It’s estimated that people in the UK buy £40bn worth of items from abroad1, and the average UK return rate is around 28%2 . That means for anyone who has paid customs charges and returned an item to an

online shop abroad, it’s a lot of money to claim back from HMRC. 

We’ve seen that most international returns in the UK are made because they: 

  • Didn’t fit
  • Didn’t meet expectations
  • Are faulty or damaged

But not everyone who returns the goods asks for customs duty and import VAT refunds. 

It’s a little convoluted on HMRC’s part, but it begs the question of what happens to all of the unclaimed taxes from international returns.

HMRC doesn’t automatically return customs and import fees after the return of an item

There are some inconsistencies in how HMRC deals with different types of tax refunds. Some are automated, like PAYE income tax. And some are not, like customs fees returns. 

You’re probably very familiar with PAYE, which is how the majority of British residents pay their income tax.

It’s a straightforward system in which your employer or pension provider takes care of income tax and National Insurance payments before you get your money. 

HMRC checks every PAYE taxpayer’s position at the end of the tax year to check for over or underpayments.

What if the numbers don’t align? 

If the numbers don’t align, HMRC sends a P800 tax notice through the Government Gateway or by post.

If you underpay your taxes, HMRC deducts the difference through your pay for the following year. But, if you overpay, they will refund you automatically. 

The question is: ‘Why isn’t this automatic for reclaiming import taxes?’

Unclaimed import tax stays with HMRC

If you don’t claim your taxes back after you make an international return, the money stays with HMRC. 

Theoretically, they can keep the money indefinitely if you don’t claim it back in a certain amount of time. 

We can debate whether that is right or wrong, but this is how the system currently works. 

You have to ask for a customs charges refund – they will not voluntarily send you the money. 

We’ve made it our mission to inform as many people across the UK as possible and get your time and taxes back to you! 

How long do I have to claim back customs duty and import tax?

There’s a statute of limitations for when you can request a customs fees refund following a return. The sooner you initiate the claim, the better. 

You can ask for an import VAT and customs duty refund within: 

  • 90 days from the date the purchase entered the UK if you’ve returned an unwanted item
  • 365 days from the date the purchase entered the UK if you’ve returned something because it’s damaged or defective

With a few exceptions, you only pay customs charges for orders over £135, which means you can ask for a return only if your total order value exceeds that amount. 

If you ordered several items, you don’t have to return everything to get a customs duty and import VAT refund. You will receive money proportionately, depending on the returned item’s value. 

Claim HMRC customs tax money with Duty Refunds 

Reclaiming customs charges with Duty Refunds is simple — you can do it in 3 steps. 

You can get your money back with minimal effort on your side. 

Start a new claim in just five minutes and get your money back!

1 2021 E-commerce Payments Trends Report: UK Country Insights: Data provided by WPL via ONS, 2021

2 Dressipi “The Truth Behind Reduced Return Rates”, 2021 study. https://dressipi.com/blog/reduced-return-rates-a-bonus-for-fashion-retailers/