Argggghh.... Aliexpress succumbed to the Eurpoean taxman

[FlyinFlynn]

So from 1st July Aliexpress are now charging 20% VaT on orders destined for Europe, I assume it will be the same for orders to the UK.  I wonder how much of this move can be attributed to Brexit?  It used to be that upto a certain value all taxes were waived.... but no longer...

"From 1 July 2021, AliExpress generally will need to collect VAT on sales of goods delivered to EU consumers, including circumstances where goods are delivered from outside of the EU with order value of up to EUR 150, or where goods are shipped from within EU where the seller is established outside the EU. For more information, please refer to the Help Center."

 

Still cheaper than buying locally though.

[Don Fry]

As my flying mate says, “want to be in the Club, pay yer Club fees”

 

Or don’t moan, if sent a bill to repair the ambulance before it comes. Low tax societies have their consequences. Europe, and the UK, are catching on.

[Geoff S]

They, and others (eg HobbyKing) been trading unfairly by evading VAT for years and putting legitimate traders at risk for years.  It's only right that the issue has been addressed IMO.   It's one of the reasons the model shops I used to use locally no longer exist, forcing me to buy most of my model requirements on-line.  Sadly it's too late for many.

 

Geoff

[Phil McCavity]

It's not attributed to Brexit at all. The EU had already decided on this to be introduced before our exit so it was coming anyway, regardless.

[Jonathan W]

This came in for UK from 1 Jan (post-Brexit), but the EU had the same policy in the pipeline anyway, as Phil says. For UK, anything below £135 purchased from overseas has to have the VAT pre-paid by the seller. If you buy anything (below £135) on ebay from overseas, ebay is now adding 20% to the price automatically. For individual businesses overseas wishing to send low value items here, they are supposed to register for UK VAT. For businesses selling into the EU, apparently it is sufficient for them to register with just one member state. Anything over £135 is subject to the same process as before, where the post office or courier collects the VAT + handling fee.

 

This makes it quite inconvenient for individuals selling things person-to-person across borders. I'm not sure how an individual trader in say USA is going to be bothered registering for UK VAT just to sell you a particular widget. It slides it all into the hands of selling platforms like ebay or Amazon taking their 10% cut. Anyway, this has come as a consequence of the Chinese business practice, as somebody commented already.

[john stones 1 - Moderator]

Chinese business practice ? Aye we all knew it, but bought anyway, and some grumbled when pulled and had to pay up.

A collective effort methinks.

[Mike T]

5 hours ago, Jonathan W said:

This came in for UK from 1 Jan (post-Brexit), but the EU had the same policy in the pipeline anyway, as Phil says. For UK, anything below £135 purchased from overseas has to have the VAT pre-paid by the seller....

You are confusing Import Duty and VAT.  The threshold for duty is £135, typically 2-3% for the type of stuff we import.  There used to be a small concession in that VAT used to be payable on anything over £15 in total.  The Jan 2021 changes removed that concession.

 

If you buy anything over £135 total value, then you'll pay duty on the full amount (not just the excess), VAT is then added on top of all that.  The fee charged by the delivering agency covers the cost of processing the transaction, accounting for the taxes and duty collected and remitting it to the Revenue.

[Ace]

If I understand all this vat/duty/collection fee = Anything bought outside of the UK with the supplier adding vat at 20% and inc postage is less than £135 in total, no further duty/fees are payable ? 

Above £135 and Duty/Collection fee/vat are all payable before receipt?

Edited July 3, 2021 by Ace

[kevin b]

At least now when purchasing under £135.00 we don't have to pay the Post Office tax (often referred to as a "handling fee").

[Jonathan W]

8 hours ago, Mike T said:

You are confusing Import Duty and VAT.  The threshold for duty is £135, typically 2-3% for the type of stuff we import.  There used to be a small concession in that VAT used to be payable on anything over £15 in total.  The Jan 2021 changes removed that concession.

 

If you buy anything over £135 total value, then you'll pay duty on the full amount (not just the excess), VAT is then added on top of all that.  The fee charged by the delivering agency covers the cost of processing the transaction, accounting for the taxes and duty collected and remitting it to the Revenue.

I'm not confused, thank you! It is the case that below £135, VAT is now supposed to be pre-paid by the supplier and import duty does not apply. Above £135, it's the same process as before, where VAT is charged at the UK border and they will also apply duty if applicable to those particular goods.

 

I've been through all this in painful detail recently, trying to explain it to a US supplier with his head in the sand. In the end, I ensured that the order went above the £135 threshold, as he was in denial about the VAT issue. I then had to pay VAT + £8 handling fee to the PO as normal. I was not charged any duty at all, even though I was anticipating it.

 

Anyway, our friend "Ace" has summarised it quite succinctly a couple of posts above.

[Lima Hotel Foxtrot]

16 hours ago, FlyinFlynn said:

So from 1st July Aliexpress are now charging 20% VaT on orders destined for Europe, I assume it will be the same for orders to the UK.  I wonder how much of this move can be attributed to Brexit?  It used to be that upto a certain value all taxes were waived.... but no longer...

