Jump to content

VAT nightmare incoming


Recommended Posts

10 minutes ago, Giorgio N said:

 

Did the sellers offer you a net price, with no local VAT charged ? They should do it, since you'd be paying VAT through Ebay to the Country of destination with this scheme.

As with most buys from outside the European Union a man mostly pays the local tax as well....in this case it was a private seller...

For now I won’t buy from the UK unless it falls under the import threshold we have which is 22 euro over here..

 

cheers, Jan

  • Like 1
Link to post
Share on other sites
On 1/2/2021 at 8:03 PM, Troy Smith said:

 

Also, looking at many listings on ebay, a lot of Chinese sounding sellers often have a UK address listed, so I'm not how that works for ebay,  does that then count as a UK sale, and not matter where the good are actually shipped from?

 

I'd also be very interested to know the answer to this one. I've used an ebay seller in the past who lists their item location as Poland but has a UK address in their business seller info.

 

Also looked at a few other items in my watch list, a Hong Kong based stockist of Akan paints (which AFAIK are not stocked by any UK seller/store) now says they don't deliver to the UK at all. 

Link to post
Share on other sites
22 minutes ago, FalkeEins said:

'EU firms refuse to ship to the UK' report on the BBC 

https://www.bbc.co.uk/news/business-55530721

 

Hopefully the cycling lobby is big enough that people in power will notice and do something to ease this.  

 

Unfortunately I think the approach of many (like in the comments of that article) will be 'just buy British' - which is a lovely idea, but completely ignores concepts of economies of scale and the reality of small niche markets where production is often by dedicated hobbyists.

Edited by Tim R-T-C
  • Like 2
Link to post
Share on other sites

I've heard back from my leather supplier in England.

A parcel which previously cost me £13.50 plus VAT is now going to cost, at best, £75 plus duties

It may be cheaper for me to collect the leather myself!

  • Confused 1
Link to post
Share on other sites
40 minutes ago, FalkeEins said:

'EU firms refuse to ship to the UK' report on the BBC 

https://www.bbc.co.uk/news/business-55530721

for ease of reference, from the link 

"

The moves follow changes in VAT rules brought in by HM Revenue and Customs on 1 January.

VAT is now being collected at the point of sale rather than at the point of importation, a change that HMRC says will ensure that goods from EU and non-EU countries are treated in the same way.

This essentially means that overseas retailers sending goods to the UK are expected to register for UK VAT and account for it to HMRC if the sale value is less than €150 (£135).

Adam French, Which? consumer rights expert, said consumers would be "frustrated" if the new VAT rules were applied in a way that causes significant inconvenience.

"It's vital the government makes it clear to consumers as well as traders what the changes as a result of Brexit mean for them and how they shop. It should also work to ensure UK consumers can retain access to a wide range of competitively priced and quality goods."

Campaigner Richard Allen, founder of Retailers Against VAT Abuse Schemes, told the BBC that the massive increase in international online shopping had led to VAT evasion on a huge scale.

He said the new HMRC rules were aimed at tackling that, but it was unclear how firms who failed to register for UK VAT would be dealt with.

"Why should a phonograph spares manufacturer in Idaho bother to register for VAT in the UK and how are you going to make them do it?" he said. "And if they send the package anyway, what are you going to do?"

 

My emphasis added.   

 

 

 

31 minutes ago, Tim R-T-C said:

 

Unfortunately I think the approach of many (like in the comments of that article) will be 'just buy British' - which is a lovely idea, but completely ignores concepts of economies of scale and the reality of small niche markets where production is often by dedicated hobbyists.

One approach for those of us in hobbyist communities in general, would be to club together to make a larger order.   I know, 'herding cats' an all that,  but would spread the new costs out.   it was something I never really got in the Wingnut Wings days while modellers didn't put in one large order,  as the VAT remains the same, but would make for one set of import handling charges.

