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My sister sent my girls American Girl dolls as Christmas gifts.  She said she sent them a while back, but due to the holidays, the strikes, etc., it only arrived at the ParcelForce warehouse just before Christmas.  After Christmas, we received a notice stating that we owed money on VAT and a clearance fee.

We were rather shocked.  Why should we have to pay taxes on gifts that have already been taxed and paid on the other end?  She spent over $200 for the dolls, $60 for mailing it, and now we have to pay almost another $50 to clear it and tax it.

After some investigation, we found out that they can tax on gifts if it is worth more than 36 GBP.  They will not charge Customs duty if it amounts to less than 7 GBP.  However, all alcohol and tobacco will be charged excise duty.

The clearance fee is a handling fee that Royal Mail and ParcelForce charge to cover their expenses: handling the postage, dealing with customs, paying import duties for you and collecting import duties from you.

I don’t know what the US charges, if anything, for similar items.  We’ve never had to go through this from the other end.

Other things to note is that VAT is charged on internet sales if bought outside the EU and amounts to more than 18 GBP.  Customs duty applies to goods valued over 120 GBP (except as above).  Exceptions apply to alcohol and tobacco in that you may still have to pay excise duty.  There are even more complicated rules for the Channel Islands.  I still don’t understand how the Channel Islands fit into the scheme of things.