Buying and Selling models to/from Europe

[irishmail]

It is all very confusing!  

https://www.rte.ie/news/brexit/2021/0105/1187897-retail-brexit/

 

[AlyP]

There appears to be some confusion over various matters.

 

To summarise, assuming the import is into the UK:

 

1 All imports of goods are subject to Customs Duty and VAT. The chargeable rates applicable vary according to what the goods are.

 

This is the case whether the import is purchased from a business or a private individual, or received as a gift.

 

2 Model railways are classified under Commodity Code 9503003000 :  ‘Electric trains, including tracks, signals and other accessories therefor; reduced-size (scale) model assembly kits.’. Customs Duty is at 0% (the same for imports into the EU) and VAT is due at 20%.

 

3 The value on which the VAT is chargeable is the landed price, being the purchase price plus the cost of shipping to the UK.

 

4 A gift package, containing 1 or more items, with a total landed value of £39 or less is free of Customs Duty and VAT. Any gift package worth more than £39 is subject to Customs Duty and VAT as appropriate. A handling fee will doubtless be charged by the carrier.

 

5 The previous Low Value Consignment Relief for goods valued £15 or less has been abolished

 

Example 1:  Buying directly from a non-UK business, landed value of total consignment £135 or less.

 

Non-UK business should be registered for UK VAT and charge it. It should show its VAT number on the Customs declaration on the package, and Royal Mail or the carrier should just deliver it with no handling fee. If the non-UK supplier does not declare a valid UK VAT number, the VAT charge will be assessed, the carrier will normally require payment of the VAT charge before delivery, and will charge a handling fee.

 

Example 2:  Buying from a non-UK business via an Online Marketplace (OMP), such as eBay, landed value of total consignment £135 or less.

 

The OMP will charge and account for UK VAT.

 

Example 3:  Buying from a non-UK business, landed value more than £135.

 

The VAT charge will be assessed, the carrier will normally require payment of the VAT charge before delivery, and will charge a handling fee.

 

Example 4:  Buying from a non-UK private individual, of any value.

 

The VAT charge will be assessed, the carrier will normally require payment of the VAT charge before delivery, and will charge a handling fee.

 

 

Low value items bought from a non-UK business that has not registered for VAT, or from a non-UK private individual, will still suffer the usual Royal Mail sting for £8. Any modeller buying low value items from the US already knows the pain of that.

 

Second-hand goods sold UK to UK:  A business seller can choose to use a VAT margin scheme, but is not obliged to do so.

 

Alistair

 

 

[Philou]

@AlyP As you seem to have the finger on the pulse, can I ask if it will be similar, but for UK to EU goods? I ask as I, and a good few others on RMWeb, live now in the EU.

 

Cheers,

 

Philip

[AlyP]

6 minutes ago, Philou said:

@AlyP As you seem to have the finger on the pulse, can I ask if it will be similar, but for UK to EU goods? I ask as I, and a good few others on RMWeb, live now in the EU.

 

Cheers,

 

Philip

Philip

 

I assume the current rules are now that imports from the UK would be treated the same as they are for imports from, say, Switzerland or the US - you'd be assessed for VAT on the parcel, and have to pay it and any handling fee before delivery.

 

For the rules from 1st July for a sale by a UK business to an EU customer see https://www.pwc.ch/en/insights/tax/new-ecommerce-eu-vat-rules-july-2021.html

and search the page for 'Brexit' - the rules seem much the same, except the limit is €150, not £135.

 

Alistair

[Kylestrome]

Well, I’ve just had my first experience of post-brexit trading with the UK.

 

On December 28 I bought a pannier tank for 147,19 Euros from a shop on eBay but it wasn’t sent until January 5. I’ve just received it and had to pay an extra 21,17 Euros at the door. Although I specified Royal Mail International tracked postage it came by DHL Express so whether the extra cost has anything to do with that, I don’t know. Unfortunately, I couldn’t get much information from the DHL driver because his German was somewhat minimal.

 

Make of that what you will.

 

David

 

 

Edited January 6, 2021 by Kylestrome

[Philou]

Hmm .... just had a look at the PwC résumé (linked above). It would seem that the threshold of €150 equates to the £135 mentioned elsewhere. It may well be too much hassle for very small suppliers to register, particularly if they are near the lower VAT limit.

