adequately filled out the customs declaration form and
- That the content of the shipment matches what is stated in the declaration.
As the HMRC checks each shipment and customs declaration thoroughly, there should be no reason to incur unexpected costs.
However, in rare cases, the seller might make a mistake when filling out the customs declaration. For example, they might have entered the wrong commodity code or product category. In that case, the HMRC will provide a different total value, which might give you a nasty surprise.
Don’t fret! If you believe that the HMRC has wrongly calculated UK duty, you can always fill out their 286 form. Please note that before you fill out this form, you must first pay VAT and duty and return the goods to the seller.
Remember that this form is for importing goods via the Royal Mail or Parcelforce. If you use another courier service, you might need to fill out another form to reclaim a customs duty refund for returned goods.
Reclaiming customs charges with Duty Refunds
Filling to reclaim your duty and VAT may seem discouraging, but fortunately, you don’t have to do it by yourself. You can reclaim your UK charges through an agent or a representative.
We at Duty Refunds can help you get a refund on duty and VAT as soon as possible.
All we need to initiate the process on your behalf is the tracking number. Our experts will contact the courier and deal with all the paperwork. Once your claim has been approved, we will get in touch with you.
Duty Refunds charges a 15% commission fee for our services. However, you don’t have to pay anything if we are unsuccessful.
Final thoughts
As we’ve stated previously, being overcharged on import duties rarely happens. It only happens in cases where a seller has made an error while filling out the documentation.
Fortunately, there are many online import duty calculators that you can use to check how much you will have to pay VAT and duty. Unlike others, our duty calculator is very quick and easy to use. You can use it any time you want to shop online. You can think of it as your shopping assistant.
However, if you feel you’ve paid too much for import duty, you can always reclaim your refund of customs charges. But why should you torture yourself with bureaucratic nightmares when you can save time by asking us for help? Our Duty Refunds team of experts will initiate the claim for you while you sit back and relax. All you have to do is fill out our new claims form and let us take care of everything for you.
