We've all done it - walked through the Green Channel at Customs with our holiday purchases packed away. But how much are we allowed to buy? Simon Calder finds out

No exceptions, no excuses: even if you regard the limit on importing goods free of duty as absurdly low, Customs and Excise says the law is absolutely clear: if you spend more than £145 on purchases outside the European Union, and bring them back to Britain, you must pay duty and VAT.

Coleen McLoughlin, the girlfriend of the Manchester United and England footballer Wayne Rooney, pleaded ignorance when she was stopped at Manchester after a flight from New York on Tuesday. Ms McLoughlin had reportedly walked through the Green Channel with £10,000 worth of purchases, when she was stopped by Customs officers, who demanded £3,000 in duty and tax.

You need not be a traveller with the experience and stature of Michael Palin to have worked out that the price of almost anything is likely to be lower outside the UK (interestingly, the one bargain that we get is the cost of travel). Numerous readers have contacted The Independent Traveller to ask about the exact legal position. Here, the most common questions are answered.

I'M TRAVELLING WITHIN THE EUROPEAN UNION. NO LIMITS?

Almost. British visitors to the 24 other EU countries are allowed to bring back, as gifts or for personal use, anything they wish - with a few exceptions. Items that are considered dangerous or indecent are not allowed; neither are counterfeit goods, nor anything made from an endangered species. Travellers bringing back large quantities of cut-price tobacco and/or alcohol may have to convince Customs officials that the drinks and cigarettes are not for sale; anything above 3,200 cigarettes, 110 litres of beer or 90 litres of wine isconsidered suspicious.

In addition, several territories are considered to be outside the EU, even though the map might suggest otherwise. The Channel Islands, Gibraltar and the Canary Islands are all beyond Europe for tax purposes; the popular skiing destination of Andorra, between France and Spain, might look firmly within the EU, but is considered by Customs officials to be as non-European as Afghanistan, as is the Turkish-occupied portion of Cyprus.

Smokers hoping to bring back plenty of cheap cigarettes from Eastern Europe will be disappointed to learn that the 200-cigarette limit applies to all eight of the former Communist nations that joined the EU in May: Estonia, Latvia, Lithuania, Poland, Hungary, the Czech Republic, Slovakia and Slovenia.

WHAT ARE THE LIMITS FROM OUTSIDE THE EU?

One litre of spirits, two litres of wine, 200 cigarettes - and, as Ms McLoughlin discovered to her cost, £145 of other goods.

I'M FLYING BACK FROM DUBAI VIA AMSTERDAM, AN EU AIRPORT. CAN I BRING BACK WHAT I LIKE?

No. The crucial question is: where did you buy the stuff? If the answer is beyond Europe, then duty and tax is payable. Should flight times and luggage arrangements permit, you could clear Customs at Amsterdam. But you would be liable to the same limits, which apply across Europe. And Customs officials back in Britain will want to be satisfied that you have paid their Dutch counterparts.

I'M GOING SKIING IN FRANCE, BUT FLYING VIA SWITZERLAND

You can bring back drink, tobacco or other goods bought in France without a problem (though Swiss Customs officials at the land frontier might check what you're bringing through). You can even amplify your purchases in the airport shop with duty-free spending up to the limit of one litre of spirits/200 cigarettes/£145 of other stuff. Note, though, that the burden of proof about where you bought it rests with you: keep the French receipt.

IF I EXCEED THE £145 LIMIT, HOW MUCH MUST I PAY?

Simple question, tricky answer. The rules on the amount of duty are extraordinarily complex and apparently arbitrary. Buy a handbag, for example, and you pay eight per cent if its outer surface is leather - but nearly twice as much if it's plastic. Finding out your liability in advance is tricky. First, you call the Tariff Classification Service in Southend on 01702 366077 and tell them what you're planning to buy. They will give you a 10-digit code. You then have to phone the Customs National Advice Service on 08450 109000. When you quote the commodity code, they will tell you the level of duty. (No, I don't understand either why you can't make a single call or look on the internet.) You are liable for VAT at 17.5 per cent on top. Generally, reckon on having to pay anything from a quarter to a third of the value.

