22 June 2016

Customs charges on your birthday presents - a Royal rip-off

James Daley

By James Daley LinkedIn

How Royal Mail and HMRC work together to ruin people's birthdays.

My mother in law loves sending parcels. She lives in Texas and almost every week she'll send something over for my wife or one of our kids.

This week, however, instead of receiving a package, we just received a note from Royal Mail letting us know that it had our package and that we'd need to pay almost £15 to get it released. That's £6.84 in import VAT plus an £8 handling fee from Royal Mail.

It was my birthday recently and I knew that the package included a present for me. I wondered whether my mother in law had pushed the boat out and bought me something expensive. Surely there wouldn't be tax to pay on something small.

I hopped on the internet and did some research. The rules are ridiculous.

Low limits

If the value of any gift that you receive from outside the EU is more than £34, then HMRC are within their right to apply import duty. 

When I turned up at the Post Office and inspected the customs label, it said that the package included one T-shirt worth $20, one tea towel worth $20, and one toddler T-shirt worth $10. That's a total of $50 - which at last week's exchange rate came in at £34.20. Just 20p above the threshold. The pound has rallied over the last week, and if the package had arrived today, it would have been worth £33.96 and avoided tax altogether. But HMRC have taken it upon themselves to apply their rules in the most rigid way possible, knowing that there's very little customers can do if they disagree.

The £34 threshold is meant to apply per person in the household. So given that the T-shirt was for me, the tea towel was for my wife and the small T-shirt was for my daughter, there's no way we should have been charged in the first place.

But when I called HMRC to try and get them to reverse their decision, I was told that unless my mother in law had clearly specified on her customs form that there were three gifts for three different people, then they were quite right to have hit me with the £15 charge.

I put it to the lady that it was harsh to expect citizens across the globe to anticipate the preferences of the UK's officious border control teams - to which I was told that it was all there in black and white on their website.

Paying for my own birthday present

As harsh as this policy was, I felt confident that I could convince the lady that the full size T-shirt and the toddler T-shirt were intended for different recipients. Coldly, I was told to download a BOR286 form, and send it back. If I could provide evidence that the gifts were intended for different recipients, then I could have my £6.84 import VAT refunded. However, I would have to make a separate claim to Royal Mail to get the £8 handling fee refunded.

Although I'm often minded to fight these battles on a point of principle, I just don't know if I can be bothered on this one - although I can see that there might be some comedy value in taking pictures of me and my daughter wearing each other's T-shirts. Sadly, I think I will be heading back to the Post Office to pay for my own birthday present.

It's desperately unfair and I imagine it happens to thousands of people a week. A few things need to change. First of all, the limit at which gifts are taxed needs to be raised. In this day and age, £34 seems a pathetically low threshold.

Secondly, there needs to be some lenience around how the limits are applied. If something comes in a few pence over the limit - and it clearly looks like a present from a friend or family, customs officials should be allowed to use their discretion. It's upsetting for both the sender and the recipient when people get charged for picking up their present, and HMRC needs to get in touch with its human side.

Thirdly, there needs to be some regulation around the scale of the handling charges. Royal Mail's £8 handling fee is completely over the top. All it has to do is pop a note through your door and collect the money when you come to pick up the package. And as a consumer, you have no option but to pay it.

Finally, there needs to be some easier routes to appeal. It can't be right that you should have to make separate paper-based claims to both HMRC and Royal Mail when a mistake happens. There should be an online portal where you can complain and where refunds can be made digitally.

Almost 5 million people in the UK were born outside the EU. Presumably most of these receive multiple packages from friends and family every year. Customs charges and import VAT are there to prevent people from importing large volumes of goods and dodging taxes. They were not designed to be used to ruin people's birthdays. Time for a rethink.

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