Budget 2016 - overseas purchases, VAT implications

[ecoleman]

A thought - if you buy from an importer, does the importer not pay the host countries equivalent of VAT anyway?

Slightly OT but related. - I'm going to NY in Nov and I'll be going to B&H photo. No doubt I'll make a purchase Of course, it'll be declared on arrival back to the UK for import duty and even though I'll pay sales tax in the US, will I have to pay VAT in the UK too? That doesn't seem fair?

If you buy goods in the UK which you will be taking out of the country you can ask the retailer for a form that they complete which will allow you to reclaim the VAT at customs when you leave the UK.

My guess would be the US would have a similar system.

 

[Meeten]

If you buy goods in the UK which you will be taking out of the country you can ask the retailer tomorrow a form that they complete which will allow you to reclaim the VAT at customs when you leave the UK.

My guess would be the US would have a similar system.

I am pretty sure you cannot reclaim the sales tax.

 

[jerry12953]

you're missing the point - they say they are importing legally and paying all the vat etc ... if they can actually prove thats the case then their prices shouldnt change at all (the argument being that they have a better source of supply and can thus offer keen prices despite paying the vat ... if thats true then fantastic, and if they can prove its true i'd be happy to use them.

As has been said before, I don't think anybody knows how HDEW's business model works. How they can charge (almost) grey prices AND include a VAT invoice is a mystery.......

 

[BillN_33]

you're missing the point - they say they are importing legally and paying all the vat etc ... if they can actually prove thats the case then their prices shouldnt change at all (the argument being that they have a better source of supply and can thus offer keen prices despite paying the vat ... if thats true then fantastic, and if they can prove its true i'd be happy to use them.

We now have an "open market" in Europe ........ more and more on-line sales - most of the general public have never heard of the word "grey importer" never mind knowing what taxes and import duty should be paid and I am sure in a Court of Law would never be made to account personally if duty/VAT/Sales Tax has not been paid. Lack of knowledge of the Law may not be an excuse but it many cases it is accepted as such.

If the EU and UK governments cannot control the situation then it is totally unfair to put any responsibility on the heads of its citizens

 

[BillN_33]

If you buy goods in the UK which you will be taking out of the country you can ask the retailer for a form that they complete which will allow you to reclaim the VAT at customs when you leave the UK.

My guess would be the US would have a similar system.

I would think that is only possible if you are not a UK or EU Citizen/Passport holder

(In theory you are then supposed to declare the goods in your home country and pay the sales tax)

In Japan you can reclaim the Japanese Sales Tax in most department stores - in other countries it is when you are through Customs, (provided you have the correct documentation)

 

[odd jim]

I would think that is only possible if you are not a UK or EU Citizen/Passport holder

(In theory you are then supposed to declare the goods in your home country and pay the sales tax)

But you've already paid the sales tax to the country you owe it to?

 

[big soft moose]

We now have an "open market" in Europe ........ more and more on-line sales - most of the general public have never heard of the word "grey importer" never mind knowing what taxes and import duty should be paid and I am sure in a Court of Law would never be made to account personally if duty/VAT/Sales Tax has not been paid. Lack of knowledge of the Law may not be an excuse but it many cases it is accepted as such.

If the EU and UK governments cannot control the situation then it is totally unfair to put any responsibility on the heads of its citizens

nope - ignorance of the law is not a defence ... and the open market is irrelevant to good purchased from hongkong or america

what generally happens if customs intercept a parcel where correct vat hasnt been paid is that they impound it and send the customer (the importer) a bill , if they don't pay the bill they don't get the camera - some grey dealers will reimburse the customer , others won't

 

[BillN_33]

But you've already paid the sales tax to the country you owe it to?

The general principle with an example

You are Japanese - you buy a camera in the UK High Street - you reclaim the VAT when you have passed through UK Customs

You then declare the camera as you enter Japan and pay Japanese sales tax

 

[BillN_33]

nope - ignorance of the law is not a defence ... and the open market is irrelevant to good purchased from hongkong or america

what generally happens if customs intercept a parcel where correct vat hasnt been paid is that they impound it and send the customer (the importer) a bill , if they don't pay the bill they don't get the camera - some grey dealers will reimburse the customer , others won't

you clearly know best

I did indicate that Ignorance of the Law is no defence (generally) - but are you sure this applies to European Tax Law

try buying one from Germany and pay the German Authorities the VAT/Import Duty due to them when they discover, after the event, it has not been paid by the importer ....... would you expect someone living in the UK to pay up and if not the Germans to take him to court

That's is what is now beginning to happen - as I said close one loophole and another opens - HK are using other EU countries as the first shipping call into the EU before onward shipping to the UK, to confuse and maybe hide what they are doing - so the UK tax authorities need to not only look at what come in from China, but also from other EU countries

 

[ecoleman]

I am pretty sure you cannot reclaim the sales tax.

