As more and more consumers are shopping online, HM Revenue & Customs (HMRC) has warned that shoppers purchasing products from overseas could face paying extra tax.

With shoppers forgetting that they might have to pay VAT and import duties on top of the asking price, eBay 'bargains' could turn into costly shopping disasters.

Phil Colclough, customs anti-smuggling manager, says, 'We don't want to put people off internet shopping, where there are undoubtedly bargains to be found. However, we do want to make sure than online shoppers are quite clear about the full costs involved, and that there are no unpleasant surprises when the postman knocks at the door.'

With the rise in internet shopping, customs officers have seen a dramatic increase in the number of packages on which import VAT and customs duty are due. They have received numerous complaints from members of the public who were unaware that they may be liable to pay import duty if the amount of duty is over £7 and VAT if the value of the goods is £18 or over.

These taxes apply whether you have purchased the items or received them as a gift; they are new or second-hand; or you are using them yourself or selling them.

Customs duty is not payable on goods bought from within the EU, but VAT may be payable in the country of purchase, or in the UK if the EU supplier is VAT registered.

In addition, special rules apply to goods such as tobacco, cigarettes and alcohol.

Duty-free allowances arriving from outside the EU do not apply to imports by post and commercial goods may have other conditions applied, including the need for a full C88 Customs Import Entry.

Moreover, even though the foreign sender may have filled in the customs declaration form, you are still considered to be the importer of the goods. Consequently, if the declaration is found to be misleading or untrue, you may be fined or imprisoned, or the goods themselves may even be forfeited.

If you are have any concerns about potential purchases, you can get advice from HMRC's National Advice Service on 0845 010 9000 or from its 'Guide for International Post Users' which can be found on its website at www.hmrc.gov.uk.

Law stated as at 1 February 2006