Model Monkey

Modern UK aircraft carrier fans! According to US vendor Squadron, Trumpeter will be releasing aircraft carrier HMS Queen Elizabeth in 1/350 scale (click here). The scale may be a typo. Trumpeter's catalog lists the kit in 1/700 scale. Either way, a very exciting subject with potential to please many Royal Navy fans.

Your models never cease to amaze and satisfy. Brilliant!

Very sorry to read about the loss of your beautiful cat. Pets are family and their loss hits hard. Your boats are sublime. World-class modeling.

Looks to be a match to one of "what-if" World of Warships video game ships. It would seem that Trumpeter is marketing to the large WoW crowd. Probably a good business move if not a historically plausible one.

Brilliant. Well-deserved award.

1968. I was 5 years old. Revell Martin B-57B. Bought it from a local gas station. Yes, in those days, you could buy a model from a gas station. I clearly remember the kit on the shelf and how excited I was when my parents said yes. They later bought me a bike from that gas station. Yep, you could buy bikes from gas stations, too. Here's the boxart: https://www.scalemates.com/kits/revell-h-132-100-martin-b-57b-intruder--936184

Hi Jeffrey, yes, the process is, as you aptly stated, "littered with land mines of false information". Information is changing and many HMRC websites are outdated, further confusing vendors trying to export. Even UK small businesses are stuck and confused as they try to export. See: https://www.theguardian.com/business/2021/jan/26/an-absolute-killer-small-uk-firms-struggle-with-brexit-vat-rules It would seem that I had a very different experience applying for a VAT number than you did, Jeffrey. When I applied for a VAT number using HMRC's automated VAT application website, I specifically identified myself as a small US-based vendor. During the process, I was explicitly asked for my EORI number which I had to provide before I could proceed with the next step in the application process. Without an EORI number, I was stuck. That's when I contacted HMRC personnel by telephone, asking for clarification. After a surprisingly short wait to reach an actual human, the staffer I spoke to told me that I didn't need a VAT number because I didn't "store goods in the UK before they were sold to UK customers". What he told me was consistent with this, possibly outdated, HMRC website: https://www.gov.uk/guidance/vat-overseas-businesses-using-an-online-marketplace-to-sell-goods-in-the-uk But he also cautioned me that this information "may change". He explained that the situation was developing and that details were not yet finalized, but that his understanding was that US vendors would not need a VAT or EORI number. If I wanted to obtain a VAT number, the VAT application website should let me proceed with the process without supplying an EORI number. Except that it didn't. What he told me was explicitly inconsistent with this HMRC official announcement and summary of changes: https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021 That HMRC website explicitly states: "For goods sent from overseas and sold directly to UK consumers without OMP involvement, the overseas seller will be required to register and account for the VAT to HMRC." So I spoke to another HMRC representative the next day. That second representative stated the first representative was partly correct in that the situation was indeed developing. But he said that the first representative was wrong about US vendors not needing a VAT number. He stated that US vendors absolutely needed a VAT number under the new rules in order for that vendor to import goods into the UK, even if the goods were not stored in the UK before being sold to a UK customer. When I explained that the application process required me to provide an EORI number and UK insurance code, he was unsure whether I would need them or not. He suggested that the website may be out of date but assured me that if so, it would be updated. He couldn't tell me how to get past the Catch-22 VAT/EORI problem with the application website. He further stated "we, ourselves, have not received detailed guidance", "websites were in the process of being updated", and "keep trying". It would seem that HMRC staff are as frustrated as the rest of us. Both reps I spoke to were very professional, courteous and apologetic over their inability to provide better help and more certain information. I continued to try to apply online, answering questions differently in hopes of finding the right combination of answers that would result in a successful VAT application submission but failed at every attempt. Very frustrated, I called HMRC again the next day and gratefully was able to speak to yet another human. I did make it, in your words, "abundantly clear that [I am] a small [US-based] business with a low turnover, selling low-value items directly to UK customers and that [we] do this by bog standard postal service, not by a shipping agent or forwarder etc. and that it's small parcels, not container loads of stuff". I described to all three representatives that I was trying to import scale models, HS Code 950320, valued at less than £135 GBP, one small 8 ounce box at a time, to individual UK customers one customer at a time, via the US postal service to Royal Mail with most shipments costing about £12 GBP in postage. The third rep advised me to hire an agent in the UK to handle the process for me. That's when I suspended selling to UK customers, temporarily I hope. I am not alone. Clearly, the truth is out there but it can't yet be found at HMRC. I'm sure at some point this will all get sorted out. I'll try the website again. Hopefully, some changes have been made and I'll either be told with certainty that no VAT number and/or EORI code is needed, or the process will result in a successful submission. The good news is that packages I shipped to UK customers after the new rules went into effect did in fact arrive, and relatively quickly.

