Ever wondered why couriers ask you to confirm the value of your goods when sending a parcel? As you may have guessed, it’s not just out of curiosity or interest.
Why is My Parcel Value Important?
- For claim and insurance purposes
- For customs clearance purposes
Now let’s look into each of these in more detail.
Is the Value of My Goods Important for Insurance Cover?
This is a simple one to explain. Common sense dictates that if you declare your goods as being worth £10 when booking your shipment online, then you cannot submit a claim for more than £10 if your parcel is lost or damaged in transit.
The same goes for additional insurance. If you take our additional insurance cover then the value that you take out cover for is automatically the highest value that you can claim compensation for during transit.
So if your goods are really worth £1,000 and you want them to be covered against loss, then you should take our insurance to match that value.
One final thing to remember when it comes to claims and insurance is that you will need to provide an invoice or receipt to prove ownership of the goods that you wish to claim compensation for, just like you would have to if you were submitting a house insurance claim. And of course, the value on the invoice or receipt should match the value that you declared when you booked your parcel online.
Does Value of Goods Affect Customs Clearance?
Before we go into detail, it’s important to understand that goods travelling within the EU are not subject to customs clearance; it’s only goods travelling to or from a non-EU country that must go through customs clearance before they can enter a country.
Import Duties, Taxes and Customs
When your parcel enters a Non-EU country, the local customs authority (which are part of the local government) will check that the contents of the goods are allowed for import into their country. Customs will also decide whether the receiver will have to submit any additional paperwork or pay import duty and/or tax before they can receive the goods.
Couriers cannot predict or calculate customs clearance charges in advance as they are only applied once the goods have arrived into the country of delivery. The charges are also solely decided and collected by Customs, not by your courier.
How do Import Duties and Taxes Work?
- When import duty and tax are applied it’s often because the goods are either for sale, re-sale or worth more than a certain value, although this can vary.
- The value thresholds for import duty and tax also varies from country to country, and some countries will apply import duty and taxes on all shipments, whilst other countries have specific value thresholds in place for when these charges should be applied, and if your goods are valued below this threshold then they can usually enter without any import duty and taxes being applied.
- To find out what the value threshold is for the country you are shipping to you need to look online on the country’s customs page. Whilst this can be difficult to navigate, often you will find what you are looking for within a reasonable time.
Remember that you cannot declare your goods as worth £0. You must always enter a value. Usually if import duty or tax is applied it is a percentage amount of the goods value that you declare when you book your parcel online. The percentage amount will vary from country to country and from commodity to commodity. The reason for export is important too. For example, gifts, personal affects and samples will in most cases attract a lower level of import duty and tax (if any), compared to goods that are for sale or re-sale.
Customs are part of the government, and declaring false information is essentially fraud. So whilst some of you may be thinking that it’s tempting to under declare the value of your goods, you should know that Customs do regular spot checks on parcels to check the contents and the value of the goods inside, and being caught lying could result in penalty fines, delays with delivery or even prosecution. And nobody wants that.