Antipodean Modellers and Looming tax changes

[Johnfromoz]

This thread is aimed mainly at Australian buyers like myself, who until now have been able to purchase from the UK VAT free and with generally no import duty payable. After many threats to do so in recent years, the Australian Government is bringing in a half baked attempt to charge GST on such purchased from 1 July this year. This scheme is predicated on forcing overseas sellers with Australian sales turnover of $75k + to collect duty on behalf of Australia.

 

I am curious as to how the big boys in UK hobby retail such as Hattons, Rails etc will respond to this? Surely they meet the threshold. No heard any discussion of this on the forum yet. I must confess to have brought forward some planned purchases from later in the year as a precaution.

 

Any views from others who purchase most of their supplies from this hobby from overseas?

[34theletterbetweenB&D]

Non-enforceable. Just set up trading addresses to the required number to stay below threshold, Perhaps the smaller UK mail order retailers will drum up some extra trade by promoting pre-booking of our GST(Oz) free allowance for the tax year?

[Johnfromoz]

As I understand it , it will be made enforceable via international reciprocal tax treaties. What remains to be seen is the Australian government's resolve to take action for non-compliance. Cant see the UK giant businesses such as H. cooking the books to avoid this.

 

Possible a case of watch this space.

[21C123]

The New Zealand government is planning something similar.

 

Currently any parcel where duty plus GST are under $60 it is let through, over that you get charged duty, GST on the value AND the duty, then GST on the postage. On top of that is a $49.24 service fee.

 

So for a $275 parcel with $20 postage you get charged $60 duty and GST then fee , total $110

 

For a $274 parcel plus $20 you get charged nothing.

 

I don’t mind paying the GST or the duty, it’s the $49 service fee I object to.

 

Hopefully with the new system this won’t happen as the overseas retailer will do the collection. Of course they may decide to add a fee themselves.

 

I , and I’m sure the NZ government ,will be watching the Australian system to see what happens.

 

Roger

[DougN]

Well this has been a topic I have discussed with a number of modellers. Either way and if the poor post office contractors feel like it they may apply the GST... I don't think there will be a duty... it will be still be cheaper and more reliable than trying to get things locally.

 

For example I have seen locos I have purchased well under $160 going for $370 here... so even with a 10% on top it is still a lot cheaper!

[Johnfromoz]

Absolutely agreed Doug, it will still be cheaper to buy overseas. I am more intrigued about how our government will coerce overseas companies to collect tax. Already Amazon have responded by blocking Oz access to their US site (not that I buy anything from them)

[The Johnster]

Sadly, I think that it is unlikely that the relatively small market for UK models in Oz and NZ figures much in the calculations of the likes of Hornby or Bachmann, the main players, but the smaller fish, like the box shifter commissioners or even Dapol/Heljan, may well feel the need to take it into account.  Are there any main dealers out there? 

[Johnfromoz]

Refer Post # 1. We are discussing large retailers collecting Australian tax.

[34theletterbetweenB&D]

As I understand it , it will be made enforceable via international reciprocal tax treaties...

 It will cost more to enforce than it will ever yield on what I would guess is just a few million of annual trade in such goods. (Employment opportunities in government service, it won't cover their direct employment cost, let alone their pensions.) and I can quite imagine retailers refusing the order rather than accept a yet further charge on their time acting as a revenue collector.

 

This type of thinking is a dinosaur in what is increasingly a global trading village. But then again the orange crested Donaldosaur may just drag us back to a different future...

[Johnfromoz]

Agreed, but they are pressing ahead with it. May have a big element of bluff though.......Deafening silence from the retailers suggests to me they are waiting for our government to make the first move.

[Gwiwer]

This is one of many Australian government revenue-raising ploys wrapped up as protecting Australian jobs and businesses.

 

In our hobby it will not matter that the likes of Auscision and Austrains allegedly produce trains locally (they don’t - they use Chinese factories) even l if I want a British class 47 or A4 not an Australian 442 or G-class because a model train is a model train. If it is purchased from the UK it may be liable to these new charges; if bought wihin Australia it is already subject to GST and a share of the importer’s charges.

 

I suspect this wll be unenforceable across the board but applid almost randomly to some incoming items.

