VAT on postal packages

Generall, imports into the EU are charged VAT, though EU VAT law requires Member States to exempt from VAT commercial consignments worth €10 or less. This is known as ‘low value consignment relief’ (LVCR). Member States may apply a higher threshold up to €22 and the UK has done this in the past. Provision is made for a higher limit to apply for personal gifts.

For VAT purposes the Channel Islands lie outside the EU. For some years there were concerns about the ability of some UK retailers to exploit LVCR by selling goods over the internet VAT-free from subsidiaries based in Jersey and Guernsey.

In November 2011 the UK Government announced that it would legislate to withdraw LVCR entirely from goods imported from the Channel Islands, with effect from 1 April 2012. In March 2012 a legal challenge to this selective withdrawal of LVCR, brought by the Governments of Jersey and Guernsey, failed, and the changes took effect from 1 April as planned.

United Kingdom: HM Treasury: Press Notice: No.122/11 (9.11.11): Government ends exploitation of Channel Islands VAT rules http://www.hm-treasury.gov.uk/press_122_11.htm

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