 

Another way, again about connected hobbyists,  here we have a large international membership,  in that case develop penpals, and swap items,  which then are gifts.  (and note, tax will have been paid on said gifts already)

Makes more sense as well as a lot/most of us no longer have a local shop,  I get most things mail order, so adding an item into an order may not cost the purchaser extra postage.  

 

In my days as fanatical record collector , to get rare foreign records I used to swap with other collectors, with added bonus of swapping information,  I used to trade tapes and find out about related bands that I didn't know about.   This was years ago, when there was less info up on the the web, so  it was an amazing resource for me, and before anyone asks, I had very few bad experiences, it was a close knit network of collectors,  bad traders quickly became known.

 

Takes a bit of planning, and is work,  and isn't always practical, and over a certain threshold gifts are subject to VAT, but since the main issue here seems to be fairly small, relatively low value specialist items, it's not impractical.   

 


 

  • Like 1
Link to post
Share on other sites
1 hour ago, FalkeEins said:

'EU firms find its no longer economically viable or makes good business sense to ship to the UK' 

Fixed that for you..... and the BBC...

  • Like 1
Link to post
Share on other sites
14 minutes ago, Troy Smith said:

.   One approach for those of us in hobbyist communities in general, would be to club together to make a larger order.   I know, 'herding cats' an all that,  but would spread the new costs out.   it was something I never really got in the Wingnut Wings days while modellers didn't put in one large order,  as the VAT remains the same, but would make for one set of import handling charges.
 

 

To be honest the handling fee isn't the biggest concern for me - international postage costs enough anyway! But not having access to niche parts at all because the red tape deters sellers will be very annoying.

 

What happens to orders over £135, are they just treated as they used to be?

  • Like 1
Link to post
Share on other sites
26 minutes ago, Troy Smith said:

One approach for those of us in hobbyist communities in general, would be to club together to make a larger order.   I know, 'herding cats' an all that,  but would spread the new costs out.   it was something I never really got in the Wingnut Wings days while modellers didn't put in one large order,  as the VAT remains the same, but would make for one set of import handling charges.

 

A good idea in principle but a massive PITA to organise.

 

Hopefully for products where there is clearly a demand in the UK, a retailer here will look into setting up an import and distribution deal, previously these often weren't worth the effort from a commercial perspective as it was so easy to buy items from overseas sellers. The Akan paints I mentioned in my previous post are a perfect example, someone in the UK did try stocking them a few years ago but the prices were no better than buying from overseas sellers so the venture failed. The same now would likely be more successful. 

Edited by -Ian-
Link to post
Share on other sites
1 hour ago, Tim R-T-C said:

What happens to orders over £135, are they just treated as they used to be?

My understanding on this is that then it gets hit by customs and excise. On top of the VAT issue. I may be wrong though....

 

Its here, I've read it 3 times now and I still can't be sure..

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

 

In other news,  

On the flip side, I've yet to find a UK retailer on ebay (or elsewhere, but tbf I haven't looked far) who is quoting price less VAT for overseas sales to ROI. So basically I'd be paying VAT twice...

Edited by roym
Added link to UK gov site
Link to post
Share on other sites
3 hours ago, Tim R-T-C said:

 

 

 

What happens to orders over £135, are they just treated as they used to be?

My understanding (which could be wrong or out of date of course as things are changing daily at the moment) is that over £135 in value the VAT etc if due is collected on arrival in the UK in the manner it was previously i.e. Parcelforce send you a note with what's due plus their handling fee.

 

Duncan B

Link to post
Share on other sites

Sounds like a monumental stuff-up that only we (or India) could orchestrate.

Much easier to make mandatory an accurate Customs declaration in the exporting country. If goods arrive without, then it gets examined. All charges raised at point of entry, like everything else. If the exporter mis-declares goods (assuming he uses a third party like Amazon, ebay or Ali Express) the importer provides evidence of out of pocket expenses, and is awarded a refund from the exporter via paypal, or whomever. The exporters will then learn to comply if it hits them in the wallet.

