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Increased De Minimis to $800 for US tax & duty free imports

By Chris Dawson March 9, 2016 - 4:47 pm

US Customs Border ProtectionA year ago the Low Value Shipment Regulatory Modernization Act of 2015 bill was put before the US congress. The aim was to amend the Tariff Act of 1930 to increase from the value of goods an individual could import by mail (effectively ecommerce) from $200 to $800.

Importantly as well as no duties or taxes to be collected, no formal customs procedures are required which means less paperwork for ecommerce merchants.

The rise to $800 has been approved and comes into force with immediate from the 10th March 2016. The bill’s intention is for that figure to be adjusted annually for inflation after 2016.

The duty-free exemption of $200 had not been updated since 1993. In 2012 exemption for travelers returning to the United States from abroad was raised from from $400 to $800, so the new allowance for items shipped to the US will now match the travel allowance.

David Jinks of ParcelHero who (tipped us off about the change) told us that the new higher limit covers most goods sold by the majority of the UK’s smaller internet retailers such as marketplace traders. The new threshold – around £560 at today’s exchange rate – means that your US customers won’t be presented with a duties charge before they receive their items. This should cut down on the “where’s my item” queries when an item is held in customs pending the customer payment.

We would expect that eBay will adjust their Global Shipping Charges to take into account the new $800 level. Whilst a UK retailer will see no difference in the money they receive, eBay will collect the relevant duties and tax at the time of purchase so there’ll be nothing to pay when the parcel arrives.

It would be great to see a marketing campaign informing US buyers that their purchases under $800 will be free of import duties. If you have a website which targets US buyers it will definitely be worth bringing the more generous limit to your US customers notice.

  • Tinker
    2 years ago

    Far cry from the U K s bunch of chiseling pillocks, we are often asked to pay duty on returns never mind imports

    • Kyle
      2 years ago

      All EU members must set a de minimis between €10 and €22. So depending on exchange rate £15 is about as high as the UK is allowed to go.

    • Tinker
      2 years ago

      Surely the EU dont tell The daft buggers to treat a dollar value as pounds then ignore the returned to sender sticker on the package though

    • Tinker
      2 years ago

      We wonder Circumventing EU directives is the reason why Hmrc are so lenient with chinese importers

    • Kyle
      2 years ago

      The reason HMRC is lenient with the Chinese is that the WTO rules are very complicated. The rules are designed for high value consignments (we’re talking £1000s+) and are just not worth the work for anything less. WTO rules say countries can’t randomly reject imports so HMRC has to let them through.

      Smart governments like the US and Australia recognise this and so set a high de minimis. Greedy governments like the EU don’t care and want all the tax they can get.

    • Kyle
      2 years ago

      Returned packages should be charged duty and VAT. It’s in the WTO customs valuation handbook. Even things like “free” replacements should attract tax.

      The WTO rules aren’t a problem since you can claim all those taxes back. The only problem is the admin fees added by RM, ParcelForce, etc. The only way to avoid those admin fees is to raise the de minimis which is an EU responsibility.

      tl;dr HMRC is stuck between the WTO and the EU.

    • Tinker
      2 years ago

      Faulty or unwanted Returned goods from private individuals, previously exported, then charged import vat and tax is Utterly idiotic the WTO are as daft as the EU if what you say is correct

    • Kyle
      2 years ago

      And how should HMRC determine whether an addressee is a private individual or a company? Suddenly it once again becomes too much paperwork.

      This is entirely the purpose of a de minimis threshold. The fact that the EU sets one which is far too low is entirely the EU’s fault.

    • Kyle
      2 years ago

      VAT and duty are currently governed by the EU. If you believe they are ill managed then you should complain to the EU as HMRC is just following the rules the UK has signed up for.

      I don’t understand why you are so intent on blaming HMRC when they have no control over these matters. You are wasting your energy by directing your anger at the wrong people.

    • Tinker
      2 years ago

      Do you have some connection to HMRC,? the we were only following orders excuse is a bit lame

    • tinker
      2 years ago

      if HMRC simply follow rules , is their a rule that allows them to change the currency exchange rates when charging tax, is their a rule that allows them to ignore some packages and not others

    • tinker
      2 years ago

      ” how should HMRC determine whether an addressee is a private individual or a company?”

      simples its called a cn22 form

    • Kyle
      2 years ago

      CN22/23 forms are governed by the WTO valuation procedures that we are talking about. The value you put on the CN22 should obey the WTO rules I have previously mentioned.

      The only exceptions are packages below the de minimis and the de minimis threshold is governed by the EU. Thus HMRC can’t do anything unless the UK were to leave the EU.

    • tinker
      2 years ago

      and no one ever breaks the speed limit or smokes weed

    • Kyle
      2 years ago

      Sometimes you also get banned for breaking the speed limit or go to jail for smoking weed. So why are you complaining that sometimes, maybe, when their periods are aligned and once a fortnight on a blue moon, HMRC actually charges you the correct tax?

    • TINKER
      2 years ago

      we complain because its an unreasonable and ill managed tax , if all rules and conditions were just accepted without complaint, there would be no need for governments or parliament,s councils or judges

    • Kyle
      2 years ago

      No* there isn’t a rule that allows them to change the currency. But there are rules to dispute the charges – did you follow them? Was the currency properly declared? You are meant to use the three letter ISO codes and not symbols like £, $, etc.

      (*There are some exceptions where they can change the value, such as if they don’t believe the CN22 and open the package and find an invoice inside they can use the value on the invoice rather than the value on the CN22. There are a bunch of other exceptions but they’re not likely to affect small packages.)

      Yes, as I’ve already mentioned, there are rules that allow them to ignore packages. Under WTO rules the default is to let packages through so if they don’t have time to check a package it has to be allowed in.

      I have no connections to HMRC but I do realise that being angry at them over these issues is barking up the wrong tree. I believe it is much healthier to direct my anger at those who are responsible – the WTO and the EU.

    • Tinker
      2 years ago

      We appreciate the debate and admire your knowledge though Its HMRC that apply and manage the regulations not the EU or the WTO

  • Dion Jackson
    2 years ago

    This is great for small businesses and individuals who do one time international shipments from Canada to the United States, its bad for people who work in brokerage as they will be seeing less shipments that need customs clearance..considering that a lot of them are small package shipments valued at less than 800 dollars….especially hold specialists

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