For those of you living in the United Kingdom please note that the operation of the customs department within the Royal Mail and the interface with Jersey Post has changed.
In the latter half of 2011 during the argument against LVCR (low value consignment relief) it seems that UK Customs and Excise together with the Royal Mail decided to put maximum effort in to processing parcels and packets arriving from the Channel Islands. LVCR had set a de-minimis value of around £18 (the value at which it had been decided that it was not worth the effort of processing VAT collection) and even before the formal loss of the LCVR argument many more consignments were being subject to arbitary delays and nuisance tactics such as not attempting to deliver and instead leaving a card expecting the recipient to collect from a regional sorting office. Whether it was "suggested" by Royal Mail/Customs or Jersey Post I would not know but in 2012 Jersey Post has started to act as a VAT collection agent.
The situation with higher value letters packets and parcels seems to be as follows:
When a packet or parcel is sent to the UK any VAT due may optionally be pre-paid.
If it is pre-paid it is at the standard rate (20% for model railway items), the package receives a "VAT paid" sticker and the package should then be delivered without undue delay and without any further charges.
If it is not pre-paid then UK customs may (treat as very likely) raise an import duty (VAT) charge on it and add an extra £8 "processing fee" on top of that.
Initially the additional fee seemed to be a speciality of Parcelforce whilst Royal Mail letter packets looked as if they might escape the processing fee, however during 2014 it would appear that anything of reasonable value sent insured using "Special Delivery" (the old Registered service) will most likely suffer the fee if not pre-paid and I now assume that the "collection fee" is here to stay. If VAT is not pre-paid and the letter or parcel delivery service hands you the packet without raising a charge then it means that VAT is not being charged in that instance (lucky you).
I have decided to continue to show my pricing without adding the VAT because my more local customers and those in countries other than the UK get no benefit from having to adjust the prices back down before possibly adding their particular import duty rates back on.
If you are a customer that falls within the UK VAT net please be aware of the option of pre-paying the VAT. If you want to pre-pay then please get in touch before paying, once an item has gone over the counter it is on it's way and if the VAT has not been pre-paid and you subsequently get hit with a "processing fee" in addition to VAT there is not much that I can do about it.