Is VAT owed on gifts received from overseas?
I got an invoice from FedEx for over £40! Why? And must I pay it?
Robert emailed me: “My brother in Canada sent us Christmas presents of a scarf and gloves, delivered in good time by FedEx.
But in January I got an invoice from FedEx for over £40! Why? And must I pay it?”
Any goods over a certain value sent from outside the EU attract VAT (unless exempt, such as books) and customs duty when they arrive. Your scarf and gloves were a gift, so neither tax would be due if the value had been under £39.
But you write that your presents were worth well over that limit. If you’d ordered them from a business, the limit is £15, not £39. In both cases, if the value is above £135, customs duty is due as well. Those taxes must be paid. On top of the taxes, the carrier adds a handling fee, which goes under various names. Royal Mail, for example, adds £8. Some believe it’s unenforceable, but if the carrier won’t release your goods without payment, then that’s a moot point.
If your brother had sent each gift separately addressed to each of you, no tax would have been due. Perhaps a tip for next Christmas!