Mmmmm, looks like you are right, except in Louisiana, but it seems that online orders may be excempt from sales tax so maybe you could order online when you are there.

 

[ecoleman]

I would think that is only possible if you are not a UK or EU Citizen/Passport holder

Yes, but the OP is not going to be leaving the UK is he? He will be leaving the US.

 

[BillN_33]

Mmmmm, looks like you are right, except in Louisiana, but it seems that online orders may be excempt from sales tax so maybe you could order online when you are there.

Isn't this State Sales Tax

 

[ecoleman]

Isn't this State Sales Tax

Yes, it appears you can not claim back US sales tax except in Louisiana.

 

[big soft moose]

you clearly know best

I did indicate that Ignorance of the Law is no defence (generally) - but are you sure this applies to European Tax Law

try buying one from Germany and pay the German Authorities the VAT/Import Duty due to them when they discover, after the event, it has not been paid by the importer ....... would you expect someone living in the UK to pay up and if not the Germans to take him to court

That's is what is now beginning to happen - as I said close one loophole and another opens - HK are using other EU countries as the first shipping call into the EU before onward shipping to the UK, to confuse and maybe hide what they are doing

You are clearly very confused - import from the Eu doesnt attract import tax , import from HK does regardless of which countries it passes through first

so if you buy a camera from HK via germany , no import taxes are due to the german authorities as the camera is merely in transit , however you are liable for the 20% vat HMRC when the camera reaches you in the UK

 

[BillN_33]

You are clearly very confused - import from the Eu doesnt attract import tax , import from HK does regardless of which countries it passes through first

so if you buy a camera from HK via germany , no import taxes are due to the german authorities as the camera is merely in transit , however you are liable for the 20% vat HMRC when the camera reaches you in the UK

you clearly do not understand - and have not read what I said - as you keep repeating the same point "imports from the EU dosent attract import tax"

I buy a camera from Germany from grey importer, (funnily enough it is not something that is unique to the UK), on which no VAT or Duty has been paid - it is delivered to me in France or the UK from Germany - am I supposed to know that VAT/Duty is has not been paid to the German Tax authorities

Duty is due on imports into the EU in the first EU country that it enters - then it can be shipped around the EU without any more taxes.

What I said is "HK are using other EU countries as the first shipping call into the EU before onward shipping to the UK, to confuse and maybe hide what they are doing" - who are the Germany authorities going to go after for the VAT? - a Frenchman, Englishman, etc. - it is not just a "camera" problem and it is being exploited in other EU countries ....... and as I said (if it is in Transit) the UK authorities also need to look at imports that are transmitted thru EU countries as well as direct from HK.

I am not telling you what is right or wrong - I am telling you what is happening, and why it will be a problem for the UK authorities to police . which is what the thread is about

(why do you keep referring to import Tax - we are discussing Import Duty and VAT, (a tax on added value), of which VAT is by far the greater)

 

[big soft moose]

you clearly do not understand

I buy a camera from Germany from grey importer, (funnily enough it is not something that is unique to the UK), on which no VAT or Duty has been paid - it is delivered to me in France or the UK from Germany - am I supposed to know that VAT/Duty is has not been paid to the German Tax authorities

Duty is due on imports into the EU in the first EU country that it enters - then it can be shipped around the EU without any more taxes.

What I said is "HK are using other EU countries as the first shipping call into the EU before onward shipping to the UK, to confuse and maybe hide what they are doing" - who are the Germany authorities going to go after for the VAT? - a Frenchman, Englishman, etc.

No duty is due on entry to the EU in the first country in which it is delivered, not countries it passes through in transit

if you buy a camera from a grey importer putatively based in germany (spain seem to be another common one) but actually based in HK, it is shipped from hongkong to a german distrubition warehouse (which is almost certainly not theirs - mostly the distribution warehouses belong to the shipping companies not the dealers) at this point german duty/vat equivalent is not payable because the goods are still in transit .. it is then shipped from germany to you where you take delivery of it, at that point you are liable for 20% Vat payable to HMRC as the first recipient of the goods in the EU ... which may come as a nasty shock if you thought you were dealing with a legitimate german company , but thats not a defence , as legally the onus is on you to know who you are dealing with

this may not seem very fair, but thems the perils of dealing with grey importers - if it worries you buy from a white market dealer and avoid all the risk

Which also explains why if i buy from a grey market dealer who is alledgedly importing the goods to the UK themselves I want to see proof that import tax has been paid - especially if they say in their teeny print that the customer is legally the importer.