"From 1 July 2021, AliExpress generally will need to collect VAT on sales of goods delivered to EU consumers, including circumstances where goods are delivered from outside of the EU with order value of up to EUR 150, or where goods are shipped from within EU where the seller is established outside the EU. For more information, please refer to the Help Center."

 

Still cheaper than buying locally though.

Yep. Don't bother supporting a U.K. based business or a model shop in the U.K. when you can save a few pennies and send the money offshore instead. 

[FlyinFlynn]

5 hours ago, Lima Hotel Foxtrot said:

Yep. Don't bother supporting a U.K. based business or a model shop in the U.K. when you can save a few pennies and send the money offshore instead. 

Hum..... where do you think an awful lot of UK based business's gets their inventory from?    Please feel free to keep paying importers, distributers, wholesalers and stockists for a service you can easily do yourself. I am sick and tired of trolling through multiple sites looking for a locally supplied items that are only 200% more than I can get from Aliexpress - sometimes even quicker than domestic snail mail - When the UK based business get's it's game into gear I might reconsider but when 'local' businesses want €10 or €15 to get off their rrrr's and post me a parcel, which often times takes 7 days or more to arrive when some Chinese bloke will ship it to me for €3 in 10 days I know where my money is going.....VaT inclusive or not ...but hey, if you want to stand on your principle, feel free.

 

[Don Fry]

Fine argument, until it’s your job being exported.

If your job can’t be exported, don’t moan when your wallet is liberated by one who’s has.

Pay tax as needed to keep stuff running.

Edited July 3, 2021 by Don Fry

[kevin b]

It's ok having a rant about UK suppliers charging for shipping, but most of them are doing so at cost price.

It is a known fact that China is exploiting its current  (very) favourable shipping rates into other areas.

How else can they supply items anywhere in the UK cheaper than it costs to send the same item from Coventry to Birmingham ? 

Eventually the playing field will level up, and probably sooner than you think.

Don't forget. We did have a successful film covering manufacturer in the UK, but nobody wanted to buy the company when the owner retired.

Probably because it wasn't profitable enough for a UK buyer. Or it looked like hard work. 

[leccyflyer]

19 minutes ago, kevin b said:

It's ok having a rant about UK suppliers charging for shipping, but most of them are doing so at cost price.

It is a known fact that China is exploiting its current  (very) favourable shipping rates into other areas.

How else can they supply items anywhere in the UK cheaper than it costs to send the same item from Coventry to Birmingham ? 

Eventually the playing field will level up, and probably sooner than you think.

Don't forget. We did have a successful film covering manufacturer in the UK, but nobody wanted to buy the company when the owner retired.

Probably because it wasn't profitable enough for a UK buyer. Or it looked like hard work. 

Or it was obsolete stuff that wasn't a patch on the more modern covering films, including the excellent product from one of those Chinese suppliers.

[kevin b]

3 hours ago, leccyflyer said:

Or it was obsolete stuff that wasn't a patch on the more modern covering films, including the excellent product from one of those Chinese suppliers.

Would that be the same Chinese supplier who supplied the UK manufactured covering alongside its own brand, at a lower price than you could buy it from the local model shop ?

The arguments as to the merits of different covering materials have been aired in many threads on internet forums.

[leccyflyer]

I wouldn't know, I don't have a local model shop and I wouldn't buy that particular product at any price, just like I wouldn't buy DEACs. The more modern films are vastly superior.

[FlyinFlynn]

14 hours ago, Don Fry said:

Fine argument, until it’s your job being exported.

If your job can’t be exported, don’t moan when your wallet is liberated by one who’s has.

Pay tax as needed to keep stuff running.

I don't have a problem paying the due taxes. I commented on how the taxation was now being applied, not griping on having to pay it.. The job export thing is a natural byproduct of emerging economies being more cost effective at production than established economies whose workforce demands higher rewards for their increased labours, please don't try and tell me anything 'we' do will make a blind bit of difference in combatting that. As long as products suffer a 200% or 300% markup while making the trip westwards by conventional routes and the option exists for the individual to access the manufacturer directly (or very nearly directly) then  I for one will be taking advantage of that route, VaT or no, it is still way more cost effective. 

It makes me smile when I see threads like the one currently active regarding fake or genuine Tower Pro servos.... who do you think 'Tower Pro' actually are?   If you are that moralistic concerning sending your money overseas then I suggest you stop buying anything that isn't manufactured entirely in the UK....it should do a lot to conserve your bank balance.

 

14 hours ago, kevin b said:

It's ok having a rant about UK suppliers charging for shipping, but most of them are doing so at cost price.

 

COST PRICE??????    How can it cost £9.54 to send a jiffy bag with a servo in it?  It might be what RM is charging the model shop so in that context it is 'cost price' but when RM is asking that price they are pricing themselves out of the market.

