Import tax/VAT from europe.

[Phil McCavity]

Posted by Martin Harris - Moderator on 26/01/2021 14:36:01:

I'm not sure that this thread isn't straying a little too far into the territory of political discussion. Could we try to relate it to the impact on model flying and how we can best proceed when purchasing or sending items to EU countries?

Quite agree. I'm out of any political discussion from here on.

 

Edited By Phil McCavity on 26/01/2021 14:46:08

[Nigel R]

"Once again: We never proposed these changes, the EU committee did. If you really feel the need to vent your spleen at anybody they should be your target not the government nor the voter. That's the point you need to accept to "Get it"."

I'm not venting my spleen, that's your interpretation.

The EU did not propose to cut off free trade and introduce tariffs, none of this between UK and EU was inevitable.

If you cannot see the advantages to free trade within the wider EU area, then I can see little point continuing this discussion.

[Phil McCavity]

Posted by Nigel R on 26/01/2021 14:55:43:

"Once again: We never proposed these changes, the EU committee did. If you really feel the need to vent your spleen at anybody they should be your target not the government nor the voter. That's the point you need to accept to "Get it"."

I'm not venting my spleen, that's your interpretation.

The EU did not propose to cut off free trade and introduce tariffs, none of this between UK and EU was inevitable.

If you cannot see the advantages to free trade within the wider EU area, then I can see little point continuing this discussion.

That's fine by me. I'm out anyway inline with the moderator request.

[john stones 1 - Moderator]

As a forum member, not a moderator, let it go fellas only ends up with the thread locked. keeping people updated re shopping changes is useful, stick to that eh.

[Phil McCavity]

Posted by john stones 1 Moderator on 26/01/2021 15:07:04:

As a forum member, not a moderator, let it go fellas only ends up with the thread locked. keeping people updated re shopping changes is useful, stick to that eh.

Once again, agreed.

[kc]

The trouble is this could create fake news. If the thread is locked nobody can post a correction to the fake news! Democracy depends on free speech.......

[Roger Jones 3]

"Relate it to the  impact on model flying"

ALL additional costs on  ANYTHING  has an impact on model flying.

Edited By Roger Jones 3 on 27/01/2021 07:02:54

Edited By Roger Jones 3 on 27/01/2021 07:07:36

[Jon H]

The EU debate is so polarising its very hard to keep the politics out but i will give it a go.

As a man on the 'outside' and 'inside' i can post my experiences so far with facts only, no politics, and just a little conjecture.

Bought a guitar from Germany. Would have cost me £345 delivered before we left, has ended up costing me £372 due to UPS charging me for the privilege of letting me pay the VAT i would have paid for free before. Thanks for that. So, the upshot is i will resist buying things from Europe as its just not cost effective to do so. This is bad for me as it limits the range of products i have access to (what i wanted is not available in the UK), bad for the Germans as i wont buy any guitars from them, and does little to help UK shops as i wanted 'that one' and the UK alternatives available didnt do it for me so i was not going to buy one from them anyway.

For modellers, If we consider that brands like Hacker, Jeti, Multiplex etc come from over the water we are likely to see price rises on all european brands due to these import charges. With prices already high on some products and margins tight for shops, this too is not good for them.


At Laser, our enquiries from Europe have dried up over night. In conversation with other companies in the UK modelling world they have seen a similar drop off in interest from the folks over the channel. Contrary to some of the comments here, this is not good for UK retailers/manufacturers and Laser sales break down into about 40% UK, 35% EU (inc scandinavia) and the rest was everyone else. Loosing such a chunk of the market is really not good.

 

My only 'political' statement would be that the govt needs to do something to prevent the shipping companies charging everyone 20-30 quid just for the admin connected to paying the VAT. It really cannot cost 30 quid to fill in a form and i think the shipping companies are just exploiting the situation to their own advantage. 

Edited By Jon - Laser Engines on 27/01/2021 09:05:37

[Roger Jones 3]

Posted by Jon - Laser Engines on 27/01/2021 09:01:25:

The EU debate is so polarising its very hard to keep the politics out but i will give it a go.

