Promotional material

Parcels communications toolkit - key messages

Published 19 March 2019

This promotional material was withdrawn on 3 February 2020

This page has been withdrawn because it’s out of date. Read the current guidance on tax and customs for goods sent from abroad. You can also read about the transition period.

Parcels Digital Service - key messages

If the United Kingdom (UK) leaves the European Union (EU) without a deal, the UK import VAT rules will change for goods sold to UK buyers (including businesses and individuals) sent in parcels. The rules differ depending on the value of the goods in the parcel. Further information about how to work out the value of a parcel can be found on GOV.UK.

When the value for all goods in the parcel is £135 or less, sellers outside the UK must pay the UK import VAT for any parcels sent to UK buyers after the UK leaves the EU. This applies even if the goods were sold before then. Sellers outside the UK include those in the EU, outside the EU, and the Channel Islands.

The existing tax relief on goods worth £15 or less will not be introduced for sellers within the EU. It will also be removed for sellers outside the EU. The UK government has taken this decision to protect UK retailers from being undercut by VAT free goods entering the market. This also follows the global approach that is being taken with regards to this tax relief.

If the value for all goods in the parcel is more than £135, or if the parcel contains excise goods including alcohol, tobacco or perfume, there will be different rules. UK buyers will need to pay the UK import VAT, Customs and / or Excise duty on these goods. The parcel operator will apply any necessary charges to the parcel and seek the payment direct from the UK buyer.

If sellers outside the UK sell goods in parcels above and below the £135 threshold to UK buyers, the seller should only report and pay the UK import VAT on the goods in the parcels worth £135 or less.

How sellers can pay UK import VAT on parcels worth £135 or less

Sellers can pay the UK import VAT on parcels in one of two ways:

• register for the UK HM Revenue and Customs (HMRC) new online service to report and pay the UK import VAT due
• pay a parcel operator that offers a service to pay UK import VAT to HMRC on the sellers’ behalf

An online service has been introduced by HMRC to enable sellers to report and pay the UK import VAT on goods they sell and send as parcels to UK buyers for each accounting period.

Sellers must register if they sell zero-rated goods. Zero-rated goods are still VAT-taxable but the rate of VAT charged is 0%. Sellers must still submit a report even if no UK import VAT is due.

Sellers outside the UK should not register if any of the following apply:

• all goods they sell to UK buyers are sent in parcels worth more than £135
• if they have to pay Excise Duty on all the goods they sell
• their business is based in the UK
• they pay a parcel operator that offers a service to pay UK import VAT to HMRC on their behalf
• the goods are sent to the UK under a customs special procedure

Individuals outside the UK sending a genuine gift direct to another individual in the UK do not need to register or account for these using the service. Such gifts must be non-commercial and occasional in nature.

For excise goods - import VAT, Customs and Excise duty is due regardless of value, and will be collected from the UK buyer by the parcel operator. If sellers outside the UK send parcels containing a mixture of goods (e.g., some excise and some non-excise goods), the duties and import VAT will be collected from the UK buyer via the parcel operator.

Registering and using the UK import VAT on parcels service

If sellers outside the UK choose to use the online service to pay UK import VAT, they will need to:

1. Register for the service
2. Choose an accounting period from those available
3. Keep records of goods worth £135 or less they sell to the UK for each accounting period
4. Work out the UK import VAT due on the goods they sell to the UK for each accounting period
5. Tell HMRC how much UK import VAT they owe for each accounting period
6. Pay HMRC the total UK import VAT due for each accounting period

Sellers can register for the service now on GOV.UK to be ready to use it if the changes are introduced.

Once a seller registers for the online service, they will be given an UK import VAT on parcels reference. The parcels reference should be included on the outside of the parcel if you send parcels via a universal postal service provider, for example Deutsche Post or La Poste.

For other parcel operators the reference should be included in documentation accompanying any parcels sent to UK buyers, for example the airway bill. The parcels reference enables parcel operators to identify that the seller has registered for the service to pay UK import VAT due and they can then deliver the seller’s parcels without any delays.

HMRC will receive data about parcels that are entering the UK. Parcels without the correct reference may be delayed.

To use the service to pay UK import VAT each accounting period, sellers will need to keep records of:

• the number of parcels worth £135 or less sold within the accounting period
• the total value of all the parcels sold, including shipping and insurance, in pounds sterling
• the rate of UK import VAT for all parcels sent to UK buyers

If sellers outside the UK do not follow the new rules for UK import VAT, their parcels are at risk of being delayed or stopped from entering the UK. The UK buyer may have extra tax and fees to pay, and the seller may have to pay a penalty of £1,000.

If sellers send goods to the UK to be stored before they are sold on to UK buyers, they will still need to comply with the existing customs controls and VAT rules. This includes paying any UK import Duty and compliance with UK domestic VAT rules. These are detailed in VAT Notice 700/1: who should register for VAT .