If on the otherhand you buy a camera from a bricks and mortar camera shop in germany (and it doesnt say anywhere in the terms and conditions that you are the importer etc) then you don't have anything to worry about - if the good were brought in without paying german import taxes that is the dealers problem as the first recipient within the EU.

The trick is knowing the difference, and merely alledgedly having a german office or phone number isnt sufficient - look how many alledged UK offices turn out to be virtual office mail fowarding and call handling services run by the likes of Regus

 

[BillN_33]

No duty is due on entry to the EU in the first country in which it is delivered, not countries it passes through in transit

if you buy a camera from a grey importer putatively based in germany (spain seem to be another common one) but actually based in HK, it is shipped from hongkong to a german distrubition warehouse (which is almost certainly not theirs - mostly the distribution warehouses belong to the shipping companies not the dealers) at this point german duty/vat equivalent is not payable because the goods are still in transit .. it is then shipped from germany to you where you take delivery of it, at that point you are liable for 20% Vat payable to HMRC as the first recipient of the goods in the EU ... which may come as a nasty shock if you thought you were dealing with a legitimate german company , but thats not a defence , as legally the onus is on you to know who you are dealing with

this may not seem very fair, but thems the perils of dealing with grey importers - if it worries you buy from a white market dealer and avoid all the risk

Which also explains why if i buy from a grey market dealer who is alledgedly importing the goods to the UK themselves I want to see proof that import tax has been paid - especially if they say in their teeny print that the customer is legally the importer.

If on the otherhand you buy a camera from a bricks and mortar camera shop in germany (and it doesnt say anywhere in the terms and conditions that you are the importer etc) then you don't have anything to worry about - if the good were brought in without paying german import taxes that is the dealers problem as the first recipient within the EU.

The trick is knowing the difference, and merely alledgedly having a german office or phone number isnt sufficient - look how many alledged UK offices turn out to be virtual office mail fowarding and call handling services run by the likes of Regus

I just don't understand what you are getting at, .................. from what you have said

1). You clearly know that all the cheaper price supplies are grey importers who have not paid the UK VAT or Import Taxes, (whatever they are)

2). Even though you have been given examples of HDEW invoices on which taxes has been paid you still do not accept that they are paying "Import Taxes" .... therefore in your view they are breaking the law or whoever buys from them is

3). You are quite clear that the UK purchasers from such people are liable to UK VAT and Import Tax and that such purchases are breaking the law if VAT is not paid and and have no excuse for not doing so

4). You are clearly familiar with all EU law and are of the opinion that if a Brit, Frenchman, Pole or whoever breaks such a law he will be deemed to know the law and that his lack of knowledge of such is no excuse, I better send my German 810 back then .... who do I owe the tax to, it was delivered to me in France?

You should therefore not have a problem - just buy from your local dealer and stop considering any options

You are probably correct on the above as they are very obvious, who cares apart from you ....... maybe HMIT needs you?

 

[big soft moose]

1). You clearly know that all the cheaper price supplies are grey importers who have not paid the UK VAT or Import Taxes, (whatever they are)

I suspect that (and clearely the chancellor does too, and he is in a position to know) - I don't know it for sure and others have said that its not the case - all i am asking is that a grey importer or dealer actually prove that its not ... so far the silence is deafening

2). Even though you have been given examples of HDEW invoices on which taxes has been paid you still do not accept that they are paying "Import Taxes" .... therefore in your view they are breaking the law or whoever buys from them is

I don't know whether they are or not - but they havent responded to my request for proof that they are paying VAT (and duty in the case of lenses) on import... you don't seem able to grasp that a a VAT invoice on sale is not proof of vat being paid on import .. they are two completely different things

3). You are quite clear that the UK purchasers from such people are liable to UK VAT and Import Tax and that such purchases are breaking the and have no excuse

I'm quite clear that any importer of camera kit into the UK is liable for VAt and Import tax ... and that being ignorant of that fact is not a defence to a charge of not paying it - the reason we say it over and over again on these threads is so that people arent taken unawares - if someone knowingly choses to break the law then thats between them their concience and the tax man , but people shouldnt be misled by grey importers having uk phone numbers etc when they arent in fact based in the uk (Hdew and kerso excepted)

4). You are clearly familiar with all EU law and are of the opinion that if a Brit, Frenchman, Pole or whoever breaks such a law he will be deemed to know the law and that his lack of knowledge of such is no excuse

I'm certainly not familiar with all EU law or even all uk law - I am however aware of the legal principle in the uk that ignorance of the law is not a defence, and therefore that its a good idea to do some research before doing something which might well be a law break - like evading tax

You are probably correct on the above as they are very obvious, who cares apart from you ....... maybe HMIT needs you?

