Ross Clark

Globophobia | 18 December 2004

A weekly survey of world restrictions on freedom and free trade

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Gordon Brown does not usually receive support from this column but he deserves some congratulation on one initiative. He has written to the European Commission to request that it lifts the threshold above which duty becomes payable on goods brought into the EU for personal use. For the past 10 years it has been frozen at 170 euros (about £145).

While the EU has been keen to encourage cross-border shopping within the EU, it does everything it can to discourage us from shopping outside the EU. Should you buy a £200 fur coat in New York, you are liable to pay, on your arrival at Heathrow, VAT of 17.5 per cent plus additional duty of 12 per cent — in addition to any sales taxes you have paid in America. Should you omit to declare the goods and are caught by customs, you are liable to pay double. The UK has no discretion in duty rates; they are imposed by the European Commission.

The perversity of the rules, one suspects, is designed to catch people out. Most clothes, for example, attract duty of 12 per cent, but baseball caps for some bizarre reason attract 2.7 per cent duty. Bamboo furniture attracts duty of 5.6 per cent, but wooden furniture is duty-free. Herbal teas attract duty of 17.3 per cent — unless, that is, they are a blend of more than one herb, in which case they are duty-free. And so it goes on.

The Chancellor should have gone further and demanded that these absurd taxes on shopping be abolished altogether. The EU’s duty regime is a bizarre throwback to the days of credit controls, when holidaymakers had to count the pennies they were taking out of the country. There is little point in belonging to a free trade area if the EU then forces upon us petty rules and double taxation on goods brought into the EU from outside. Let us have our herbal teas and bamboo tables tax-free.