Hi Jon and thanks for your patronage! The answer is both. UK customers are routinely reporting that HMRC/Border Force is not yet enforcing the new rules. Packages we shipped to customers in the UK before we were made aware of the new rules were delivered to UK customers, often with no VAT collection made. We are grateful that the packages were delivered despite our ignorance. At this point, we're just not sure how best to proceed. Presently, eBay is a workable, but flawed and expensive, option because there are still some risks associated with using eBay as a VAT collection agent. In addition to a higher product cost for the customer to cover eBay's fees, the most important unresolved eBay issue for us as the vendor is package marking, as you astutely pointed out with your own experience. How do we as a vendor mark the package reporting that eBay did collect VAT in a way that HMRC would accept thus satisfying HMRC requirements? Because that question has yet to be answered by eBay or anybody else, as of this writing we don't know how to mark the package and therefore cannot properly mark the package. The risk for the customer is that when HMRC begins enforcing the new requirements, without an acceptable marking HMRC has no ability to confirm the customer actually paid VAT to eBay. So, HMRC could require the customer to pay VAT again upon receipt before releasing the package to the UK customer. VAT package marking must be solved for eBay to work well. In addition to the risk that Border Force may at any time begin enforcing the new rules, seize a package and destroy it, or return it to us along with a stiff fine, we have to consider some very real legal risks associated with shipping to the UK under the new rules (and later to the EU). We have been advised that legal risks do exist for both us and the UK customer, however small. Although not likely to happen, there is a legal "worst case scenario" that we all ought to carefully consider. Border Force could, as we say on this side of the pond, "play hard ball" and declare that the VAT-less package sent to the UK constitutes an illegal import activity triggering criminal, legal action against us and the UK customer. The colloquial term for illegal import activity is "smuggling". As many UK customers know, Value Added Tax is governed by the Value Added Tax Act 1994, an act of Parliament (Westminster). Section 15 to Section 17 of this statute details the charge to the tax applicable in the case of ‘Imported Goods from Outside Member States’ (i.e., outside the UK after Brexit). Click the link below to see the severe penalties for UK customers found in violation of the Act, including incarceration and big fines. https://www.legislation.gov.uk/ukpga/1994/23/section/72 If Border Force reports the illegal import activity to US Federal law enforcement for investigation and prosecution on this side of the pond, we in the US are also subject to severe penalties. US Federal law enforcement authorities could also "play hard ball" and view the erroneous package markings (erroneous customs declaration label) and failure to collect VAT as an unlawful export activity. That offense is a serious crime here in the US, punishable by up to 5 years imprisonment, a $10,000 fine for each offense, and forfeiture of my business which is also our family's home (see 13 United States Code § 305 - unlawful export information activities). Link: https://www.law.cornell.edu/uscode/text/13/305#:~:text=Any person who knowingly fails,more than 5 years%2C or This means that the UK customer could face stiff penalties for unlawful import activities and we could face serious penalties for unlawful export activities. We have been advised that the risk for such legal action on either side of the pond is very, very low, yet that risk does exist and people do get prosecuted. Some vendors may choose to accept that risk. We prefer not to.

My apologies. We're very frustrated with the situation. We hugely value our UK customers and any disruption causes us great angst.

Getting parcels into the UK is not "business as usual" for overseas vendors. As has been said throughout this thread, previously, VAT was collected from the customer in the UK by UK officials, typically with the buyer having to pay VAT and a Royal Mail handling fee to Royal Mail in order to release the package from Customs. That was "business as usual". The new WTO rules push the VAT tax collection and reporting burden to the online retailer in the U.S. who is exporting the product to the UK. That is a new, big and costly burden for the non-UK vendor. Allow me to explain. Under the new rules, we, as a US vendor, are required to register for a VAT number and EORI code (Economic Operator Registration and Identification) from HM Revenue and Customs (HMRC) in order to deliver e-commerce orders into the UK. Sounds rather simple, but actually, it's a mess. EORI number application requires our UK VAT number, our UK national insurance number, our UK taxpayer reference and UK Government Gateway ID code. So we need a VAT number to apply for an EORI code but we need an EORI code to apply for a VAT number. Catch-22. We'll need the EORI code when we supply information to customs authorities, for example when completing customs declarations. We have been informed that an EORI number application requires: - our UK VAT number - our UK national insurance number (which we don't have because we don't have UK insurance) - our UK taxpayer reference (which we don't have because we are not a UK taxpayer) - UK Government Gateway ID code. See some big problems here? After receiving a VAT number and EORI code from HMRC, we will be required to collect all VAT fees from our UK buyers at checkout, presently set at 20% of the sales cost including the shipping cost (20% for HS Code 950320 "scale models"), then forward those taxes to HMRC quarterly. We would also be required to pay any transaction fees and currency conversion fees associated with the electronic transfer of collected VAT to the UK government. These are new business costs. Additionally, the new rules require us to make our company's financial records available to UK government inspection upon demand, in an accounting format consistent with UK accounting practices. Our business records are in a US accounting format to satisfy US taxation authorities' requirements. We are unfamiliar with UK accounting practices and terminology and it is unlikely that our records are consistent with UK accounting norms. We would have to quickly become familiar with UK accounting norms then evaluate our records to see if they will meet UK requirements. If our records are found not to be consistent, we would have to create and maintain two sets of records, one acceptable to our own US taxation authorities meeting their standards, and another set of records in a format that will satisfy HMRC requirements. HMRC recommends that we hire a UK-based tax attorney or representative to handle this for us. I'm sure UK attorneys are not free or inexpensive. This is a big, new administrative and financial burden, not at all "business as usual". Unfortunately, as a small vendor, we are not staffed or resourced to comply with these new administrative requirements and financial burdens. Because of the Catch-22 VAT and EORI requirements, we are not approved to collect VAT by HMRC because we can't satisfy the VAT/EORI application and collection requirements. Furthermore, although we can certainly send a package to customers in the UK as though we were conducting "business as usual", we don't know if Border Force will permit the package to enter the UK or what Border Force might do with it once it arrives. Depending on which HMRC official we ask, the package could be returned to us at our expense plus a fine levied against us for unlawful import activities, or the customer's models could be seized then destroyed by Border Force. Presently, customers are reporting that HMRC is not yet enforcing the new requirements and their packages are being delivered by Royal Mail as they had been in the past. We've been told that when HMRC/Border Force begins enforcing the requirements (without notice), the packages will not be delivered to UK customers since we, the US vendor, do not meet HMRC's collection and reporting requirements. The package will either be returned to us with fine or destroyed.

