I had a letter from Royal Mail the other day asking me to pay VAT on a parcel I had ordered from the USA. The parcel arrived today, after I'd paid the VAT and Royal Mail's handling fee.

So what? 

Well I've bought quite a few things from the USA and received the goods without paying VAT, so it's a bit of a lottery.

BUT...

If you are buying low value items, up to £18 including delivery, you can get these imported free of VAT. HMRC have been concerned that UK businesses are misusing this relief by sending goods, such as CDs and DVDs, out to the Channel Islands and claiming that they are selling them there to UK customers. Provided the items are within the £18 limit they don't account for UK VAT on them. They'll even split an order into smaller packs to take advantage of the relief from VAT.

It appears, according to an article on the Guardian website, that HMRC are now looking at how they can beat this loss to the Revenue by saying that the use by UK businesses of this system is abusive. I can see how HMRC would consider that they had a case to bring against some of the UK retailers. If you are interested in that aspect I suggest you read the Guardian article.

What did I want to say?

Oh, yes...

If you are looking for CDs, DVDs, SD cards, Compact Flash cards, etc. that are relatively cheap, you might find you can save money by buying from a business outside the EU. The important thing to remember is that the real limit is £18 but that HMRC don't always spot those that are over the limit, so you can get a real bargain. On the other hand, if your purchase only just exceeds the limit and you have to pay VAT, you'll also pay Royal Mail or Parcel Force a clearance fee that might make the whole exercise rather expensive.

So, the lesson to take from this article?

Be aware of the limit.

Expect to pay VAT if your order is over the limit.

If you receive the goods without paying VAT, that's a bit of good fortune and something that is unlikely to happen every time.

If you've been lucky, let me know in the comments below. If you've had to pay VAT, have a moan in the comments - get it off your chest!

I'm looking forward to reading your comments.

If you have been, thank you for reading this far.