Link to post
Share on other sites

The usual idiotic comments on the BBC article, I see.   Brexit might have brought this about sooner for us, but it's coming for the rest of the EU in June anyway (IIRC), so we would have had this situation regardless for non-EU imports.   My business sells worldwide, though mainly to the US and Japan.   If the EU expects me to start collecting their taxes from this summer, I'll have to adopt the same policy as some of my suppliers:  no more low value orders.

  • Like 1
Link to post
Share on other sites

Well just suffered the first casualty of the situation. My wife unfortunately without telling me ordered one of those fitness watches from the Watch Shop in the UK. If asked I would have advised holding off or going local here in Ireland or EU. Now she's been hit with a hefty import duty bill. It hasn't arrived yet but she may also have paid UK VAT. Plus no doubt another fee from DHL. Ouch! 

 

 

Link to post
Share on other sites
On 10/17/2020 at 8:22 PM, VMA131Marine said:

Everything that comes into the UK goes through customs so it’s easy to stop a package on which VAT has not been paid. I’d guess that the UK will tell overseas shipping companies and postal services that they will be liable for the VAT (+penalties most likely) for any package they try to import into the UK which does come with proof of appropriate VAT payment.

When I have sent packages abroard, the PO always checks value and whether a declaration is required and made. I would expect that to be the same for any shipping company when the receive it, especially as they will quite often pass through multiple companies. 

Link to post
Share on other sites
17 minutes ago, noelh said:

Well just suffered the first casualty of the situation. My wife unfortunately without telling me ordered one of those fitness watches from the Watch Shop in the UK. If asked I would have advised holding off or going local here in Ireland or EU. Now she's been hit with a hefty import duty bill. It hasn't arrived yet but she may also have paid UK VAT. Plus no doubt another fee from DHL. Ouch! 

 

 

Ouch, you should be able to claim the VAT back though shouldn't you (Either Irish or UK as you should only be paying one or the other)?

 

Duncan B

  • Thanks 1
Link to post
Share on other sites
13 hours ago, bentwaters81tfw said:

 

Much easier to make mandatory an accurate Customs declaration in the exporting country. If goods arrive without, then it gets examined. All charges raised at point of entry, like everything else. If the exporter mis-declares goods 

I have had similar problems ordering stuff from Hong Kong where they understate the actual value of the goods on the declaration form on the parcel, and has implications of you need to make a compensation claim after it been delivered.

Link to post
Share on other sites
1 hour ago, Duncan B said:

Ouch, you should be able to claim the VAT back though shouldn't you (Either Irish or UK as you should only be paying one or the other)?

 

Duncan B

I think so. Haven't checked the paperwork yet. So not sure if VAT was applied in the UK. But it was applied on this side. 

It's a nightmare to be paying VAT twice. 

Link to post
Share on other sites
12 hours ago, Six97s said:

The usual idiotic comments on the BBC article, I see.   Brexit might have brought this about sooner for us, but it's coming for the rest of the EU in June anyway (IIRC), so we would have had this situation regardless for non-EU imports.   My business sells worldwide, though mainly to the US and Japan.   If the EU expects me to start collecting their taxes from this summer, I'll have to adopt the same policy as some of my suppliers:  no more low value orders.

While I agree that the comments on the BBC article are pretty idiotic, the main effect of Brexit has been to take the UK out of the single market/customs union meaning that small sellers in Germany, France, Czech Republic etc etc are now expected to collect taxes on behalf of the UK government instead of simply selling to a buyer in another part of the same trading bloc.

Link to post
Share on other sites

I think I read somewhere that this is being rolled out across Europe, if not further afield from June/July, so everyone will either have to comply or stop selling.

  • Like 1
Link to post
Share on other sites

Which would be no problem, were we in a free trade area...  Oops.   However if I was to buy something from the USA, I would have to pay the appropriate state taxes so this will make no difference to the buyer.  Problems of double-taxing will only occur whilst the system shakes itself down.  All it needs is a bit of patience.  Not noticeably common, nowadays.

