Why should you order products from the UK?

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According to Wikipedia,Online shopping is a form of electronic commerce. It allows consumers to directly buy goods or services from a seller over the Internet using a web browser.

Products are easily ordered from any vendor in the world.However, it is essential and efficient to order products and services from the same country of residence. Shopping Online within the European Union  is free with no additional charges but if you order from outside the European Union and including countries like China and the USA, you may deal with additional charges.This includes import customs duties and Value Added Tax (VAT) which would be explained  below.

1.Value Added Tax(VAT)

VAT in the EU is a general, broadly based consumption tax assessed on the value added to goods and services.In the United Kingdom,value-added tax was introduced in 1973.VAT  replaced Purchase Tax and it is the  third-largest source of government revenue, after income tax and National Insurance. HM Revenue and Customs administered it and collects it primarily through the Value Added Tax Act 1994.

VAT Exceptions

According to uk.gov ,there’s no VAT due on gifts given to the same person if their total value in a 12 month period is less than £50.

VAT is charged on the combined value of link-save items if the incentive product:

  • has a resale value of less than £1
  • has a sale value of less than £5
  • costs you less than 20% of the total of the other items in the offer
    isn’t sold at a separate price from the main product

Also free samples for marketing purposes are not charged with VAT.

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2.Customs Duty

The Economic Times defines Customs Duty as a tax imposed on imports and exports of goods. There are various sorts of custom charges when merchandise are introduced for either import or export.

The primary custom charges will be import duty and tax . Import duty will fluctuate from item to item and the import assessment will be an increasingly steady figure.Charges differ depending on item being imported and in certain countries by the district or condition of the destination

If you somehow managed to bring items into the UK then the standard pace of VAT for import is 20%. Reduced VAT, even down to zero, will apply to item bunches including groceries even  pharmaceutical items.

Example calculation

I am  ordering a set of Leather Jacket for winter from the US, which I’m importing to the UK

Firstly, I need to calculate the customs value:

$3,00 (3x $100 rackets) + $45(shipping cost) + $6 (insurance) =$351

12A Peruvian Body Wave Frontal Lace Wig

IMPORTANT – I now need to convert this amount to GBP (British Pound) for tax purposes but this cannot just be estimated or taken from an online exchange site like travelex, no – instead you are given the rate of exchange to use each month by HMRC, which you can find here:

Exchange rate 2019

So for my calculation, the $-£ exchange rate for November 2019 is 0.775 which means my import is valued at £272.02($351/0.775).

The third step is to calculate the import duty, which for men jackets from the US is 5.63%:

£272.02 x 5.63% = £15.31

Next is to calculate the VAT at 20%. And remember, this is paid on the total customs value (£272.02) PLUS the duty paid (£15.31), so:

£272.02 + £15.31 =

£287.33 x 20% = £57.47

That means all that’s left for me to do is add the import duty and VAT together to find out the total amount of import tax payable on this order, which is £57.47 – making my total landed cost for the 3 leather jackets £344.8 (total product cost + all import taxes).

3.Additional costs

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*In the event of a ‘no-deal’ Brexit, items arriving from the EU will be treated the same as the rest of the world.

Any charges are calculated and applied by Border Force on behalf of HM Revenue & Customs (HMRC). These charges aren’t applied by Royal Mail.

For more detailed information on Royal Mail and Parcelforce processes, check out HMRC’s: ‘A guide for international post users’.

We’ll then send you a Fee to pay card. This shows how much you need to pay before you can receive your item. The amount will include our £8 handling fee.

With Dhl,If someone sends you a gift from abroad that is over £39 in value, you will also be obliged to pay the Duty and VAT unless the person who sent it has agreed to pay it themselves. Likewise, if you are the person sending you need to remember that if you don’t take the time to include the proper invoices then your shipment could be held in customs or the person you are sending to may be charged too much Duty and VAT.

Delivery Times

Most Online Orders have a variety of delivery times option depending on the delivery destination and also the product ordered – specific, Standard, Economy .However ordering from outside the UK excludes you from enjoying delivery options like same day delivery  or next day delivery which is fast and reliable if you need the product or service urgently.

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Customer Service

Online Shopping sometimes has issues with item ordered including wrong size of items,wrong number of items ordered and other valuable information which needs urgent assistance to solve them.However ordering from the UK or same country of residence give you the advantage of visiting the actual shop to get the issue sorted without any delays which is one of the greatest advantages involved 

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References

litrg.org

uk.gov

www.cbp.gov

ec.europa.eu

export.org

trustpilot

andrewminalto

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