UK lowers VAT liability threshold on small parcels

Fri 4th Jan 2013

The UK has lowered the threshold for charging VAT on small gifts imported into the UK from outside of the EU.  From 1 January 2013, gifts between private individuals may only be sent VAT-free if they are under the value of £36 per package.  Previously, the limit had been £40.

The adjustment to the UK VAT threshold has been made by the UK VAT authority, HM Revenue and Customs.  It has arisen to an annual adjustment for fluctuations between the GBP and Euro currencies.

Withdrawal of UK VAT exemptions

In April 2012, the UK withdrew the Lower Value Consignment Relief scheme, which had enabled many UK retailers to locate their DVD/CD/Book online distribution centres in the Channel Islands and ‘import’ goods into the UK without a VAT liability if the value of the package was below £15.  This led to the closures of many such businesses, particularly in Guernsey.  Since then, the Channel Islands have requested a derogation for the delivery of flowers.