Link to post
Share on other sites

If only life was so easy . VAT . import duty  ,they are like water of a ducks back to me . I run a small nursery business that specialises in Carnicrrous plants such as Venus Flytraps , Pitcher plants and sundews . Before Jan 1st to sell Venusflytrap to European Union  £6 .00 plus post and packing .

 

Now £6.00 for plant

 

£ 145.00 phytosanitry certificate (plant health )

 

£ 75.00 CITES certificate as VFT is appendix B protected

 

So now plant that cost 6.00 will cost £225 .00 plus post and packing

 

cant see my EU sales existing for small orders anymore  😞

  • Sad 3
Link to post
Share on other sites
2 hours ago, Skodadriver said:

While I agree that the comments on the BBC article are pretty idiotic, the main effect of Brexit has been to take the UK out of the single market/customs union meaning that small sellers in Germany, France, Czech Republic etc etc are now expected to collect taxes on behalf of the UK government instead of simply selling to a buyer in another part of the same trading bloc.

 

As are sellers in the US, Japan and all other non-EU countries.   They (and we) will also be required to register and collect VAT on behalf of EU countries from July.   AFAIK, VAT rates differ across the EU, so that must mean registering with multiple countries?

  • Like 1
Link to post
Share on other sites
18 hours ago, Graham Boak said:

 Problems of double-taxing will only occur whilst the system shakes itself down.  All it needs is a bit of patience.  Not noticeably common, nowadays.

 

If you're just a private individual buying items online I agree, however if you are trying to keep your head above water running a small business then it's not just about having some patience as the Bank Manager and Suppliers won't take patience in lieu of payments. This is causing many small businesses serious problems and sleepless nights. That in turn will trickle down to the private individuals as they soon discover that the resin set they really wanted is no longer available to them.

 

17 hours ago, Mottlemaster said:

If only life was so easy . VAT . import duty  ,they are like water of a ducks back to me . I run a small nursery business that specialises in Carnicrrous plants such as Venus Flytraps , Pitcher plants and sundews . Before Jan 1st to sell Venusflytrap to European Union  £6 .00 plus post and packing .

 

Now £6.00 for plant

 

£ 145.00 phytosanitry certificate (plant health )

 

£ 75.00 CITES certificate as VFT is appendix B protected

 

So now plant that cost 6.00 will cost £225 .00 plus post and packing

 

cant see my EU sales existing for small orders anymore  😞

 

I feel your pain, I don't suppose Graham's suggestion about having some patience is much comfort to you? (sorry Graham but your comment was a bit short sighted)

 

17 hours ago, Six97s said:

 

As are sellers in the US, Japan and all other non-EU countries.   They (and we) will also be required to register and collect VAT on behalf of EU countries from July.   AFAIK, VAT rates differ across the EU, so that must mean registering with multiple countries?

 

Yes it will mean being registered in every Country you sell into and then keeping a set of Accounts for every Country (my Accountant is already rubbing her hands in delight), the paperwork and costs are going to spiral which for a small Business will mean a tough choice between continuing to sell to each Country or to drop the less profitable markets. 

 

Duncan B

  • Like 1
Link to post
Share on other sites
19 minutes ago, Duncan B said:

 

If you're just a private individual buying items online I agree, however if you are trying to keep your head above water running a small business then it's not just about having some patience as the Bank Manager and Suppliers won't take patience in lieu of payments. This is causing many small businesses serious problems and sleepless nights. 


Indeed Duncan. 
 

I suspect more individuals are are running their own small self employed businesses these days but the great majority will be employees and not had this experience 

 

I do and thankfully I don’t supply services outside the UK. I do however know the mountain of paperwork and regulations I must comply with already (mostly box ticking and showing the paperwork is in order but to no great purpose or effect) only too well. 
 

God knows what misery this will bring short medium and long term to small businesses given the global markets we live in. It could well be the final straw for many who will close down. What folks need understand is that by itself it’s manageable but arrives on top of the existing mountain of paperwork.  For many it means more man hours working but not earning a cent. 
 

 

  • Like 2
Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...