Insurance and Customs Questions

[okapishomapi]

I have a question I'm hoping someone can help me with 


FPM recently had a (rather expensive) doll sent to my house in the US and asked that I send it along to her. Of course we want the doll insured and stuff, but also FPM doesn't want to get hit with ridiculous customs fees. So what we're wondering is: is the amount I insure the item for what determines the customs fee, or is it just the amount on the international slip thingy?


I hope my question made sense 


Thank you for any help!!

[ponylady]

I tried looking it up and here is what I found on the subject.  It looks like they use lots of different factors to determine the duty on items.  And it seems to me they take both into account when determining it. 
 
Hopefully someone from the UK can give more light on the issue as I am not exactly sure.
 Duty and Tax Calculation Methods
There are two generally accepted methods for calculating duty rates: CIF and FOB. Most countries use the CIF method. Some exceptions may apply. VAT (Value Added Taxes) are generally applied on the CIF or FOB + Duty value. The figures used below are for example only.
 
 CIF (Cost, Insurance, Freight) A pricing term indicating that the cost of goods, insurance, and freight are included in the quoted price. Duty is calculated by adding all costs together. See below for example.* 

Invoice Value $932 Insurance Paid $16 Freight Paid $52 Total CIF Value $1000 Duty Rate = 7% x .07 Duty Charge $70.00 Total CIF+Duty Value $1070.00 VAT = 18% x .18 VAT Tax Charge $192.60 CIF+Duty+VAT $1262.60

[Ringlets]

Thanks for doing some research Ponylady   Unfortunately in the UK we cannot avoid the awful high customs fees .
 I am not exactly sure of the amount FPM will get charged because it varies depending on value, insurance, and the type of goods sent. I paid about 20% of the value of my item in customs fees last time I imported an expensive doll  from the US   
we get charged customs fee on items that are non-gifts valued at  £15 or more
we get charged customs fees on items marked as gifts valued at £40 or more

Here is what I found on the UK HM Revenue and Customs site:

2.1 Does the sender have to declare the goods?
Yes. Under international postal agreements the sender must complete a customs declaration (form CN22 or CN23) which in most cases should be fixed to the package. The declaration includes a description of the goods, the value and whether they are gifts or commercial items. Any Post Office abroad should be able to give advice to the sender.

You are legally responsible for the information on the declaration; therefore it is in your own interest to ensure, wherever possible, that the sender abroad makes a complete and accurate declaration. If no declaration is made, or the information is inaccurate, the package may be delayed while we make further enquiries, or in some cases the package and its contents may be seized.

top ^2.2 Do I have to pay import duties and/or import VAT on goods sent to me?
Most goods arriving in the UK from outside the EU are liable to any or all of the following taxes:

■customs duty
■excise duty
■import VAT
and must be paid whether:

■you purchase the goods or receive them as a gift
■the goods are new or used (including antiques)
■the goods are for your private use or for re-sale
top ^2.3 What are the limits for customs duty and import VAT?
■Commercial consignments of £15 or less are free from customs duty and import VAT. For example, goods purchased over the internet with an intrinsic value not exceeding £15, will not be charged any duty or VAT but this does not include alcohol, tobacco products, perfume or toilet waters. See paragraph 2.6, 2.7 and section 3.
■If you are sent a gift with a value of £40 or less, and which complies with the rules shown in paragraph 2.5, it will be free from customs duty and import VAT, but this does not include alcohol, tobacco, perfumes and toilet waters.
■Customs duty becomes payable if the value of the goods is over £135 but duty is waived if the amount of duty calculated is less than £9.
In summary:

Goods Value*

 Customs Charges applicable

 
£0.01 to £15

 ■No customs duty
■No Import VAT
 
£15.01 to £135

 ■No customs duty
■Import VAT due
 
£135.01 and greater

 ■Customs duty due, but waived if the amount calculated due is less than £9
■Import VAT due
 

2.4 Gifts
Goods sent as a gift that are over £40 in value are liable to import VAT. Customs duty also becomes payable if the value of the goods is over £135 but is waived if the amount of duty calculated is less than £9.

To qualify as a gift:

■the customs declaration must be completed correctly
■the gift must be sent from a private person outside the EU to a private person(s) in this country
■there is no commercial or trade element and the gift has not been paid for either directly or indirectly
■the gift is of an occasional nature only, for example, for a birthday or anniversary
Note: if you purchase goods from outside the EU to give as a gift to a relative or friend, whether or not addressed to that person, is treated as a ‘commercial consignment’ for which the import VAT relief threshold is £15 (paragraph 2.3 refers).

3. Charges
top ^3.1 How are import charges calculated?
Charges are calculated by UK Border Agency (UKBA) staff at the postal depots where the packages are received. However, in some cases special arrangements are in place for goods purchased on the internet (see paragraph 3.4 below).

Value Added Tax (VAT) - Import VAT is charged at the same rate that applies to similar goods sold in the UK and applies to commercial goods over £15 in value, and on gifts that are over £40 in value. The value of the goods for import VAT is based on the:

■basic value of goods, plus
■postage, packing and insurance, plus
■any import (Customs or Excise) duties charged
Customs duty - customs duty becomes payable if the goods are over £135 in value but is waived if the amount calculated is less than £9. Customs duty is usually charged as a percentage of the value of the goods.

The amount of customs duty charged will depend on the type of goods imported and their value stated on the customs declaration CN22/CN23 (converted using the rates of exchange for the month of importation as shown on our website).The percentage varies depending on the type of goods and their country of origin. Duty is charged on the price paid for the goods including any local sales taxes plus postage, packing and insurance costs. However, the cost of postage is excluded from the calculation for customs duty on gifts except where the sender has used the Express Mail Service (EMS) as opposed to a standard mail service.

Where the value of gifts is below £630 per consignment a flat rate of duty of 2.5 per cent Member States will be applied, but only if it is to your advantage.

[okapishomapi]

Ridiculous >.<

Post Merge: February 24, 2012, 06:58:15 PM

Thank you very much for the help, though, ladies

[Ringlets]

no problem. its sweet of you to help FPM   Its such a pity that the customs fees are high

[FlyingPonyMonster]

So would The insurance cover be limited to the amount on the customs declaration?

I.e if we put $40 on customs slip and it gets lost will all we get back be $40?

[Breyer600]

That's right.  They don't allow you to insure a package for more than the value you mark on the customs form.

[FlyingPonyMonster]

Ok thanks! (if the parcel is lost how do they know what amount was actually on the customs form?)

[Breyer600]

The customs form has carbon copies.  The post office keeps one on file, gives you a copy, and puts the rest on the package.  Plus, I'm pretty sure they enter all the information in their computers when they take the package.

[FlyingPonyMonster]

Ah ok, makes sense! Here out customs forms are just stickers so don't match anything when you have tracking too!!