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VAT: Open and shut case of import value deception


Goods entering the UK are subject to import duty and import VAT, which can eat into any savings from buying abroad as fashionista Karen Langley discovered.

8th Apr 2022
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We live in a global marketplace, and as consumers we can buy goods from the local high street or from a company on the other side of the world.

The growth of internet shopping and online marketplaces has made buying goods from anywhere so much easier. But goods entering the UK will be subject to import duty and import VAT, which may well eat into any savings from buying abroad.

Karen Langley

Some (unscrupulous) traders will often mark down the value of the goods on the shipping and importation documentation. They also mark the items as a gift and with a value that does not trigger import duty and sometimes escapes the VAT net due to being a low value item.

Karen Langley (TC/2020/03165) is an interesting case (literally). Here, the consumer made a purchase from a private seller on eBay, the seller was in USA and described the items as Chanel Coco Trolley Caviar Luggage suitcase and travel carry-on bag xxl set. So this is case about a case. 

The sale was recorded by eBay as $14,300 and $99.10 postage ($14,399.10 in total). The seller packaged the goods in an old cardboard box and a black sack and they were marked as a gift with a value of $500.

The courier calculated duty and VAT based on the $500 value, equating to £192.81 which was paid by Mrs Langley in advance of the goods arriving into the UK. 

When the goods arrived, Border Force seized the items and concluded they were mis-declared and notified Mrs Langley in writing. The true value of import duty and VAT was over £2,500

Mr Langley contacted Border Force by telephone seeking to have the items restored. He explained that the goods were purchased for $14,399.10 as a birthday gift and they were not involved in the sending of the parcels. He felt he had been honest and co-operated with Border Force – why else would he call them and disclose this information?    

Later on, as matters progressed, a witness statement from the seller/sender stated that the luggage was advised as being a birthday gift for Mr Langley and this was why the item was marked as gift, rather than as luggage. The value of $500 is the maximum value that UPS uses for items marked as gifts and so the courier had determined the $500 value based on their gift value policy.

Nonetheless, Border Force took the view that the customer was dishonest, the main reasons being

  1. It is common for the customer to blame the sender or shipping agent for an error
  2. Mr Langley calling to restore the goods and explaining they cost $14k was more to do with distancing themselves from the attempted deception
  3. The true value of the goods and Mr Langley’s phone calls/written correspondence was only after the seizure and so could not be seen as being honest and open
  4. Having already paid £192.81 import duty/VAT, they must have known this was too low for items costing $14,399.10 and yet they never questioned the calculation or payment made to UPS
  5. Both the seller and buyer were happy to ship $14,000 of goods but only insure them for $500. Had the goods been lost, either the seller or Mrs Langley would suffer a significant loss. The risk seemed disproportionate for the value of the goods.

Border Force concluded that the mis-declaration was a deliberate attempt to avoid duty/VAT and that it was a dishonest act.


The idea of marking packages as gifts and of low value is commonplace, more so post-Brexit where family members might be sending gifts to loved ones in UK/EU and tempted to low-ball the value to avoid custom duties. 

There have been articles in the media recently of people in UK being sent gifts from EU friends and family and then being hit with import duty and VAT – marking goods as £50 and as gifts is a very real temptation.

This case (tribunal) about these cases (Chanel Coco) was about restoring seized goods, and in matters relating to restoration of seized goods, it is for the appellant (Mrs Langley) to prove their case. 

The explanations given by Mr Langley are plausible, but then so are the arguments put forward by Border Force and it was their arguments that held greater weight. 

If buying goods from an online market place like eBay, often sellers may indicate a willingness to mark down the value of goods for lower value items. It is perhaps a low risk for both seller and buyer, but where the goods have a significant value, the risk of seizure increases and as demonstrated in this case, Border Force take a somewhat robust and unrelenting approach to whether someone is acting dishonestly or not.


Replies (1)

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By accountantccole
11th Apr 2022 08:42

I get so cross with the French business forums suggesting marking items as gifts and find myself pointing out they are committing fraud!

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