HOW WILL THEY KNOW HOW MUCH I'VE SPENT?

Usually, by asking - or looking at the receipts in your purse or wallet. If they have reason to believe you are fibbing, they may apply what they consider to be a fair market value to the goods you are bringing in.

I'VE BOUGHT A £200 COAT, SO I JUST PAY DUTY ON THE EXCESS, RIGHT?

Wrong. Duty (and VAT) is levied in full on any item costing more than £145. And no, couples can't pool their allowances.

I'VE ALREADY PAID SALES TAX IN NEW YORK

Irrelevant. If it's not duty- and tax-paid in an EU country, UK Customs want to know about it.

A FRIEND/COLLEAGUE/LOVER GAVE ME THIS EXPENSIVE WATCH. HONEST

That's irrelevant. Even if you have no clue how much it cost, the Customs officials will have a pretty shrewd idea and will levy duty and VAT on the item accordingly.

BUT I'VE WORN THE CLOTHES/USED THE iPOD/WATCHED THE DVD

Irrelevant. The rule of thumb is that anything bought within the past six months counts as new.

IT'S NOT FOR ME, IT'S A CHRISTMAS GIFT FOR MY DEAR OLD GRAN

Irrelevant. If you're bringing something of value into Britain, Her Majesty's Customs and Excise wants to know about it.

I ALWAYS WALK THROUGH THE GREEN CHANNEL UNCHALLENGED

Then you've probably not come through Heathrow Terminal Three at dawn, when Customs and Excise often stages an operation rather like a SWAT team; dozens of officers are on duty targetting arrivals from shopping hot spots like the US, Dubai, Singapore and Hong Kong. Those with designer carrier bags are prime targets. Anyone who chooses the Green Channel is in effect declaring that they have nothing to declare. In theory, offenders could be fined and have the goods confiscated. In practice, they usually settle for collecting the cash owed (payable by credit card, if you wish).

MY NEIGHBOUR SAYS SHE CUTS THE LABELS OFF HER NEW STUFF AND THROWS AWAY THE RECEIPTS BEFORE SHE GETS TO CUSTOMS

She's not alone. But she underestimates the resources of Customs and Excise at her peril. Officers have years of experience of petty smugglers, and know all the tricks of the trade - they can often tell where a particular item is likely to have been bought just by looking at it. They also have a wide range of powers, and can - for example - run a check on your recent credit-card purchases.

WHY DOESN'T GORDON BROWN SIMPLY RAISE THE LIMIT?

He can't; it is a Europe-wide ruling, and it will require action from Brussels to bring about any change. The £145 limit has been in force since1995; before that it was a miserly £32. During that time, the amount of travel beyond the borders of the EU has increased sharply as air fares have fallen.

BUT I DON'T THINK I'M CAPABLE OF SPENDING LESS THAN £145

Then see the guide on page three for some retail adventures that won't bust your duty-free limit.

FROM RUSSIA, WITH CHANGE

Britain's record companies are currently cracking down on the illegal online sharing of music. Anyone travelling to Russia, however, can fill their suitcases with dozens of legal CDs, and still keep within the Customs and Excise import limit of £145.

Back in the USSR, vinyl was absurdly cheap; and even today, the average Russian music lover has precious little disposable income, so the record companies sell chart CDs at a fraction of prices prevailing in Britain.

On a recent trip I re-stocked my record collection at no more than £2 per album; also on sale, at a similar price, are illegal compilations of some artists' complete works, but you are not allowed to import these into the country.

Strangely, Russia is also the best place to buy money: specifically euros and US dollars. The "spread" between buying and selling rates of foreign currencies is so slim that you can get a better deal than at your local High Street bureau de change by changing sterling first into roubles and then into European or American currency.

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