[Don Fry]

Arrwell, staple your wallet to your person, call a local drug dealer when you have a problem, cos the coppers are trying to do the jobs that social services used to do, before they were minimized, said coppers being 20 % less. 
I by the way are not moralistic. I take some pride in my cynicism.

[Mike T]

On 03/07/2021 at 11:05, Jonathan W said:

I'm not confused, thank you! It is the case that below £135, VAT is now supposed to be pre-paid by the supplier and import duty does not apply. Above £135, it's the same process as before, where VAT is charged at the UK border and they will also apply duty if applicable to those particular goods.

My bad - completely mis-read what you'd written! ?

 

For all the 'VAT' UK buyers are now paying to overseas suppliers, I'd be fascinated to know how much VAT the Revenue is actually recovering from the sellers.  If I have to pay tax (and I always factored-in any duty/VAT/fees before making any purchases) I'd rather it was paid/collected in the UK, when I know it is going into the national coffers.

[Lima Hotel Foxtrot]

On 03/07/2021 at 17:50, FlyinFlynn said:

Hum..... where do you think an awful lot of UK based business's gets their inventory from?    Please feel free to keep paying importers, distributers, wholesalers and stockists for a service you can easily do yourself. I am sick and tired of trolling through multiple sites looking for a locally supplied items that are only 200% more than I can get from Aliexpress - sometimes even quicker than domestic snail mail - When the UK based business get's it's game into gear I might reconsider but when 'local' businesses want €10 or €15 to get off their rrrr's and post me a parcel, which often times takes 7 days or more to arrive when some Chinese bloke will ship it to me for €3 in 10 days I know where my money is going.....VaT inclusive or not ...but hey, if you want to stand on your principle, feel free.

 

Well, gosh, here was I thinking that these products just magically appeared on shelves from out of thin air. I am glad you have taken time out of trolling multiple sites looking for an item that has less than a 200% mark-up. It's clearly all the fault of UK based retailers choosing en-masse to rip us off who have forced you to shop overseas.

[Nigel R]

Quote

For all the 'VAT' UK buyers are now paying to overseas suppliers, I'd be fascinated to know how much VAT the Revenue is actually recovering from the sellers.  If I have to pay tax (and I always factored-in any duty/VAT/fees before making any purchases) I'd rather it was paid/collected in the UK, when I know it is going into the national coffers.

 

In theory, IR recover all the VAT. Collected by RM or PF "with appropriate handling fee", or paid to registered overseas seller, what's the difference? Only the RM/PF handling fee as far as I can tell.

 

 

[FlyinFlynn]

2 hours ago, Lima Hotel Foxtrot said:

Well, gosh, here was I thinking that these products just magically appeared on shelves from out of thin air. I am glad you have taken time out of trolling multiple sites looking for an item that has less than a 200% mark-up. It's clearly all the fault of UK based retailers choosing en-masse to rip us off who have forced you to shop overseas.

Actually the first site I came across, so plenty of time left to troll for other reasons. Until you stop buying anything mass produced then your cash is ending up overseas, apart from the extra you are paying someone else to import the items for you. I just choose to accept the reality that my money is going overseas and I opt to send it there without paying someone else to help me do it. There was a time when it was pretty much impossible to import items as an individual so you had to pay someone to do that for you, but those days have gone now and you can take on the job of importing stuff yourself....or you can continue to pay someone else to do it for you. Your choice, just as my buying habits are my choice and I don't appreciate you and Don mocking me for making it.

[Mike T]

3 hours ago, Nigel R said:

 

In theory, IR recover all the VAT. Collected by RM or PF "with appropriate handling fee", or paid to registered overseas seller, what's the difference? Only the RM/PF handling fee as far as I can tell.

Yes, what I meant was that's it's fairly easy for HMG to audit the monies collected 'onshore', but how do they check what's been collected overseas?  If say Banggood collects £20k in VAT from UK customers, what's to stop them from declaring only £10k VAT collected and pocketing the difference?  I can't see many overseas companies allowing UK agents to examine their books!

 

You'd like to think that HMG has put some sophisticated, well-tried system in place to deal with such eventualities, but take a look around you and ask yourself how likely is that the case?!

[Lima Hotel Foxtrot]

2 hours ago, FlyinFlynn said:

Actually the first site I came across, so plenty of time left to troll for other reasons. Until you stop buying anything mass produced then your cash is ending up overseas, apart from the extra you are paying someone else to import the items for you. I just choose to accept the reality that my money is going overseas and I opt to send it there without paying someone else to help me do it. There was a time when it was pretty much impossible to import items as an individual so you had to pay someone to do that for you, but those days have gone now and you can take on the job of importing stuff yourself....or you can continue to pay someone else to do it for you. Your choice, just as my buying habits are my choice and I don't appreciate you and Don mocking me for making it.

But you continue to miss  (ignore...?) my original statement saying that by "cutting out the middle man" you are denying UK businesses -i.e. the dwindling number of model shops and specialist retailers- the chance to make the money that keeps them going and provides jobs, keeps money circulating within the economy of this country and ensures that the LMS will still be available to other modellers.