It was a Business-to-Business transaction (B2B) with taxes to be accounted for by the VAT-registered importer.

The item wasn’t a postal packet (a letter, parcel, packet, or other article transmissible by post), and the overseas supplier didn't collect the VAT at the point of sale.

The freight forwarder bulked the package with other small parcels using their BIRDS authorisation. As a result, the UK import VAT wasn’t accounted for.

When challenged as to why a full import declaration hadn’t been used, and VAT declared to HMRC, the forwarder replied that…

“We no longer make customs entries for the shipments valued under £135 GBP as per HMRC regulations as it is cleared using BIRDS (Bulk Import Reduced Data Set) process”. “We no longer make Customs entries for the shipments valued under £135 GBP as per HMRC regulations, as it is cleared using BIRDS (Bulk Import Reduced Data Set) process.”

The problem with this statement is that it is wrong, and if you look at the guidance on gov.uk (see below), the reason will become clear.

These goods were not eligible for BIRDS because the item wasn’t a postal packet, the overseas seller wasn’t registered for UK VAT with HMRC, and UK VAT wasn’t collected at the point of sale.

Because of this forwarder’s actions, my client will be found non-compliant for not accounting for VAT at import and may receive a civil penalty.

So, let’s be clear about BIRDS. Only the following can be declared to BIRDS and bulked at import:

• A postal packet (a letter, a parcel, a packet, or other article transmissible by post).
• Overseas supplier registered with HMRC for UK VAT and submitting VAT returns.
• VAT collected at the point of sale.

You can read about BIRDS on gov.uk here:

 Apply to import multiple low value parcels on one declaration

Selling goods using an online marketplace or direct to customers in the UK