Grey imports snags?

[StewartR]

I'd always thought the difference between avoidance and evasion was a good accountant .....

Jimmy Carr thought that. So did Chris Moyles. They weren't right, and nor are you.

 

[Yellowbelly]

Also just to pick up the customs duty isnt 20% - customs duty varies depending on the comodity code (which varies depending on whats being bought and where from), but for electronics from outside the EU its usually about 9% (theres various calculators on line) - however on top of customs duty you also have to pay VAT at 20%

so for example a number of grey importers have the 7D available for £575

so total bill will be £575 + Customs duty circa £51.57 + Vat £115 = £741.57

UK price is about £900 so you still make about a £150 saving (depending on whether the importer also charges shipping) - whether that saving is worth the risk regarding warranty etc is a call the individual needs to make themselves

most grey importers say they will refund customs charges - whether they really will reportedly varies from importer to importer - some are basically tellingporkies, some will refund the whole lot without question, and somewill only refund to the value they mark on the parcel. - I'm not saying anything about any specific company.

On the whole though its wise to budget as though they won't so that you are pleasantly suprised if they do

Lastly just to mention thast many importers offer a discount if you pay by Bank transfer - this is fine if you trust the company, but it offers the least consumer protection, so if you arent 100% sure of the supplier its better to pay by credit card or paypal

Just a correction here. VAT is payable on duty too, so if the item price is £575, then duty @ 9% = £51.75, and VAT at 20% = £125.35 (i.e. 20% of £575 + £51.75).

 

[big soft moose]

good point well made - though it is a bit silly that they can tax you on a tax

 

[Yellowbelly]

good point well made - though it is a bit silly that they can tax you on a tax

Such is life. When you buy a litre of petrol or diesel, you pay VAT on customs duty and excise duty! Doesn't it make you feel warm inside that you are supporting the government's good causes?

 

[Dave *]

good point well made - though it is a bit silly that they can tax you on a tax

They do it on petrol and diesel as well, add the duty and vat is payable on the total.

 

[Dave *]

Such is life. When you buy a litre of petrol or diesel, you pay VAT on customs duty and excise duty!

Fastest finger wins, I need to be quicker .

 

[mrgubby]

Jimmy Carr thought that. So did Chris Moyles. They weren't right, and nor are you.

Well, that put my sense of humour in its place, I'll try and not let it out again.

 

[big soft moose]

a while a go I looked at setting up a grey import business with a mate (not cameras - machine tools) but for us at least the maths didn't add up , by the time you'd paid for the goods in America or the far east, had them shipped to the UK, and paid the import duty and VAT there was no profit in any price that could undercut UK prices.

Short of smuggling , which we didn't consider for both ethical reasons and because we like not having a criminal record, the only way we could find to make it work was to only supply a few specialised items and to buy those in bulk thus getting a better deal from the American wholesaler - that might have worked but we decided that the financial risk of stocking up on those few items and then not being able to sell them in sufficient number , was too great.

Of course cameras may be a different kettle of fish , I'm not accusing anyone of underhand practice, just recounting my experience

 

[magicaxeman]

Why don't the HMRC clamp down on this type of thing if they know it is going on?

They have but the suppliers just change routes to avoid it, one I have heard of is the camera being sent to another EU country such as Germany and then onto the UK, as the item is then seen to be originating within the EU it doesn't attract so much attention.

Can I ask a question ? - If you import the camera via Digtal Rev for example and pay the 20% import duty - is it still classed as illegal even if you have paid the duty?

Uk duty is payable as follows.

Cost of goods + cost of shipping

4% import duty is charged on the combined total

20% VAT is added to the total cost of goods + cost of shipping + 4%


If you declare your import (you are the importer and responsible for all duty/tax when ordering a camera from abroad no matter what the seller says) and pay the total sum of combined import duty/tax then its now a legal import but the warranty issues remain and if you have to send it abroad to be repaired you could find yourself being clobbered for import duty/tax for a second time.
Even without the latter paying the duty/taxes still doesn't give you the warranty cover you would have on a genuine UK bought item and you'll find your most likely only saving a few quid whilst hastening the demise of our home photo retailers.

 

[Blank_Canvas]

Definitely true, a good accountant will always know what is legal and what is illegal and should never allow his client to commit tax evasion.

The accountant doesn't make money from the ex-client in jail or made bankrupt by HMRC .

It's true. I am a UK tax payer and my tax is deducted every month by my employer. However, as I spend more time out of the UK I claim all of my tax back for the entire year. The total amount shown on my P60. Now this is a very difficult area, if it wasn't for my accountant then I wouldn't have a clue or even try to do this. She contacted me the other day and advised me if I needed to keep this going into next year I should leave the country. I'm currently in Lanzarote at the moment. My ticket, boarding pass and meals are also evidence of my residence outside the UK. It's all above board, ethical and totally legal.




