I recently bought something from a seller on eBay in the USA. The item cost $41 [£26] but I had to pay another $20 [£13] in import charges, made up of £5 VAT and an £8 administration fee to Royal Mail. These charges added 49% to the cost of the item.
Under current rules UK value added tax at 20% is due on imported items valued at over £15.01. Then there is the £8 administration charge from the Royal Mail.
This didn't use to matter because customs and excise never bothered to collect trivial amounts. Now that the UK is bankrupt they do.
The problem is that the £15.01 limit is ridiculously low, and it is killing eBay purchases by UK buyers. And it is not only eBay; a lot of other US online companies are affected.
If eBay and the other companies want the business of UK buyers they need to lobby to get the limit raised.
One sign that this is a significant problem is that some US sellers on eBay have stated putting notices on their pages saying that they will not enter a false value on a customs declaration or identify an item as a gift. That's very virtuous but it must be costing them money because UK buyers will not bid on their items.
eBay has its Global Shipping Program which allows UK buyers to pay import VAT, postage and admin charges at the same time that they pay for the purchased item. The problem is that this is even more expensive. I recently bought some 'must have' items from a US seller and paying for the item through Global Shipping would have added more than 30% to the cost, compared with paying 20% VAT plus £8 when the items arrived in the UK. I do not know if eBay are using their Global Shipping Program as a profit opportunity but I avoid sellers who offer it.
In the instance just described the seller sent me a PayPal invoice for the cost of the item plus postage and I paid that. Then I paid the 20% VAT plus £8 when the goods arrived in the UK. That was a lot cheaper than using Global Shipping.
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