OT: Customs duty, a cautionary tale

[JNugent]

Both systems are in operation.

Paying the VAT at the UK end is for items costing more than a certain amount (more than £100, less than £200).

[JNugent]

The item has to be more than £135 or so for that system to operate.

£10 extra on a £900+ item (when including VAT, duty (if any) and VAT), not so much.

[Fredxx]

I think you misunderstand the VAT situation.

In the good old days you would pay Czech VAT on this purchase of £700 of £147 as their VAT rate is 21%

If I'm not mistaken the UK VAT rate is 20%, so VAT of £140 would currently be payable on its import.

The Czech seller should already have come across instances where VAT is, or is not chargeable, depending on whether the UK buyer is VAT registered or not.

In short Brexit should have saved the OP £7.

If the bill was unexpected then that is down to ignorance. He would also be ignorant of the £7 saving he's made post-Brexit.

[Steve Walker]

But it is a net benefit to the UK, as the balance of trade with the EU is heavily biased to importing rather than exporting.

[GB]

In 2019, UK exports to the EU were £294 billion (43% of all UK exports). UK imports from the EU were £374 billion (52% of all UK imports).

So, the benefit is £16bn? Except that exports are down, as nobody can do the paperwork.

[nothanks]

It looks like I've exposed my ignorance. This is the first time I've imported since BREXIT and had assumed the demand was an import duty being charged on top of VAT, but the replies sent me scurrying off to look for more info. I am now (slightly) wiser and realise that I'd misunderstood and that the demand was for the VAT - the 20% rate should have been a hint. Ah well, nobody (not even accomplished DIYers) can be an expert on everything ;-)

[Chris Green]

It's down to the amount whether the sender charges UK VAT or not, nothing to do with where it came from.

For purchases valued up to (I think it is) £135 the seller has to collect the UK VAT and pass it on to HMRC. For purchases over this amount the seller doesn't charge VAT but it will be charged somehow when the item comes into the UK.

I.e. you now get charged 'tax' in addition to the advertised price when you buy things from AliExpress, previously it was very rare to be charged any VAT/Tax at all.

[Tim Streater]

Well yes. I bought some static RAM from the US about 10 years ago. And I paid charges of the nature you list above on top of the price listed on their website. I don't know why anyone would be surprised by this.

[Tim Streater]

Indeed, we just paid it in bulk instead. £350 million per second, or century, or something, wasn't it? Which included the markup to pay for all those other nations with their snouts in the EU trough.

[Clive Page]

Every time I drive through Luxembourg I fill up the car - petrol there is easily the cheapest in any of the European countries that I know of even in a motorway service station. A very easy one to find on the motorway a km or two before the Belgian border when heading west. We can usually get back to the UK on a full tank. It's a couple of years since we were last there but I'd be surprised if relative prices have changed that much.

[Paul]

When DHL does that shakedown here, the "handling" is more than the "duty".

You can't assume from the magnitude of the bill, that all that money goes to your government.

You can assign your own customs broker in place of the DHL one, by filling out some form. That's unlikely to be all that much cheaper (just another pirate trap, yarrh).

The best we can do here, is send items via the postal system, where the brokerage charge is more reasonable. Of course, most sellers absolutely refuse to use post, because where is the fun in not gouging consumers.

Paul

[Tim Streater]

Well the postal service is not much better. They wanted £8 for handling my static ram, IIRC.

[polygonum_on_google]

Absolutely correct.

Anything over £135 is treated as a business transaction and liable for duty (if applicable). Whereas below £135 it is treated as retail and ignored for duty.

EU is also moving to charge VAT at the rate due in the country to which goods are delivered. Not sure if they have yet done so.

[Andy Burns]

The EU was due to bring in their VAT reforms in January, but delayed it to July due to covid, the UK stuck with January due to brexit.

[The Natural Philosopher]

Perhaps I misremember it and it was in fact the other way around. It's been over 15 years...

[Brian Gaff (Sofa]

One might have expected that the seller would have added the tax to the bill as that is how vat etc is supposed to work. Brian

[polygonum_on_google]

If you sold or even made a present of one of your possessions to someone in another country, would you know what the proper procedures are for that country? And how would you charge VAT - if it were applicable?

The under-£135 rules that the vendor charges VAT at the destination country's rate - and remit that VAT to HMRC if sending to the UK, can only work smoothly if the vendor is registered in the destination country. Which is why so many will no longer send things to the UK. The cost and effort of registering and making sure your procedures are properly implemented is a significant overhead.

In general, big companies can do this. Shopping gateways like Etsy can do this. But one-man-or-woman-and-a-dog outfits really can't. Hence, if they did send something, it would be assessed and VAT charged as it goes through Customs. With the attendant extra costs.

[Andy Burns]

not any more, or at least not in all cases.

[nightjar]

Totally unrelated. Customs duty is a levy HM government makes on us for buying from abroad. While we were still in the Customs Union, the EU did not count as abroad for the purposes of duty.

[Dave Plowman (News]

I buy quite a bit from the US. From a mid sized company. They don't.