Summer 2006 Newsletter


Brave New World

Business Not Pleasure

Summertime Blues

All That Glitters...

Casting The Net

Trust Gordon?

It Ain't Over...

One In The Eye

Keep Your Nose Clean

Foreign Affairs

When Is A Car...

Don't Walk Away

Avoiding, The Issue

Brown Is Anti-PC

VAT's Up Doc?

Fuel's Gold

An Age-old Question?

That's Unfair!

Year In Year Out

How Hard To Try?

It's A Rip-Off!

Outlaws Win

Show Some Restraint

Not Our Problem

They Cannot Be Serious?


Pension Disappointments

One In The Eye

If you buy something from abroad by post, you may find you have to pay VAT and customs duty before the postman will deliver it. That can be a nasty shock. However, there is a lower limit of £18 for bothering to charge import taxes.

Some businesses exploit this - for example, if you buy CDs or DVDs by mail, they will arrive singly so that the package is less than £18 in value. Some businesses even ship goods out to the Channel Islands in bulk (a VAT-free export) and then mail them back in small packets to their customers in the UK (a VAT-free small import).

The Budget included a warning that the government is not happy with businesses "abusing" this rule. The limit was introduced in 1984 and has been £18 ever since, but it's only recently that businesses have used it so enthusiastically. It now costs £85 million a year in lost revenue, so Mr Brown is thinking of abolishing it. That's at the same time as he is proposing to increase the duty-free limit for passengers importing goods in luggage to £1,000. An incentive to travel!

One particular scheme has recently been closed down by the European Court of Justice. A firm of opticians sent packets of contact lenses to its UK customers from a Jersey company. The total value of each packet was over £18 - but, the company argued, that included the non-VATable charge for the optician's services in dispensing the right lenses. The value of the goods on their own was less than £18. The court said that didn't work for import VAT. Customs are now arguing that the whole value is chargeable to import VAT - that's worse than just mailing the lenses within the UK, when the dispensing charge would be VAT-free.

It's worth bearing in mind that buying things over the internet may come with an added charge on the goods when they arrive - don't be caught out.