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[hollis_f]

Uk duty is payable as follows.

Cost of goods + cost of shipping

4% import duty is charged on the combined total

20% VAT is added to the total cost of goods + cost of shipping + 4%

Except that 4% is the wrong figure. Duty rates vary, cameras are 0% while lenses are subject to a duty of 6.7%.

 

[kev2010]

Never purchased grey myself but whilst this thread highlights the snags, there are also many positives?

In respect of businesses that suffer because of grey imports i think that a solid business with a solid business plan will do well regardless of the grey market. A business that puts all eggs in one or few baskets such as reliance on forum sales is a business with a weaker plan that could suffer. Such business failure will be down to many factors unrelated to grey imports. But that's the way of the world I guess?

 

[Blank_Canvas]

Never purchased grey myself but whilst this thread highlights the snags, there are also many positives?

In respect of businesses that suffer because of grey imports i think that a solid business with a solid business plan will do well regardless of the grey market. A business that puts all eggs in one or few baskets such as reliance on forum sales is a business with a weaker plan that could suffer. Such business failure will be down to many factors unrelated to grey imports. But that's the way of the world I guess?

Lots of positives definitely.

However, In respect of a solid business plan which I totally agree with, there is only so far you can diversify in respect to selling cameras and accessories unless you start selling microwaves, washing machines etc etc and become another Dixons.


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[StewartR]

Never purchased grey myself but whilst this thread highlights the snags, there are also many positives?

Well, the title of the thread asks about snags, so perhaps people were just answering the OP's question.

And anyway, how many positives are there? (1) Can sometimes be cheaper than UK prices, even allowing for import duty and VAT. (2) Stock availability can sometimes be better, especially for newly released equipment. That's about it, I think, whereas as this thread has illustrated the snags are potentially more numerous and potentially more subtle.

 

[kev2010]

Well, the title of the thread asks about snags, so perhaps people were just answering the OP's question.

Of course Stewart. Just a friendly observation that I made. I apologise for commenting.

 

[kev2010]

Double post, please ignore

 

[Blank_Canvas]

Chilling out in Lanzarote this week. Came across one of those electrical shops as you do. Selling the new Sony Alpha 7 + 18-55mm lens for €599 (£493) that's ridiculously cheap price.




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[NeilA1975]

HDEW are a UK based company that deals in grey imports, THEY take responsibility and are the legal importer. They also pay the UK vat as they are in the UK.

The others like Panamoz, Digital Rev etc are based in Hong Kong and they use illegal methods to get the goods into the country (and you, as the buyer are responsible for the UK declaration and duty).

They don't pay the vat or duty as it is not their responsibility. Some do promise to refund the duty if you pay it, but to complicate matters they normally falsely declare the item and it's value on the HK customs declaration.

Actually Panamoz terms of sale are DDP (delivered duty paid) so it is entirely their responsibility to to ensure all customs formalities are taken care of. Not sure of digital rev, but Panamoz have this specifically mentioned in their terms and conditions. Furthermore, if you feel that they're doing anything dodgy, ask for a copy of the customs entry used to import, it will reveal all.

 

[NeilA1975]

....Digital Rev state that the importer is responsible for any taxes and duties applicable, essentially the shipment term is 'DDU', delivered duty unpaid. As this is the case and keeping all things legit, if you decide to purchase from digital rev, ensure you have the commercial invoice, shipping invoice and packing list from them. You will need this to ensure the correct amount of duty and vat are applied at entry. Again it's your best interest to ensure you have this as it is your responsibility should anything go wrong.

 

[NeilA1975]

It's not "questionable"; it's 100% illegal and you know it. If you want to save money, I suggest you should consider stealing one. It works out much cheaper, and it's just as legal.

Sorry what is illegal?

 

[Dave *]

Actually Panamoz terms of sale are DDP (delivered duty paid) so it is entirely their responsibility to to ensure all customs formalities are taken care of. Not sure of digital rev, but Panamoz have this specifically mentioned in their terms and conditions. Furthermore, if you feel that they're doing anything dodgy, ask for a copy of the customs entry used to import, it will reveal all.

Anyone who buys from Panamoz knows it's dodgy, when the customs declaration on the parcel says "toy" or "electronics parts" with a value around $20 or $30, it should be enough to make it quite plain.

For example, one of many such reports:

I'm new to this forum but just wanted to share my experience of buying E-M1 + mZD12-40mm from Panamoz.

