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Buying and Selling models to/from Europe


creweboy
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Don't know if anyone noticed, and this is applicable to buying from any EU country, l notice a number of ebay sellers now not delivering to the UK that previously did and more concerning is the statement that items worth over £15 you will pay vat at 20% then there is import duty for items worth over £135 on top of that. The carrier will also charge an admin fee for collecting it. 

This could soon add up if anyone bought a Roco 012 will know! 

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It's worse than that : a business selling to the UK now has to pay to register with the UK to supply to the to the UK, and that business is expected to collect taxes on behalf of the UK government. This is unique in the world. William Shatner (yes, that one) and a Dutch cycle parts supplier are two examples of businesses who have decided to simply not to sell to the UK as a result. I don't suppose they will be the only ones.

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32 minutes ago, creweboy said:

items worth over £15 you will pay vat at 20% then there is import duty for items worth over £135 on top of that.

 

How does this fit in with the published concept of no tariffs and what about a private seller (eg Me in EU) selling surplus models, which were originally purchased from the UK and UK VAT paid at the time of original purchases?

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Isn't this more to do with the fact that you can purchase VAT free in the EU for personal export and pay domestic VAT on import and the £390 limit for other goods in your duty free allowances?

 

I must admit it is a bit of a minefield with more questions than answers at the moment and advsie written in a form that can be interpreted in two ways

 

Andy

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8 minutes ago, Colin_McLeod said:

 

How does this fit in with the published concept of no tariffs and what about a private seller (eg Me in EU) selling surplus models, which were originally purchased from the UK and UK VAT paid at the time of original purchases?


Colin,

 

You will need to address questions like this to the relevant Govt department to get a definitive answer on that, unless there someone on here who actually works for HMRC.

 

steve

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9 minutes ago, Colin_McLeod said:

 

How does this fit in with the published concept of no tariffs and what about a private seller (eg Me in EU) selling surplus models, which were originally purchased from the UK and UK VAT paid at the time of original purchases?

A good question. This https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021 as far as I can tell does not take that into account.

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I’ve just looked at three German bike shops I’ve used before, all three no longer shipping to the UK. 

 

At least we’ve got blue passports though!

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16 minutes ago, steve1 said:


Colin,

 

You will need to address questions like this to the relevant Govt department to get a definitive answer on that, unless there someone on here who actually works for HMRC.

 

steve

Definitely, take a look at the public notice on receiving goods for abroad - in particular the level that duty and import VAT become payable (para 2.3)

 

https://www.gov.uk/government/publications/notice-143-a-guide-for-international-post-users

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27 minutes ago, Miserable said:

 

Thanks or the link. I was a little off course in my assumption above.

 

The question remains though as to how the £135 is arrived at.

 

For instance, which exchange rate is used and at what point in the trading day as they fluctuate minute by minute.

 

You may for instance buy in Euros with an on the day sterling value of £130 but on the  day of import the exchange rate has changed and it's now worth £140.

 

 

 

Andy

Edited by SM42
incorrect statement removed
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1 hour ago, Enterprisingwestern said:

 

Clear as mud!

 

Mike.

 

Having cast my eye ( that of a former shipping agent ) over the Govt 'document', I can only conclude the same.

 

The paragraph which I think is the most relevant to the topic seems to me at least to contradict and befuddle the information which is proffered within it :scratchhead:!!

 

Boy am I glad that I don't have to get my head around that lot for a living anymore!!

 

K

 

 

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I have read about this arbitrary 20% extra on another model railway forum (at first it was believed to be eBay but then it was found out to be the government), but I think the major worry for the UK is if the government puts this 20% on necessary items such as food, clothing and even raw materials. Going to get expensive up there.

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Hi CFL, it’s import VAT rather than a new tax. The change is to make non-U.K. retailers responsible for collecting and paying over to the government rather than the carrier collecting it off the end-user at delivery 

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22 hours ago, SM42 said:

 

Thanks or the link. I was a little off course in my assumption above.

 

The question remains though as to how the £135 is arrived at.

 

For instance, which exchange rate is used and at what point in the trading day as they fluctuate minute by minute.

 

You may for instance buy in Euros with an on the day sterling value of £130 but on the  day of import the exchange rate has changed and it's now worth £140.

 

 

 

Andy

 

 

I would expect "normal rules" to apply for import customs declarations - ie:

 

- commercial invoice value to determine landed value , and

- HMRC posted exchange rate to be used for any conversion. That ROE doesn't change daily

 

Anything imported will now require a commercial invoice attached, but that's always been the case for imports from outside the EU

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55 minutes ago, CFL said:

I have read about this arbitrary 20% extra on another model railway forum (at first it was believed to be eBay but then it was found out to be the government), but I think the major worry for the UK is if the government puts this 20% on necessary items such as food, clothing and even raw materials. Going to get expensive up there.

 

My undertsanding is that if you purchase from the EU now, then the rate of VAT charged will be UK VAT at 20%

 

However as the item is for export the domestic rate of VAT is not charged, so if you buy from ModelBahn Shop Lippe for instance , rather than pay 19% (?)  German VAT you will pay UK VAT at 20% on import.  I believe MBSL are working to non local  VAT prices for UK customers when they start selling to the UK again from  the 15th I think.

 

In theory then, if you keep below the £135 limit (per order not per item)  then you will in effect be paying 1% extra VAT ( + any collection admin fee) compared to last year, for goods sourced from Germany. However Poland for instance, I think has 23% VAT, so you could save a bit

 

The £135 limit on a consigment may be an issue, but I haven't got my head around how that squares with tarrif free trade that the government claims to have made a deal on.