As a man on the 'outside' and 'inside' i can post my experiences so far with facts only, no politics, and just a little conjecture.

Bought a guitar from Germany. Would have cost me £345 delivered before we left, has ended up costing me £372 due to UPS charging me for the privilege of letting me pay the VAT i would have paid for free before. Thanks for that. So, the upshot is i will resist buying things from Europe as its just not cost effective to do so. This is bad for me as it limits the range of products i have access to (what i wanted is not available in the UK), bad for the Germans as i wont buy any guitars from them, and does little to help UK shops as i wanted 'that one' and the UK alternatives available didnt do it for me so i was not going to buy one from them anyway.

For modellers, If we consider that brands like Hacker, Jeti, Multiplex etc come from over the water we are likely to see price rises on all european brands due to these import charges. With prices already high on some products and margins tight for shops, this too is not good for them.


At Laser, our enquiries from Europe have dried up over night. In conversation with other companies in the UK modelling world they have seen a similar drop off in interest from the folks over the channel. Contrary to some of the comments here, this is not good for UK retailers/manufacturers and Laser sales break down into about 40% UK, 35% EU (inc scandinavia) and the rest was everyone else. Loosing such a chunk of the market is really not good.

My only 'political' statement would be that the govt needs to do something to prevent the shipping companies charging everyone 20-30 quid just for the admin connected to paying the VAT. It really cannot cost 30 quid to fill in a form and i think the shipping companies are just exploiting the situation to their own advantage.

Edited By Jon - Laser Engines on 27/01/2021 09:05:37

Jon,

As you imply it's mostly a rip-off by the delivery companies. I do a lot of fly fishing and the best fly fishing rods are made in the USA, But there are few UK distributors so you have to order direct if you want any other than the most common US makes.

This has never been a problem or involved extra delivery costs. So it shouldn't be a problem from the EU now. The delivery companies are making it up.

The wider problem with model stuff is that the UK model plane hobby customer base is just not large enough to sustain our own industry and may well not be large enough for EU companies and EU-based distribution outfits who supply 'Asian' products to bother with.

I mostly fly glow but also build EDF planes using mainly Hacker motors and Wemo, Jetfan, or Schubeler fan units. Delivery was near instant but though I'm not 'price limited' I won't be ripped off so I'm now holding off until things settle down, if ever they do.

Ripmax claims to be the overall EU distributor for Futaba. I wonder what will happen to them if this goes on?

[Nigel R]

" the govt needs to do something to prevent the shipping companies charging everyone 20-30 quid just for the admin connected to paying the VAT."

Shipping companies have always charged a fair sized fee for handling VAT/duty when you import from ROW. This is not going to change unless there is a trade agreement set up with the EU.

Whether RM or PF have and will continue to sneak the UK postage costs into that 'admin fee' is up for debate.

" But there are few UK distributors so you have to order direct if you want any other than the most common US makes. This has never been a problem or involved extra delivery costs."

a) the rod manufacturer collected UK VAT on your behalf and then did appropriate customs declarations, such that no handling was required on import to UK, then did a yearly tax return to HMRC

b) the rod manufacturer sent it tax free, and customs was handled by a UK agent (RM or PF etc) on your behalf at point of entry to country, with fees applied and VAT collected etc.

c) you avoided paying VAT which is both lucky and also illegal (fraud?)

are there any other alternatives?

[Jon H]

Posted by Roger Jones 3 on 27/01/2021 09:44:33:

Posted by Jon - Laser Engines on 27/01/2021 09:01:25:

Ripmax claims to be the overall EU distributor for Futaba. I wonder what will happen to them if this goes on?

A very valid point, i had forgotten about that. Will Futaba pull out of Ripmax and go to europe for distribution? That would suck!

Also, as you rightly point out this VAT thing is not about the actual tax and having to pay it, its about being ripped off with the fees. I have imported things from the US and although there was duty and such, i never got stung 30 quid just as an admin fee on top of my VAT and so on. Seems like a con job to me

[Martin Harris - Moderator]

I have to agree with that last point - see my post of 25/1...the salient point applying to exports from the UK to the EU being: "DPD charge a small admin fee to cover customs clearance costs, this has been set at 5-6 Euro per consignment".