I ordered the kit on Tuesday afternoon. I've paid via Paypal (£1450).

The invoice on the outside of the box states 'Sample toy accessory' worth $69 ;-) Inside I've found a Panamoz warranty card (2 years) with reference nr. In case of a repair/exchange I balieve one has to send the equipment back to Panamoz UK contact address and from there is't being send back to HK for repair/replacement.

 

[NeilA1975]

Anyone who buys from Panamoz knows it's dodgy, when the customs declaration on the parcel says "toy" or "electronics parts" with a value around $20 or $30, it should be enough to make it quite plain.

For example, one of many such reports:

In which case they need reporting.

 

[OldCarlos]

In which case they need reporting.

Here ya go; http://www.hmrc.gov.uk/reportingfraud/online.htm

(I used it for procamerashop)

 

[Blank_Canvas]

It's not "questionable"; it's 100% illegal and you know it. If you want to save money, I suggest you should consider stealing one. It works out much cheaper, and it's just as legal.

What utter nonsense and advocating someone to 'steal something' (joke or non-joke) whilst pontificating it's legal is a completely idiotic proposition !


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[Dave *]

What utter nonsense and advocating someone to 'steal something' (joke or non-joke) whilst pontificating it's legal is a completely idiotic proposition !


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I think you misunderstand the post, what he is saying is it is illegal to smuggle goods into the UK from companies like Panamoz, and if you are happy enough breaking the law in that way you may as well steal one as it is also breaking the law and even cheaper than smuggling.

 

[Blank_Canvas]

Granted, but isn't this thread going around in circles ? Don't the likes of Digital Rev who are one do the main sponsors of 'Talk Photography' and Panamoz pay the UK import tax ?




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[NeilA1975]

I think you misunderstand the post, what he is saying is it is illegal to smuggle goods into the UK from companies like Panamoz, and if you are happy enough breaking the law in that way you may as well steal one as it is also breaking the law and even cheaper than smuggling.

Well actually if you buy from Panamoz, you are not breaking the law, since you are buying the goods delivered duty paid as per the purchasing terms. Panamoz are the ones breaking the law if they mis declare goods intentionally and they would be the ones liable for any outstanding costs.

 

[NeilA1975]

Granted, but isn't this thread going around in circles ? Don't the likes of Digital Rev who are one do the main sponsors of 'Talk Photography' and Panamoz pay the UK import tax ?




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Panamoz sell delivered duty paid, digital rev sell delivered duty unpaid (onus is on the end customer).
This is clearly stated in their terms.

 

[madmardle]

So after 65 replies, are HDEW a reputable company who pay all neccesary taxes, duties & VAT etc., and if I do decide to buy from them am I perfectly legal. They do say that they offer a three year guarantee.
Although fortunately I didn't need Nikon's extended guarantee on my D90 and the coolpix model bought for my granddaughter, I had a whole lot of trouble getting Homeserve ( I think that is the name of the company Nikon use for repairs) to acknowledge my purchases in writing, but perhaps had I had a problem it would have been sorted, although its a bit worrying when you can't get anything in writing.

 

[NeilA1975]

So after 65 replies, are HDEW a reputable company who pay all neccesary taxes, duties & VAT etc., and if I do decide to buy from them am I perfectly legal. They do say that they offer a three year guarantee.
Although fortunately I didn't need Nikon's extended guarantee on my D90 and the coolpix model bought for my granddaughter, I had a whole lot of trouble getting Homeserve ( I think that is the name of the company Nikon use for repairs) to acknowledge my purchases in writing, but perhaps had I had a problem it would have been sorted, although its a bit worrying when you can't get anything in writing.

They look ok to me. Uk registered company. Doesn't refer anywhere re import duties or taxes in their t&c's whereas both Panamoz and digital rev do. Pick the phone up and ask them where the stock comes from - is it ex uk stock or is it xe foreign stock outside eu? If ex uk then that's fine - if foreign ask them who pays import taxes.

 

[NeilA1975]

So after 65 replies, are HDEW a reputable company who pay all neccesary taxes, duties & VAT etc., and if I do decide to buy from them am I perfectly legal. They do say that they offer a three year guarantee.
Although fortunately I didn't need Nikon's extended guarantee on my D90 and the coolpix model bought for my granddaughter, I had a whole lot of trouble getting Homeserve ( I think that is the name of the company Nikon use for repairs) to acknowledge my purchases in writing, but perhaps had I had a problem it would have been sorted, although its a bit worrying when you can't get anything in writing.

....and yes, to buy from them is 100% legal as is Panamoz and digital rev.

