Content
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?
Merry-Go-Round
Pension Disappointments
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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.  |
© Bayar Hughes & Co., 2010.