Great question. The US does not have VAT. US customers typically pay no import tax for models received from anywhere outside the US. The US Postal System collects nothing. Local town, city and/or state "sales tax" may apply for US customers purchasing products from another state within the US or from within their own state. State laws vary. But normally, for small businesses selling to a customer in another state, no sales tax is required to be collected due to established sales thresholds. For example, if vendor in state A sells and ships to a customer in state B, if the vendor does not sell above an established annual threshold to state B (typically $200k USD) or have a physical presence in state B, typically no sales tax is collected by the vendor and no sales tax is paid by the customer. However, if vendor in state A sells to a customer in the vendor's same state A, the vendor does collect sales tax which is then reported and passed on to the appropriate state agency, normally monthly. This means that small US vendors (and the US Postal Service) typically have no VAT collection processes or mechanisms in place because they never have been required to collect and report it. Until this month, when I as a US-based vendor shipped a product to a customer in the UK, I bought postage online, I typed in the cost of the model(s) and an HS customs code for scale models (950320) for the customs label, then printed the label all from my desk. The label was then fixed to the package and off it went to the UK, complete with tracking number. It was amazingly easy and fast. VAT was completely invisible to me, all handled by HMRC and Royal Mail based on the information on the customs label. Occasionally, a customer in the UK, stung by the cost of VAT and the Royal Mail handling fee, refused to pay those costs and rejected the package. Royal Mail returned the package to me in the US at no cost to me. The whole process was as painless as it could be for a US vendor.

Let's hope that as the situation continues to develop, the registration process will be made simpler. As of this writing, the HMRC registration process is a confusing, evolving mess, especially for a foreign business unfamiliar with UK accounting practices, terminology, and tax collection requirements. Certainly, IT firms will look at the present situation as an opportunity to bring to market an automated solution a vendor can adopt and implement as part of the checkout process on their website. Presently, we just don't have that. A UK customer sent this message to me today: "I spoke to uk customs and excise Just spoke to customs You’ll need to go to the Ungov [sic] website and look for ukgov EORI number site and register You’ll need to fill out a C88 form for customs The also said look on the border operations site He also said if you asked the uk purchaser to fill in a C88 form when they order" We small vendors need a much simpler process than that. Hopefully, IT vendors will view this mess as an opportunity to provide an automated solution we can implement as part of the checkout process on our website. The automated solution, ideally, would: 1. register the business with HMRC if not already done (and/or appropriate EU agency when that becomes required) 2. provide accurate information to the correct UK/EU customer at checkout 3. account for and collect the correct amount of VAT 4. produce the proper customs form(s) 5. report the precise amounts to HMRC/EU agency when required 6. transfer the correct amount at the correct time to HMRC/EU agency 7. pay any transaction and currency conversion fees in the correct amount to the correct entity 8. provide a detailed receipt to the vendor to satisfy their own country's taxation reporting requirements 9. integrate with other business tax preparation software (Turbotax, etc.) all done seamlessly, invisibly, painlessly. Am I hoping for too much?

With deep regret, we (Model Monkey) will no longer accept orders shipped to the United Kingdom due to new unsupportable VAT (value added tax) collection and reporting requirements. We are actively seeking a solution through automation. If an affordable solution can be found, we will resume selling to our valued UK friends "across the pond". Reports indicate that the entire EU will be adopting similar VAT collection and reporting requirements for each of its 28 member nations later this summer. We hope to have an automated solution in place before that happens. If we can't find an affordable automated solution that works, we will have to stop selling to the EU, too. We simply are not staffed to remain current with, and comply with, 29 individual countries' own taxation laws, taxation collection requirements, and revenue registration and reporting requirements in order to sell in those countries. We are very sorry for any disappointment and thank all of our valued UK customers for their patronage and understanding. Steve Larsen Owner, Model Monkey LLC

превосходный Brilliant!

Wow, just saw this thread. What a fantastic build. Just stunning. Please come back, Tim!