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Online shoppers pay less duty tax from December

HM Revenue and Customs changes the rules


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From next month online shoppers will no longer have to pay customs duty on non-EU purchases up to £105.

The threshold above which customs duty is charged on online purchases from outside the EU rises from £18 to £105 on December 1. This is an early Xmas present for online shoppers from HMRC, who will continue to charge VAT on these items.

Imported goods from EU countries are free from import duty, but those from non-EU countries, such as the USA, China and Australia carry customs duty, import VAT and, for alcohol and tobacco, excise duty too.

The import duty charge rate varies between products. On DVDs and CDs it’s 3.5%, for watches it’s 4.5%, clothing 12% and on DVD players 14%. These rates still apply for items worth more than the new threshold of £105. VAT is added on top of this, at the standard rate of 17.5% in most cases, although some things, such as books, are VAT-free.

The new threshold means that low-price imports that would have attracted customs duty now escape it. Some retailers currently split orders that contain multiple low-value items into separate packages each below the £18 limit to avoid duty, but the new rules will mean this is no longer necessary.

HM Revenue and Customs (HMRC) has launched a podcast on its website to explain how the rate change affects UK online shoppers.

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