The Post Office Stage Coach (Henry Alken Snr)
Items imported into the UK are liable to taxation. Any goods imported from non-EU countries into the UK over the value of £15 are liable to import VAT (Value Added Tax - currently @ 20%). Gifts between private individuals over the value of £36 are also liable for VAT. Goods and gifts over these values may also be liable for customs duty but in general customs duty for goods up to the value of £135 is not levied. Although the charge labels on packages for which tax is due are identified as "Border Force" - HMRC (Her Majesty's Revenue and Customs) the tax is collected by the Royal Mail and must be paid before the package will be delivered. For each charge the Royal Mail include a "handling fee" of £8.
Whilst there is a discretionary excess of £9 for customs duty - e.g. any customs duty calculated as less than £9 is not usually levied - there is no such excess for VAT. This means that if your package is valued at £15.05 then VAT will be levied at 20% of £15.05.
Whilst I have no real issue with the levying of VAT I do have a problem with the Royal Mail £8 "handling fee". Leaving aside for a moment the questionable practice of levying a charge in order to collect a charge (e.g. HMRC levying an "administration charge" for processing your tax bill) the fee amount seems excessive and often exceeds the VAT being charged, resulting in a very high proportion of the value of the item. Let me give some examples:-
Item Value £15.40 - VAT @ £3.08 (20%) - Handling Fee £8 (52%)
Item Value £27.25 - VAT @ £5.45 (20%) - Handling Fee £8 (29%)
Item Value £3.22 - VAT @ £6.32 (196%) - Handling Fee £8 (248%)
In the first example the item value only exceeds the criteria for VAT being charged by 40p but the handling fee amounts to more than twice the VAT rate. And no, I'm not making the last one up. Some operative in the Royal Mail or HMRC valued this item at USD$49.50 even though on the customs declaration the decimal point was clearly between the '4' and '9' and there was no '0' after '5'. Of course these charges had to be paid before the item could be delivered and obtaining a refund required the completion of a form submitted with evidence - all at the customer's own expense.
Since the receiving customer has paid for the item and usually the postage and since the tax charge notification is a matter between the Royal Mail and HMRC it seems curious as to why they think the customer should pay extra for the privilege of being required to pay the tax due. The "handling" is not something requested by the customer and is hardly a service provided for his or her benefit. It is a bit like a traffic warden adding a "handling fee" to a parking fine levied on behalf of the local council - a way to defray the cost of enforcement onto the ordinary citizen when his taxes, supposedly, already pay for the cost of that enforcement. In the case of post the cost of delivery has already been paid by the sender. The customs inspection is a government intervention facilitated by the Royal Mail and by the customs declaration completed by the sender. Why should the customer have to pay for that intervention on top of any tax due?