I'm leaving for the UK this week and packing a bunch of gifts and an engagement ring that I intend to give there.
Is the VAT only for UK citizens or will I have to declare the value of my gifts and pay VAT?
From reading this it seems I will have to.
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1Will the ring remain in the UK, or will it depart the EU customs area on/shortly after?– GagravarrCommented Jul 20, 2015 at 22:07
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It'll remain there for a few months at least.– MACCommented Jul 20, 2015 at 22:09
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2In principle, you do have to pay VAT on gifts and personal items, even items you may have owned for a long time e.g. bringing all your stuff while migrating to the UK. But in practice and from experience they won't check if you have it on your or in your checked luggage. But they will charge VAT if you send it via post etc.– EdmundYeung99Commented Jul 21, 2015 at 5:34
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4@MAC Could you please tell us the approximate total value of items you smuggled into the UK?– CGCampbellCommented Sep 22, 2015 at 3:10
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2 Answers
The simple answer is that VAT is not only for UK citizens but for any goods (and services) sold or coming into the UK/EU. For goods produced or sold in the EU, the company selling it takes care of the VAT for you (but you are paying it). For goods you are importing yourself, you have to take care of the formalities yourself.
Beyond that there are a few quirks in the system, some allowances for things private persons carry with them for non-commercial purposes, possibly different rules if you are only staying a very brief time or bringing stuff with you as part of a move to the UK and of course not everybody who disregards the rules gets caught but the principle is simple: VAT must be paid when importing stuff into the UK, even as a non-citizen.
Of course, in the EU, you can always walk through the green channel and get lucky. Only a small proportion of all luggage is searched and a small number of travellers are questioned, there is no need for everybody to fill in a landing card or talk to a customs officer like there is in some other countries. But that's just a matter of enforcement tactics, not a proof that there are no limitations on what you may import (see also Why do some countries require everyone entering to see a customs officer, and some don't?).
And if you think you are home safe because you brought something over the border once, read Ridiculous and unreasonable taxes for used electronic devices in europe. You can still be taxed, possibly even forced to pay some penalty, many years from now, if found out.
Finally, it's natural to want to know the rules in advance, have an idea of what it might cost you and avoid the hassle of going through the red channel if you can avoid it but you can also simply ask this question to a customs officer on arrival. If you are covered by an exemption, they will tell you, there is no downside in approaching them when you are unsure.
The VAT is not only for UK citizens, as it applies to anyone in the UK. Declaring and paying VAT on your items depends on how much the total of gifts & ring come to.
If their total value is less than £390, you don't have anything to worry about. This is lower than the duty free allowance so you don't have to declare the goods.
If you plan on leaving the gifts/ring there and their total value is more than £390 but less than £630 you will have to pay customs duty at a discounted 2.5% rate. You will have to pay VAT at the applicable rate.
If their total value is greater than £630 you have to pay customs duty at the applicable rate. You will have to pay VAT at the applicable rate.
There is a reference to a £36 or £40 duty free limit on gifts, but given that the duty free limits are higher it doesn't end up applying in this scenario.