[Nigel R]

Jon

UPS stated fee is £11.50.

Your old price £345... not going to try and second guess what proportion of that was shipping.

German VAT is 19%, so I'd assume minus tax that is £280.

New stuff since Jan 1st:

Duty is 2% on guitars, I think

UPS fee is £11.50

VAT is 20%

(£280 + duty + fee) and then VAT on all that lot

(£280 + £7 + £11.50) is £299

£299 * 1.2 = £360

the price you paid doesn't seem too far off, easily accounted by a difference in exchange or shipping?

[kc]

Way back in the 1970's I worked for a forwarding agent ( which is probably still the correct name for the agent handling imports/exports) and the system that prevailed was that some customers agreed a charge in advance and specified that agent handled their package by having the shipper put " notify " with agents name. Then the consignment was handled by that agent at the agreed charge. Anyone who hadn't agreed a price in advance was charged much higher rates!

I think it's probable that a similar system exists today and regular importers will have arranged a fair price with a forwarding agent in advance. Whether a one off or occasional shipment could be arranged in simliar manner at a prearranged price will not be known until someone finds out and tells us! But it's worth a try if you are planning to buy anything abroad - especially if you are able to say it will be a frequent job.

[Frank Skilbeck]

Note that the collection fees etc only apply to goods bought direct from a shop/supplier, if it is brought in by a company as a commercial transaction then they bring it in VAT free and then charge VAT when they sell it, so the likes of Jeti and Multiplex who have UK distributors aren't really affected, except that because of shipping delays due to additional paperwork has put up the cost of freight (especially as lorries from the EU are now often going back empty to avoid any delays).

Small companies/suppliers should eventually be able to set up to pay VAT in the EU for their EU customers or, if commercially viable, do as other companies have done and set up a distribution hub within the EU, note Ripmax Germany have German address and appear to service Europe from there. But yes UK companies that supplied direct to EU customers will not have as easy an access as before.

[kc]

Frank said " if it is brought in by a company as a commercial transaction then they bring it in VAT free " which seems quite different to the previous method where VAT was paid on import and the VAT registered trader offset the VAT eventually.

I assume that means only VAT registered companies can do that? What happens when smaller non VAT companies import stuff? And in particular what happens to those " UK warehouse" companies that sell online from China who dont charge VAT?

Edited By kc on 27/01/2021 18:31:22

[Jon H]

Posted by Nigel R on 27/01/2021 15:57:44:

Jon

UPS stated fee is £11.50.

Your old price £345... not going to try and second guess what proportion of that was shipping.

German VAT is 19%, so I'd assume minus tax that is £280.

New stuff since Jan 1st:

Duty is 2% on guitars, I think

UPS fee is £11.50

VAT is 20%

(£280 + duty + fee) and then VAT on all that lot

(£280 + £7 + £11.50) is £299

£299 * 1.2 = £360

the price you paid doesn't seem too far off, easily accounted by a difference in exchange or shipping?

According to my invoice from UPS there was £70 and change charge for 'government fees' and £22 and change in 'handling fee'. The same invoice also showed my VAT charge as £0 so if someone can explain that would be lovely

As for duty of 2%, where did that come from? what happened to no tariffs and free trade?

As angry as i am about it, the guitar is very pretty. I just need to get better as making noises with it

[Frank Skilbeck]

Posted by kc on 27/01/2021 18:30:05:

Frank said " if it is brought in by a company as a commercial transaction then they bring it in VAT free " which seems quite different to the previous method where VAT was paid on import and the VAT registered trader offset the VAT eventually.

I assume that means only VAT registered companies can do that? What happens when smaller non VAT companies import stuff? And in particular what happens to those " UK warehouse" companies that sell online from China who dont charge VAT?

Edited By kc on 27/01/2021 18:31:22

KC I think you are correct, they can defer or claim it back in their tax accounts, but effectively they pay VAT on the import value and charge VAT of the sales value (and then offset the import VAT back, so if they are reselling it's net zero import VAT) and only for VAT registered companies.

