I am posting this up to offer some clarity as the subject often comes up. Charges are based on the item's value, including the postage cost. Items posted to UK as a "Gift" - Value stated as under £40 (currently approx $60) is free from charges. Value over £40 is charged both VAT and Import Duty. Items posted as "Goods/Merchandise" - Value over £15 (currently about $22) is charged VAT. Value over £135 (currently about $200) is also charged Import Duty. How much are the charges? VAT is a tax charged currently at 20% of the value. Import Duty is another tax, currently charged at 2.9%. A UK postal service will also charge a Handling Fee on top of the above charges, which differs depending on the company. Royal Mail charge around £8. Parcel Force currently take your eyes out at £13.50 DHL only charge a few £s. Example: I receive a parcel from the USA. The sender entered the value as $100 on the packing slip, and paid $27 postage. Therefore I get charged VAT on a value of $127 (which is a value of approx £84). VAT is 20% of the £84 value, therefore approx £16.50 VAT Parcel Force drill me for their £13.50 Meaning I pay a total of £30 - which is about $45. So there you go, as a simple guide. If anyone from UK has anything to add, if I've missed anything, just let me know.