Everyone should care - vis the points in 3 and 4 - you have argued that the customer might not know that the imports are from outside the EU or not know that its an offence etc etc - ergo if someone asks "whats all this grey import marlarkey then" it is only fair to tell them

and George Osborne clearly cares vis the OP on this thread

Also if its very obvious why are you arguing that its not so ?

 

[ecoleman]

I just don't understand what you are getting at, .................. from what you have said

1). You clearly know that all the cheaper price supplies are grey importers who have not paid the UK VAT or Import Taxes, (whatever they are)

2). Even though you have been given examples of HDEW invoices on which taxes has been paid you still do not accept that they are paying "Import Taxes" .... therefore in your view they are breaking the law or whoever buys from them is

3). You are quite clear that the UK purchasers from such people are liable to UK VAT and Import Tax and that such purchases are breaking the law if VAT is not paid and and have no excuse for not doing so

4). You are clearly familiar with all EU law and are of the opinion that if a Brit, Frenchman, Pole or whoever breaks such a law he will be deemed to know the law and that his lack of knowledge of such is no excuse, I better send my German 810 back then .... who do I owe the tax to, it was delivered to me in France?

You should therefore not have a problem - just buy from your local dealer and stop considering any options

You are probably correct on the above as they are very obvious, who cares apart from you ....... maybe HMIT needs you?

I can't see who you are replying to, but I have a very good idea. You may as well go an bang your head against a wall for half and hour.

I've bought from HDEW before and have received a VAT invoice. As far as I am aware they are registered in the UK, are Uk VAT registered and it is not for me to question the prices they charge or whether or not they pay all relevant taxes over the HMRC. That is for HMRC to police.

 

[big soft moose]

I can't see who you are replying to, but I have a very good idea. You may as well go an bang your head against a wall for half and hour.

The odd thing here being that you and I are actually in agreement on this thread ... but hey don't let that stop you making unrelated personal gibes

 

[BillN_33]

why should anyone have to prove anything to you for just a camera sale

It has taken the C of E some time to figure it out - perhaps his mate has a grey import business

how can anyone research every purchase

George O couldn't care a stuff - one of his minions drafted the legislation - George probably has a cupboard full of grey import Leicas - someone told his that they were good investment

there is probably a double scam somewhere but if I figured it out, (but it may be obvious), and published it - I would probably get shot

That's the way of our wonderful democracy, free enterprise!!!

Chill!!! - it's only money

 

[BillN_33]

OK - you have made your point - next time I buy from a "grey" - I'll buy it in my wife's name ............. sadly my mother-in-law died a few years ago - but my mother is 94 and alive and kicking, that's an idea - they are not going to come after an old lady, I'll ask her about VAT next time I speak to her

 

[big soft moose]

why should anyone have to prove anything to you for just a camera sale

They don't have to, but theywon't get my business if they don't - its like if i hire say a builder I want refferences to check out, he doesnt have to give them but if he doesnt i don't hire him ... for a good tradesman thats not a problem, for a shyster it is.

same applies here if as you and others keep saying they are all above board and purer than the driven snow why would they have a problem with demonstrating it ? don't they want to sell cameras ?

 

[big soft moose]

OK - you have made your point - next time I buy from a "grey" - I'll buy it in my wife's name ............. sadly my mother-in-law died a few years ago - but my mother is 94 and alive and kicking, that's an idea - they are not going to come after an old lady, I'll ask her about VAT next time I speak to her

Seriously bill - that wasnt my point, if you want to knowingly evade VAT then thats between you and HMRC , its not my business - on the other hand if you didnt know that XYZ dealer sells grey, or didnt understand what grey is and asked then i'dve explaied it so you can make an informed choice

 

[BillN_33]

Pete - let me throw in another "joker"

VAT in Switzerland is a max of 8% ... no grey sellers there .. just competitive prices for the Swiss

Switzerland has a virtual "open" border with France

Annemasse/Geneve is just joined - I have worked in both places, well Annecy and Geneve

when taxes get too high there will always be avoidance and unfortunately evasion - it is in the nature of man