 

Is there any legally binding enactment which forces British retailers to disclose to Australian authorities the value of their business - as distinct from the retail value of a single parcel? This will do nothing to benefit Australian modellers of non-Australian themes as the required products are not widely available within Australia and often not at all.

 

What it risks doing is alienating a sizeable chunk of the population who then react in what ever manner they see fit. It’s not just little trains. It is everything purchased outside and imported via mail into Australia. I suspect somewhere between 25-50% of the population do that at times. That’s potentially a lot of rebellion.

 

And that’s all. I don’t wish to fall foul of the no-politics rule.

[Johnfromoz]

As to enforceability, possible use of existing tax treaties has been mentioned, but even if the government DO enforce this tax collection, the buyer can avoid by using a smaller operator for purchases. As for model railways, the days of huge box shifter discounts are gone anyway, so this restriction of choice may not be such a big issue for us modellers

[Dunsignalling]

This is one of many Australian government revenue-raising ploys wrapped up as protecting Australian jobs and businesses.

 

In our hobby it will not matter that the likes of Auscision and Austrains allegedly produce trains locally (they don’t - they use Chinese factories) even l if I want a British class 47 or A4 not an Australian 442 or G-class because a model train is a model train. If it is purchased from the UK it may be liable to these new charges; if bought wihin Australia it is already subject to GST and a share of the importer’s charges.

 

I suspect this wll be unenforceable across the board but applid almost randomly to some incoming items.

 

Is there any legally binding enactment which forces British retailers to disclose to Australian authorities the value of their business - as distinct from the retail value of a single parcel? This will do nothing to benefit Australian modellers of non-Australian themes as the required products are not widely available within Australia and often not at all.

 

What it risks doing is alienating a sizeable chunk of the population who then react in what ever manner they see fit. It’s not just little trains. It is everything purchased outside and imported via mail into Australia. I suspect somewhere between 25-50% of the population do that at times. That’s potentially a lot of rebellion.

 

And that’s all. I don’t wish to fall foul of the no-politics rule.

Stuff coming into the UK from the USA (where I occasionally sourced items a few years back) generally carried a "Customs Declaration"; a short description of contents/approximate value to be listed on the label. Anything not so labelled tended to get opened for inspection/valuation causing a 10 to 14 day delay in transit.

 

My mother used to work for a firm exporting UK consumer items to expats all over the world and the procedure seems to have been similar in the other direction.

 

I imagine this is how the Australian authorities will enforce compliance.

 

The declarations usually ensured quick passage for lower value items (CDs in my case, and each consignment was small enough not to attract any additional attention).

 

I understand from a friend that things are a bit tighter these days and that he suffers a "service charge" from Parcelforce of about a tenner a go (a bit better than Aus $49). The alleged service being them advising him, incorrectly, that they have attempted to deliver it (they won't have because his packages have import duty/VAT "to Pay" and Parcelforce drivers don't collect such payments, so he has to go to their depot).

 

I presume that, with drugs, security and anti-terrorism to the fore nowadays, packages are subjected to scanning and random searches, too.

 

John

Edited June 19, 2018 by Dunsignalling

[Johnfromoz]

Update just posted on Hattons website....

 

They are INDEED levying the GST from 1 July.

 

So much for all the huffing about it being unenforceable............

[Gwiwer]

Update just posted on Hattons website....

 

They are INDEED levying the GST from 1 July.

 

So much for all the huffing about it being unenforceable............

 

Given that Hattons (and indeed any others retailer) do not keep the amounts collected then I hope they back-bill the Australian Tax Office for their role as de facto tax collectors offshore.  Otherwise Aussie is getting something for nothing and the customer ends up paying.  

[kevinlms]

Sadly, I think that it is unlikely that the relatively small market for UK models in Oz and NZ figures much in the calculations of the likes of Hornby or Bachmann, the main players, but the smaller fish, like the box shifter commissioners or even Dapol/Heljan, may well feel the need to take it into account.  Are there any main dealers out there? 

Not so sure about that. I remember hearing years ago, that a significant percentage of Peco's products ended up overseas. How they knew that, when a large proportion has always gone through various UK retailers, rather than the Australian importers.

[YesTor]

Here might be your answer...  http://www.hattons.co.uk/NewsDetail.aspx?id=313

Edited June 18, 2018 by YesTor

[brianusa]

It is surprising that the US has still not imposed such taxes from foreign countries and in this trumpestuous era there are no tariffs on importing model trains from abroad!

