VAT and Handling Fees - U.S. to U.K. Shipments | Overview

UK Royal Mail has fees on imported packages that come from outside of the European Union. The two main fees involved in these are VAT (value-added tax) and the Royal Mail handling fee.

Starting January 1st, 2021, all goods shipped to the UK are subject to VAT regardless of the price of the goods in the shipment. Previously, only goods over the £15 threshold were subjected to a 20% VAT. You can use the Avalara VAT Risk Assessment tool to find out if your company will need to be VAT registered.

The recipient handles paying the VAT and the handling fees once the package arrives in the UK. The seller does not charge these two fees at the time of the sale.

  • The VAT tax standard rate is 20%
  • The handling fee for all Royal Mail imports is £8
  • Additional fees if customs examines a package

Inform UK purchasers that packages coming from the USA will incur VAT and handling fees when it arrives. Royal Mail will leave a notification to pay this fee so the customer can receive the package. Royal Mail provides a link on its customs and import page to make a customs payment online.

For more information, read Royal Mail’s page on importing goods and customs.

Comments

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Is the £8 handling charge inclusive of VAT?

 

I am guessing that when accounting for these fees (we refund the customer) we should have 2 lines on the bill

Handling fee £8 (includes 20% VAT)

Import VAT - whatever the amount is.

 

Thanks

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Hello Rebecca, and thank you for posting to our support center.

Based on our information, it would appear that the handling fees are not inclusive of VAT, since they are charged by the Royal Mail specifically.

 

While you can add the first static line for the Handling fee to your Packing Slips, unfortunately we don't currently have a packing slip variable available to calculate your VAT fees based on the shipment value.

That being said, our community has considerable influence on the course of our development. The more interest we see for certain features or variables, the more likely they will be added to our app.

Would you consider reposting your specific needs and interest in a VAT packing slip variable, to our Feature Requests forums? These are monitored by our CEO and Product Team and used to prioritize future development work.

We look forward to seeing you in the Feature Request forum and taking an active role in helping to shape ShippingEasy!

Thank you!

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Jacen thanks for this.

More questions.

Does £8 include VAT then?  It definitely isn't listed as a separate item in the Royal Mail documentation and so I am inclined to presume it includes VAT.

What is clear is that it's not an Import VAT item (i.e. wholly chargeable to VAT) it is a personnel charge so is a total fee plus VAT £6.66 + £1.33 VAT).

Would you agree?

 

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