 

As I said before, how that £135 is calulated when you are purchasing in anything other than Sterling could be an issue

 

If you are a personal shopper and are bringing back items yourself (whenever that may be possible) then there are the duty free limits of £390 for non excise goods. Whether that is duty paid (i.e VAT paid abroad at local rate) or not I can't make out. 

 

It is all a bit of a mess and the government's published information doesn't help much.

 

I'm not to sure which channel I would need to use at customs so probably the red one. 

 

One thing is for sure, it won't be as simple as it used to be.

 

Andy

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The VAT thing is marginally better than the 1% increase you mention.

 

This is because when the German store deducts the 19% VAT, this then becomes the basis for adding the UK 20% - but it is marginal.  AS for tariff free trade, this applies to commercial transactions and personal transactions are handled differently.

 

Just to add, exactly the same issues are applying to deliveries to the EU from UK vendors.

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1 hour ago, Ravenser said:

 

 

I would expect "normal rules" to apply for import customs declarations - ie:

 

- commercial invoice value to determine landed value , and

- HMRC posted exchange rate to be used for any conversion. That ROE doesn't change daily

 

Anything imported will now require a commercial invoice attached, but that's always been the case for imports from outside the EU

 

 

If the HMRC rate is different to your credit card provider's rate then that could make a big difference.  My credit card's conversion rate changes by the hour. OK not by much but can certainly make a noticeable difference on amounts over £100.

 

For personal  shoppers bringing items back in their luggage that can be a nightmare as the rate change over the space of a week or two can be quite marked depending on what natural disaster or political utterance has occurred.

 

For instance the Polish Zloty / Sterling rate has fluctuated something in the order of 5 - 8% in recent weeks as various EU trade deal and Cornavirus pronouncements were made.

 

Andy

Edited by SM42
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The 20% VAT is not an extra tax! We previously paid VAT at the rate applicable in whichever EU country we ordered goods from (in Germany that was 16%).

 

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3 minutes ago, MR Chuffer said:

For reference, its currently 19% in Germany, with a reduced rate of 7% for some items - but not model railways!

It only says 16% sales tax on the model I received last week!

 

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13 minutes ago, HSB said:

The 20% VAT is not an extra tax! We previously paid VAT at the rate applicable in whichever EU country we ordered goods from (in Germany that was 16%).

 

I don’t think anyone is suggesting it is are they? If, However, the majority of retailers don’t remove local VAT (being offset by the application of UK VAT) then you are effectively going to pay twice. Presently it seems that UK retailers are quite good at removing VAT for those from the US, Australia etc, this is a far more alien concept for EU retailers. 

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The basic premise is that instead of buying from Germany and paying the German VAT, the German supplier will charge the price before tax and UK VAT will be applied, either by the seller or by the carrier.  There are no duties as such within Europe, and this has always been the case when buying from Switzerland.  One issue is that while the big carriers such as DHL and UPS have their own customs clearance facilities and all payments are included in the purchase + carriage price, if Royal Mail or Parcel Force are involved the items can vanish for days or weeks while  the charges are calculated, and a £8 fee is added for the privilege,  all to be paid before delivery.

 

So this means that it's now more hassle to buy the 200 Euro loco from Germany at a discounted price of 180 Euros rather than paying £240 to the official UK distributor.

 

Other tweaks are that there is a minimum value when it's not worthwhile to charge the VAT, as mentioned earlier in the chain  and that if items were ordered and physically available before Dec 31 the old rules still apply, until the time reaches the end user.  This is in the withdrawal agreement, so if something was ordered in 2019 and came into stock in December 2020 but wasn't shipped because of the chaos at Dover, the old rules still apply, ie German VAT and no extra paperwork.

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38 minutes ago, HSB said:

It only says 16% sales tax on the model I received last week!

 

That's because the German government reduced MwSt (VAT) for several months in an effort to encourage consumer buying to counteract the effects of the pandemic. Since the 1st January, the rate has returned to the normal 19%.

 

David

Edited by Kylestrome
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As someone who dealt with this...stuff for nearly 40 years (and is thankfully retired - the last time I spoke to my old boss mention of Brexit produced inarticulate screaming, and he’s a VP of in-house tax):

 

1 EU suppliers should no longer charge their local VAT. This shouldn’t be a shock to them as they would already be doing that for shipments to Switzerland, etc.

 

2 If goods, including shipping cost, are less than £135 the non-UK business supplier should register for, and charge, UK VAT and show its VAT number on the Customs declaration. Unknown is whether Royal Mail will still sting you for a handling fee for such goods under £135. If they don’t register then existing process and Royal Mail fee applies.

 

3 Goods valued over £135 including shipping cost will continue to be processed via Royal Mail and the fee charged.

 

4 HMRC rates of exchange for imports are set monthly.

 

5 The £15 non-EU Low Value Consignment Relief is abolished  - this is to counter the Chinese supplier habit of falsely declaring shipments as valued at $1. The EU had been making noises for years about doing away with this relief in any case.

 

6 If you buy online from a non-UK business seller using a MOP (Online Marketplace) such as eBay, then eBay will charge and account for the UK VAT, not the supplier. If it is a private seller, then existing procedure applies (so VAT and the Royal Mail handling fee). Nasty.

 

7 Tariffs - goods are only tariff-free (no Customs Duty) if they meet the Rules of Origin for goods produced in the EU or UK. These are set out in 114 pages of the Trade Agreement. If the goods don’t meet the Rules of Origin, Customs Duty will be payable same as for any import from, for example, the US. At the moment there is no Customs Duty on model railways.

 

Alistair

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