Maybe a fundamental rethink is needed ... does reducing Corporation Tax create jobs or does reducing VAT .. but we are stuck in the Euro 20% VAT model ... I've no idea, but in any way have given up on the lot of "them"

Taxes always seem to go up, (which you could say goes against the basic laws of economics)

 

[big soft moose]

Maybe a fundamental rethink is needed ... does reducing Corporation Tax create jobs or does reducing VAT .. but we are stuck in the Euro 20% VAT model ... I've no idea, but in any way have given up on the lot of "them"

now thats a different question and one where we probably do agree, i'm in favour of people not breaking the law (especially not being tricked into breaking the law) but that doesnt meani don't think the law is stupid

- other options are possible, such as having no Vat at all but increasing income tax and closing all the loopholes ... net result you don't penalise the poor and the rich pay more - from ever man according to his ability to each according to his needs etc

on a more modest front euro doesnt dictate our vat - the brown govt reduced it to 15% to try to stimulate the economy - the condems put it back up and then up to 20% for austerity reasons - it in the govts gift to reduce it if they wanted to, but they don't

 

[BillN_33]

Income Tax

In 1973, the top rate of Income Tax stood at 75 per cent before Labour's Denis Healey raised it to 83 per cent in his first Budget. A surtax of 15 per cent on "investment income" meant a de facto marginal rate of 98 per cent.

what do you think that did for Tax evasion and ... the legal Tax avoidance

I started work in 1965 ...... OK I was never anywhere near those rates .......... but .........it caused an enormous increase in Tax avoidance and evasion that still has repercussions today

VAT - Euro - we will always stay in line with the Euro zone as long as we are part of it ...... we have and are moving towards harmonised taxes, no matter what the UK government say

High taxes kill incentive, IMHO ....... that's why the French are so miserable, the French, (we), pay 15% social charges on almost all income, including unearned income, (Bank interest Dividends and the like), as well as income tax rates similar if not higher than the UK ... difficult to get some to work a 5 day weeks or more than 7 hours a day - weekend are a no-no and the supermarket is full of Fridays

 

[viv1969]

If goods are shipped to any EU country from China, it's the accompanying paperwork that dictates where import taxes are due.

If the consignee is (for example) a German company / individual, then the duty is due in Germany. It doesn't matter if it's then being sent in to the UK.

If the consignee is a UK recipient, but there's a German agent as notify party, then so long as the paperwork is clearly (and I do mean VERY clearly) marked GOODS IN TRANSIT, then the UK recipient is liable for the duty.

 

[BillN_33]

If goods are shipped to any EU country from China, it's the accompanying paperwork that dictates where import taxes are due.

If the consignee is (for example) a German company / individual, then the duty is due in Germany. It doesn't matter if it's then being sent in to the UK.

If the consignee is a UK recipient, but there's a German agent as notify party, then so long as the paperwork is clearly (and I do mean VERY clearly) marked GOODS IN TRANSIT, then the UK recipient is liable for the duty.

I know

 

[magicaxeman]

It depends on the item - when a camera body that is $999 in the states is £999 here (which tends to happen arround launches) it would still be cheaper to buy it from the states and pay the import vat

$999 is £691 at current rates of exchange , so the vat is £138.20 , making the whole vat paid price £829.20 - thats still a saving of £169.80 - i'd be up for that

You've left a couple of important parts of the calculation that will affect the imported cost.

The way its worked out is:

item cost + shipping costs + 4% import duty + 20 % VAT + £10 handling fee

Camera + shipping (expedited @ $50) = £723

Import duty = £28.92

20 % VAT on subtotal = £158.34

Handling fee = £10

Total cost = £920.26

So your saving is only just over £78

Ive bought items from the states in the past when they weren't available here and this is the way its been charged, the handling fee is charged by the postal service our end for calculating and collecting the import duty & VAT, this can be negated if you buy from a retailer in the states that calculates and collects the charges at the point of purchase but overall the only way to make real savings is to buy grey market where no matter what they say they do avoid duties & VAT, they couldn't afford to sell for the prices they do if they paid them.

The other fact thats worth remembering is that the rules have changed on imports now, whereas anything worth £100 or under used to be ignored it isn't now! Anything worth over £18 attracts 20% VAT and anything over £100 will also attract import duty as well.

Also worth noting is that if you buy from within the EU you pay the country you are buying from VAT, this was a pain when we where at 17.5% VAT and Germany had a rate of 19%, but now you save 1% on VAT, but its important to note as countries could raise their VAT rates making purchasing from them more expensive than thought.

 

[big soft moose]

no - no import duty on camera bodies, and for a purchase of that value i'd expect free shipping as well