This is a small guide for people from outside the EU on how to complete customs forms for packages to the UK, and how to avoid landing your recipient with an excessive customs fee. Not applicable to packages sent from within the EU as there are no forms or fees (lucky you).

How UK customs works

Every package that comes in is scanned at the point of entry to ensure that there are no prohibited goods like live animals or nail varnish, and that there is no obvious discrepancy between the contents and what is declared on the customs form. If there is a suspicion of prohibited goods, or an obvious discrepancy (like the customs form says 'soft toys' and the xray shows lots of electronics), the package will be opened and inspected. If there are in fact prohibited items, they will be confiscated and destroyed, and the package may be returned to sender or may be sent on to the recipient less the prohibited items. If there's a major discrepancy between the declared contents and actual contents, the actual value will be assessed.

Note: If there's a discrepancy in the customs form itself, for example if it's marked as a gift but the sender's name is obviously commercial (like, say, Black Phoenix Trading Post) this will also be flagged up. The package will be assessed as goods rather than a gift, and if it happens more than once the sender will get a strongly worded letter and basically told not to do it again. This is why Puddin' cannot mark Trading Post goodies as gifts.

At this point, all packages that haven't been returned are assessed for taxable value. Unless there's a major discrepancy that's required re-valuation, which requires something big and obvious (like a laptop in a package that's labelled as books), this is done solely on the basis of the declared value on the customs form. What and how much tax is payable depends on whether the package is goods or a gift.

Goods

Import VAT is payable on goods valued over £15 (~US$23), and is 20% of the declared value plus the postage cost.

Customs Duty is also payable if the value is over £135.

Gifts

Import VAT is payable on gifts valued over £36 (~US$56), and is 20% of the declared value plus the postage cost.

Once Customs has calculated the tax, Royal Mail adds a processing charge of £8 ($12.50) and sends a horrible grey card to the recipient telling them they have to pay the total (which will be a minimum of £11/$17) either online or in person at their local delivery office, in order to get their parcel. There is no means of questioning or appealing the charge; you can't even see the parcel to find out what was on the customs form until you've paid. The options are pay the charge or refuse the package and return it to sender.

(As a side note, stuff that comes in by courier rather than normal post goes through the exact same process, but the processing charges from the courier companies are generally much higher.)

So! With this in mind, how should you best fill out the customs form?

Goods? Gift? Commercial samples?

Whatever you're comfortable with. Unless you put down a business name or are sending hundreds of packages to the UK per month, Customs are not going to check into a swap, sale, or decant circle package marked as a gift.

How should I declare the contents?

Be as accurate as possible, but generally go by what your local post office is happiest with. 'Perfume' is prohibited, but the kind of perfume they mean is the commercial alcohol/atomiser kind, which BPAL is not. 'Essential oils (non-flammable)' and 'Bath oils (non-flammable)' won't raise any eyebrows because they match the contents perfectly. 'Cosmetic samples' also come through fine if your post office lets you put that.

What value should I declare?

Whatever you're comfortable with! I refer you to the above notes on Import VAT thresholds for Goods and Gift packages. I certainly wouldn't want you to be dishonest, but Customs don't actually check unless there's an obvious mismatch between the declared value and the size/weight/declared contents.

Important note on Paypal and other automatically generated customs forms

If you use Paypal or some other service that automatically generates a customs form, make VERY SURE that the shipping cost is NOT included as part of the value of contents. Either it should be a separate line, or preferably not on the customs form at all. The reason for this is that Customs take the value of contents and the shipping cost (from the postage label or stamp) and calculate the tax based on both. If the shipping cost isn't separately itemised it gets included twice and the recipient pays extra tax.

Example:

Forumite X bought some decants from you and sent you $30 as a lump sum for $20 of decants and $10 of shipping, with a Goods and Services payment type for both of your protection. If you print a combined shipping and customs form direct from Paypal it will put the value of contents down as $30 and type as Goods, because that's all it knows. When Customs look at the package they will see $30 value and $10 shipping, and Forumite X will receive a lovely demand for £13.33 (nearly $20) in order to get the package.

If you separate out the shipping (via Paypal or, if necessary, doing it by hand) then Customs will see $20 value and $10 shipping/handling, and if you've marked the package as Goods Forumite X will only be charged on what they actually paid. And hey, if the package is marked as Gift, it's under the threshold and there will be no charge.