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Online shoppers warned of unexpected tax bill

Online shoppers have been warned that they could face an unexpected tax bill when ordering gifts from outside the EU.

HM Revenue & Customs (HMRC) is reminding consumers that while they may think they have found a bargain, many people fail to factor in VAT and customs duty.

‘We know many people like to go abroad at this time to buy their Christmas gifts, or buy online from non-EU countries, and think that the ‘cheaper’ price they see is always the price they finally pay,’ said Angela Shephard, Head of Customs Policy at HMRC.

She continued: ‘HMRC is keen to remind the general public how much they can actually bring back from abroad or buy from an online overseas seller without having to pay import duty or VAT.

‘You don’t want to be faced with unexpected extra charges, when you thought you had found a bargain.’

Goods valued at more than £15 that are purchased over the internet or by mail order from outside the EU are liable to VAT.

Customs duty might also be due for goods valued at more than £135, although this will depend on what they are and where they have been sent from.

If someone receives a gift from outside the EU, import VAT will be due if the package is valued at over £40. To qualify as a gift, the item must be sent from one private individual to another, with no money changing hands.