The festive season’s shopping drive is underway, with Christmas around the corner and Black Friday already in full swing. Tens of thousands of packages will be sent to overseas customers, but many traders may not fully understand the customs implications of sending single items abroad.
To help understand how customs rules impact small traders and e-commerce entrepreneurs selling single items to customers, the Daily Update spoke to Chartered Institute of Export & International Trade customs expert Andy Bridges to learn more.
There are also useful insights for those sending and receiving gifts from loved ones overseas. Even when the reason for sending is personal rather than commercial, items are still liable to attract charges and face delays if they don’t meet certain criteria.
‘Know your limits’
This sage piece of advice is applicable to the festive season in more ways than one; it’s also relevant when sending and receiving gifts from overseas. It’s important to be aware of the value at which products will attract certain taxes.
“You’ll need to pay VAT on any items being sent that are over £39,” Bridges says, “then customs duty will apply for anything over £135”.
For individuals sending gifts to friends and family overseas, it’s also important to remember the £39 threshold. Whether you’re sending an item directly to someone, through a postal service or purchasing and delivering through an e-commerce platform, anything over £39 could attract VAT.
Type of item
Bridges adds that popular Christmas gift items will also attract excise duty when entering the UK, notably alcohol.
Bridges explains that when it comes to receiving festive tipples, you can receive up to a litre of spirts “duty-free” – without attracting VAT or customs duty – however “in nine out of 10 cases, excise duty will apply”.
The Alcohol by Volume (ABV) rate also determines the alcohol duty payable. Gov.uk has a breakdown by alcohol type here.
Small volumes of perfume operate under a similar principle to alcohol; while a small bottle of 50ml or less can be sent “duty-free”, “additional restrictions will be in place for flammable materials”.
Documentation
For individual sellers sending goods cross border, Bridges states the importance of sending items with a customs declaration that lists each item, its value and the recipient.
If you are sending a collection of goodies to a household overseas, he adds that its worth listing who each item is for.
“If individual items stay within the tax limits,” he says, “you won’t be charged, even if the entire package is above this”.
When it comes to sending gifts overseas, UK senders are advised to fill out a CN22 form for gifts under £270. Royal Mail warns that attempts to send items without the form are “likely to result in items being returned to the sender”.
Gifts won’t require customs information such as a tariff code (a field on the CN22). However you will still need to provide a description of the items you’re sending, the quantity of items, their weight and their value.
Gift items being sent commercially via the postal service will require the correct tariff code, as well as an Economic Operators Registration and Identification (EORI) number and VAT registration (if applicable).
Do your research
When sending goods overseas it’s always important to investigate the customs rules of destination countries.
Different countries may restrict the entry of certain food items for biosecurity reasons or apply significant charges to items like alcohol.
E-commerce traders should therefore be careful to screen the destination of potential customers, while those Christmas-shopping for loved ones overseas could consider lower-risk items.
What makes a good/gift?
In order to meet the criteria for a “gift” and not attract unnecessary customs delays or charges, Bridges says that items “must be sent directly from one private individual to another”.
Again, documentation is really important. He adds that senders should “make sure that the accompanying paperwork clearly states the item is a “gift.”
"Gifts” should only be sent occasionally, such as on birthdays or Christmas, to qualify. Regularly sending items overseas will attract the scrutiny of customs agents, making it more important that documentation is completed correctly and in full.
A good rule for life as well as customs, gifts cannot be paid for by the recipient. When it comes to goods entering the UK, they can’t be paid for by a UK resident either.
This article is part of our Trade Explained series, which offers technical, expert-led overviews of how customs rules and regulations work in practice. Typically member-exclusive, this article is available to all subscribers. To learn more about Chartered Institute membership, click here.
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