 

Brian.

[St Enodoc]

Update just posted on Hattons website....

 

They are INDEED levying the GST from 1 July.

 

So much for all the huffing about it being unenforceable............

 

Here might be your answer...  http://www.hattons.co.uk/NewsDetail.aspx?id=313

I'm actually quite relieved to see this. My main concern was that Hattons, and others, would simply cease supplying to Australia. Availability, not price, is the issue as far as I am concerned.

[Johnfromoz]

I'm actually quite relieved to see this. My main concern was that Hattons, and others, would simply cease supplying to Australia. Availability, not price, is the issue as far as I am concerned.

Totally disagree.

 

In this modern world, everything can be had for a price. At the end of the day, with global on line trading just about everything is 'available'. My priority is to pursue my (generally expensive) hobby at the best price possible.

[DougN]

We all have to remember that the value has to be $75,000AUD before the trigger for export into Australia. 

 

Another interesting comment I heard years ago from Simon Kohler was Australia was the second biggest market for Hornby (from their internal sales figures) what he did not realise was how much is exported via Hattons Et al. As all the gathered modellers stated they all bought from various retailers. 

 

I can see this all ending very badly. I can not see how the ATO can know what a particular business is exporting into Australia from another country...is this another cost for the business? are we going to see the other companies having to do a ATO return each year? Its got hairs on it and liable for dishonesty. I can see some less than scrupulous companies saying "sorry we are imposing the 10% Australia tax" and not either being liable for it & taking the money and not remitting it back to the ATO. so again the Australian population loses out on more money as the goverment will now have to prosecute the companies. We all know how bad they are at prosecuting a business here let alone over seas.... 

 

Now back to the models.... Yes I will still be ordering from overseas but it might restrict the purchases more. 

Edited June 19, 2018 by DougN

[St Enodoc]

Totally disagree.

 

In this modern world, everything can be had for a price. At the end of the day, with global on line trading just about everything is 'available'. My priority is to pursue my (generally expensive) hobby at the best price possible.

John, we will have to agree to disagree. Much "global on line trading" takes place through large or medium-sized organisations that will be subject to the new rules. Amazon US has already pulled the plug on supplying to Australia. Others may well do likewise. As a generalisation, I'm happy to pay 10% more to assure the ongoing availability of what I want to buy.

[monkeysarefun]

I'm actually quite relieved to see this. My main concern was that Hattons, and others, would simply cease supplying to Australia. Availability, not price, is the issue as far as I am concerned.

 

Me too.  I'm not against paying the extra 10% if only to stop Gerry Harvey always popping up on  my TV and having a cry. What I'm concerned about is that suppliers will do an Amazon and just stop shipping to Australia.

 

Australia Post currently have a reship service from the US which I already use for US suppliers that won't ship to Oz. I'm assuming that things purchased overseas and sent via this method won't attract GST since to the original supplier I am a US buyer? Or will customs be on the alert for incoming packages coming from reshippers and hitting themwith the GST  on arrival here? Sure is a messy situation for not much apparent benefit..

Edited June 19, 2018 by monkeysarefun

[davefromacrossthepond]

It is surprising that the US has still not imposed such taxes from foreign countries and in this trumpestuous era there are no tariffs on importing model trains from abroad!

 

Brian.

Don't cheer yet. I heard there's some serious studying going on so that Hornby's next GWR steam engine can be a national security threat. Of course since they are manufactured in China.....

[Dunsignalling]

Given that Hattons (and indeed any others retailer) do not keep the amounts collected then I hope they back-bill the Australian Tax Office for their role as de facto tax collectors offshore.  Otherwise Aussie is getting something for nothing and the customer ends up paying.  

They don't back-bill HMRC for collecting VAT, and the customer ends up paying...…

 

I imagine their Aussie counterparts will be trying to make compliance for the likes of Hatton's (and their customers) as seamless as possible. The idea is presumably to generate revenue, not put a stop to the trade.

 

Those in Australia purchasing their model railway goods from the UK have long been in the enviable position of not paying tax in either country.

 

Welcome to the real world?

 

John

Edited June 19, 2018 by Dunsignalling