What are Duties and Taxes?

Whether a shipment is a gift or not, it must still go through an import procedure as determined by custom’s law in the destination country. The shipment is cleared through customs based on the origin country, the value and quantity, but not its purpose or intended use. Dutiable shipments are subject to a customs duty, which is a tariff or tax imposed on goods when transported across international borders.

The calculation of duties depends on the assessable value of a dutiable shipment. For the purpose of this calculation, dutiable goods are given a classification code that is known as the Harmonized System code.

This system has been assigned by the World Customs Organization and continues to evolve.

The payment of duties and taxes is typically the responsibility of the receiver, although DHL Express does offer the opportunity for DHL account holders to pay for them on behalf of the receiver

In that case, after shipment delivery, DHL invoices customers for the duties and taxes we paid on their behalf at destination, plus a small administration fee. This optional service is called Duties and Taxes Paid (DTP).

Taxes are imposed on goods when they are moved across a political boundary, although some free trade zones exist around the world (for example, the European Union). Taxes are usually associated with protectionism, the economic policy of restraining trade between nations.

Taxes are usually imposed on imported goods, although at times may also be imposed on exported goods.

All goods imported into the UK must be declared to the UK customs authority, HM Revenue & Customs (HMRC), and in most cases are subject to Customs Duty and VAT. This includes goods purchased online. Certain goods are also subject to Excise Duty.

The person receiving the shipment is legally obliged to pay Duty and VAT unless the sender has agreed to accept these charges in the contract of sale.

Learn your responsibilities! HMRC advice for goods sent from abroad

Please refer to hmrc.gov.co.uk for information and up-to-date guidance.

You may be charged customs duties and taxes for something purchased online because:

When buying goods online, you should always check whether they are either being sent to you from the UK or another country.

Note: Different rules apply when buying goods for commercial use.

A gift is defined as something sent directly by one private individual to another and such goods do not attract import tax if the value is below stated local thresholds. The threshold in the UK is £39. Customs Duty also becomes payable if the value of the goods is over £135.

Ordering and paying for goods that originate outside the UK for shipping to a person other than the purchaser, does not satisfy the customs definition of being a gift.

You can also refer to Notice 143 Paragraph 2.4 on the HMRC website for further clarification on the criteria.

These charges are not included in our tariff because the Customs authorities in the destination country determine whether any duties and taxes are applicable when the shipment arrives.

When DHL pays Duty and VAT on your behalf, an Advance Payment or Disbursement charge will be added to your Duty and VAT statement/invoice for clearing the shipment through customs.

The charge is currently £11.00 or 2.5% of the total Duty and/or VAT incurred, whichever is the greater.

If the total Duty and/or VAT incurred is less than £440 then a flat amount of £11.00 will be incurred as this is less than 2.5%

For example, if the total Duty and/or VAT amount equals £125.80, then £11.00 will apply.

The 2.5% will be incurred if the total Duty and/or VAT is greater than £440.00. For example, if the total Duty and/or VAT amount equals £490.00 then an amount of 2.5% will apply i.e. £12.25.

If you are a regular importer, you can apply to HMRC for a duty deferment account for the payment of most customs charges, such as import VAT, customs duty and excise duty. A duty deferment account lets you make one monthly payment via Direct Debit instead of paying for individual shipments.

Customs assess the amount of Duty to be paid based on the information provided on the DHL Waybill and customs paperwork, in particular where the goods where sent from, the type of contents, their value and the weight of the package.

The value for VAT is the declared value of the goods plus the transport costs to the country of destination plus the Customs Duty.

Example of Duty calculation
Value of goods £80 + transport to the UK £35 = £115
Total value for Duty £115 x 3.5% Duty = Total Duty payable £4.02

Example of VAT calculation
Value of goods £80 + transport to the UK £35 + Duty charges £4.02 = £119.02
Total value for VAT £119.02 x 20% = Total VAT payable £23.80

Total import Duty and VAT charges payable on import of these goods = £27.82

For more information and advice about Duty and VAT, contact your local Customs office, visit hmrc.gov.uk or call HMRC directly on 0300 200 3700.