As for online sellers, now if they are selling direct into the UK, they have to collect UK VAT on their sales, so no tax advantage on having a UK warehouse anymore to avoid the VAT. This will apply to the whole EU this summer and it's just that to coincide with Brexit the UK has introduced them now.

[Nigel R]

Posted by Jon - Laser Engines on 27/01/2021 19:40:52:

According to my invoice from UPS there was £70 and change charge for 'government fees' and £22 and change in 'handling fee'. The same invoice also showed my VAT charge as £0 so if someone can explain that would be lovely

As for duty of 2%, where did that come from? what happened to no tariffs and free trade?

As angry as i am about it, the guitar is very pretty. I just need to get better as making noises with it

If the VAT is £0 then you may have already been charged VAT by the German seller?

I would be tempted to query the invoice with UPS. That fee doesn't seem to match their stated fee. And 'government fees' - that doesn't sound right.

[Jon H]

Posted by Nigel R on 28/01/2021 10:25:32:

Posted by Jon - Laser Engines on 27/01/2021 19:40:52:

According to my invoice from UPS there was £70 and change charge for 'government fees' and £22 and change in 'handling fee'. The same invoice also showed my VAT charge as £0 so if someone can explain that would be lovely

As for duty of 2%, where did that come from? what happened to no tariffs and free trade?

As angry as i am about it, the guitar is very pretty. I just need to get better as making noises with it

If the VAT is £0 then you may have already been charged VAT by the German seller?

I would be tempted to query the invoice with UPS. That fee doesn't seem to match their stated fee. And 'government fees' - that doesn't sound right.

The guitar setup was 345 before new year, and 279 after. That matches your maths on the VAT reduction perfectly so the VAT was not charged at the source.

It also seems i was charged no duty as the invoice states 'The total value used for calculation of all duty based fees is 0.00'

The plot thickens

[kc]

Frank - the point used to be ( maybe the same now ) that on importing firms paid VAT based on the CIF value. That is Cost, Insurance and Freight. Back in 1974 when I dealt with this the Cost had to be substantiated by a suppliers invoice which meant VAT was levied on the wholesale price which can be very different to retail or online sales price. I expect this was a loophole which made goods bought online from China etc much cheaper and any current changes are a way to close this serious loophole. I am afraid we will now have to pay the proper price!

[chris larkins]

I placed an order with Motion RC on the 23rd Jan and although the model hasn't arrived yet I did receive an email today from Fed-EX explaining that I would need to settle my bill of £93.17, along with an attached invoice. The split being Import tax £81.17 and a Processing fee of £12.

I don't have any issue with paying the VAT as clearly this is to be expected on any purchase, however nowhere on the Motion RC website did it say that the price DOES NOT INCLUDE any VAT, had it stated that VAT was not included I could have factored an additional 20% onto the price.

So the upshot is it has cost me £12 more than it would have done before Brexit (the Fed-Ex charge), but £93 more than the price advertised as they don't inform you that they have reduced the price by 20%.

Pretty shoddy really as this should be made crystal clear to anyone ordering something to be delivered to the UK.

[Dickw]

I am not surprised to hear that. They don't have "VAT" in the USA so on any orders from there I have always paid our UK taxes etc. via the courier prior to delivery in this country.

I assume buying from europe may end up the same for a while until things settle down.

Dick

 

 

Edited By Dickw on 28/01/2021 23:17:11

[Martin Harris - Moderator]

I don't know what you bought but looking at their site, it states prices include VAT - unless there's been a change of policy or you were looking at a different version of the site?  Did you ask them to send it less VAT as an export order?

If not, it might be an idea to contact them and ask them to refund you the VAT paid in the EU in error.

Example:

Nexa A-24 Banshee 1540mm 60.6" Wingspan - ARF

2 reviews |

Regular price  ^£326⁶³ (incl. VAT)

 

Edited By Martin Harris - Moderator on 28/01/2021 23:44:25

[chris larkins]

When you select UK from the dropdown list this is what is displayed, trouble is it doesn't tell you that the price does not include VAT.