 

[Blank_Canvas]

Panamoz sell delivered duty paid, digital rev sell delivered duty unpaid (onus is on the end customer).
This is clearly stated in their terms.

I don't disagree with you, I have read their website. It's all the others on here taking the morale high ground that need convincing!

Digital Rev are also one of our major sponsors of this forum.


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[Dave *]

Well actually if you buy from Panamoz, you are not breaking the law, since you are buying the goods delivered duty paid as per the purchasing terms. Panamoz are the ones breaking the law if they mis declare goods intentionally and they would be the ones liable for any outstanding costs.

No you aren't, the importer is legally responsible for the payment of any required duty or tax. Just because the sender in a foreign country makes a false statement doesn't absolve the importer in the UK of his legal requirements.

There is an old saying, ignorance is no defence to breaking the law.

None of the Hong Kong sellers pays UK tax and vat on importation, Digital Rev have a website promise to refund them to the importer if you are charged on import.

They look ok to me. Uk registered company. Doesn't refer anywhere re import duties or taxes in their t&c's whereas both Panamoz and digital rev do.

You are correct here, HDEW import their own grey stock and have a UK shop that sells the goods, they will be responsible for the duty and tax as they are the importer.

They will also supply a VAT receipt if you ask them to. Buying from HDEW is still grey stock, but are UK legal for your HMRC requirements.

 

[NeilA1975]

No you aren't, the importer is legally responsible for the payment of any required duty or tax. Just because the sender in a foreign country makes a false statement doesn't absolve the importer in the UK of his legal requirements.

Yes, correct, but you made the mistake of assuming the importer is the customer. This would be incorrect in the example of Panamoz (or anyone selling DDP) since their selling terms are delivered duty paid. Effectively Panamoz are the importer, not the end customer. However, as it appears Panamoz are not UK registered, I cannot see how they can sell DDP unless they have an agent acting on their behalf (they have a UK number, who is it?) who submit customs entries before final delivery. In which case, if they're pulling a fast one, the incoterm becomes irrelevant and you may be liable for the import costs.

 

[Dave *]

Yes, correct, but you made the mistake of assuming the importer is the customer. This would be incorrect in the example of Panamoz (or anyone selling DDP) since their selling terms are delivered duty paid.

No mistake, basically Panamoz tell lies to catch gullible buyers, they pay no vat or duty and they also make false customs declarations in a bid to circumvent detection by HMRC.

Effectively Panamoz are the importer, not the end customer.

No, not right, the UK buyer is the importer.

However, as it appears Panamoz are not UK registered, I cannot see how they can sell DDP unless they have an agent acting on their behalf (they have a UK number, who is it?) who submit customs entries before final delivery. In which case, if they're pulling a fast one, the incoterm becomes irrelevant and you may be liable for the import costs.

Panamoz are in Hong Kong, the "UK number" is merely a VOIP call forward number to HK, their address (if they still have it) is just a virtual office and mail forwarder.

 

[NeilA1975]

No, not right, the UK buyer is the importer.

Sorry you're wrong (and right....it depends on the terms of sale). The importer is the party responsible for clearing the goods through customs, and in the case of DDP, it would be the seller or normally the sellers overseas agent/office.

 

[Dave *]

Sorry you're wrong. The importer is the party responsible for clearing the goods through customs, and in the case of DDP, it would be the seller or normally the sellers overseas agent.

I'm not going to google the links for you, but I suggest you ring HMRC and ask them. The number is 03002003700.

None of the Hong Kong grey importers of cameras operate a duty paid scheme.

The importer is the buyer in the UK, Panamoz do not pay duty or tax and rely on the false declaration to avoid HMRC. To add, receiving a parcel with a false customs declaration and not notifying HMRC is also an offence for the receiver, (as well as the evasion of tax and duty).

 

[NeilA1975]

I'm not going to google the links for you, but I suggest you ring HMRC and ask them. None of the Hong Kong grey importers of cameras operate a duty paid scheme.

Apart from HDEW.

The importer is the buyer in the UK

As I've already told you, that is dependent on the selling terms. You need to understand this.
Of course, I know this since it's my job and has been for over 20 years.

 

[Matt]

sticky updated. the thread is locked so send me a PM if you think something could be added or is incorrect.

 

[Dave *]

Apart from HDEW.

HDEW are not a Hong Kong retailer.

As I've already told you, that is dependent on the selling terms. You need to understand this.
Of course, I know this since it's my job and has been for over 20 years.

The terms offered or made by a Hong Kong retailer do not supersede the law, the retailer in Hong Kong can make any statement they like, they can promise the world, but if the law is broken on the UK side the only person who HMRC will go after is the UK receiver (who in these cases is the legal importer).