 

I'm not sure how it is going to affect UK-EU sales in the end, as model railways seem to be in an exempted class (for now) for additional Duty (have I that right?) and just subject to VAT rules. As I've never imported items from 'the rest of the world' (save one <€22/£15 item from China), I've never experienced VAT/duty payments on imports.

 

Ho hum - we shall see.

 

I would hope that Accurascale will be able to use their Irish address to ease the situation as in their instance it will be EU-EU, new VAT rules notwithstanding.

 

Cheers,

 

Philip

[LimboBrit]

1 hour ago, AlyP said:

There appears to be some confusion over various matters.

 

To summarise, assuming the import is into the UK:

 

1 All imports of goods are subject to Customs Duty and VAT. The chargeable rates applicable vary according to what the goods are.

 

This is the case whether the import is purchased from a business or a private individual, or received as a gift.

 

2 Model railways are classified under Commodity Code 9503003000 :  ‘Electric trains, including tracks, signals and other accessories therefor; reduced-size (scale) model assembly kits.’. Customs Duty is at 0% (the same for imports into the EU) and VAT is due at 20%.

 

3 The value on which the VAT is chargeable is the landed price, being the purchase price plus the cost of shipping to the UK.

 

4 A gift package, containing 1 or more items, with a total landed value of £39 or less is free of Customs Duty and VAT. Any gift package worth more than £39 is subject to Customs Duty and VAT as appropriate. A handling fee will doubtless be charged by the carrier.

 

5 The previous Low Value Consignment Relief for goods valued £15 or less has been abolished

 

Example 1:  Buying directly from a non-UK business, landed value of total consignment £135 or less.

 

Non-UK business should be registered for UK VAT and charge it. It should show its VAT number on the Customs declaration on the package, and Royal Mail or the carrier should just deliver it with no handling fee. If the non-UK supplier does not declare a valid UK VAT number, the VAT charge will be assessed, the carrier will normally require payment of the VAT charge before delivery, and will charge a handling fee.

 

Example 2:  Buying from a non-UK business via an Online Marketplace (OMP), such as eBay, landed value of total consignment £135 or less.

 

The OMP will charge and account for UK VAT.

 

Example 3:  Buying from a non-UK business, landed value more than £135.

 

The VAT charge will be assessed, the carrier will normally require payment of the VAT charge before delivery, and will charge a handling fee.

 

Example 4:  Buying from a non-UK private individual, of any value.

 

The VAT charge will be assessed, the carrier will normally require payment of the VAT charge before delivery, and will charge a handling fee.

 

 

Low value items bought from a non-UK business that has not registered for VAT, or from a non-UK private individual, will still suffer the usual Royal Mail sting for £8. Any modeller buying low value items from the US already knows the pain of that.

 

Second-hand goods sold UK to UK:  A business seller can choose to use a VAT margin scheme, but is not obliged to do so.

 

Alistair

 

 

Thankyou AlyP....a good summary and in line with how I understood it. Nice to have it confirmed. As you say, the greatest financial pain percentage wise is going to be when purchasing low value goods from a non VAT registered supplier. So much so that it is probably not even worth considering.

[Andy Hayter]

1 hour ago, Philou said:

Hmm .... just had a look at the PwC résumé (linked above). It would seem that the threshold of €150 equates to the £135 mentioned elsewhere. It may well be too much hassle for very small suppliers to register, particularly if they are near the lower VAT limit.

 

I'm not sure how it is going to affect UK-EU sales in the end, as model railways seem to be in an exempted class (for now) for additional Duty (have I that right?) and just subject to VAT rules.

 

Cheers,

 

Philip

Sadly no Philip.

 

As I tried to explain above, Hornby, Bachmann, Maerklin etc. can import from China import duty free since the tariff for model railways is zero.  That however is for commercial (business to business) transactions.  For private purchases (you or me buying from a UK model shop) duty will become applicable if the landed value (cost plus transport plus insurance plus handling) is above €150.  The €150 limit applies to all goods (fags and booze excepted) irrespective of what their commercial import tariff may be.  

[AlyP]

12 minutes ago, Andy Hayter said:

Sadly no Philip.

 

As I tried to explain above, Hornby, Bachmann, Maerklin etc. can import from China import duty free since the tariff for model railways is zero.  That however is for commercial (business to business) transactions.  For private purchases (you or me buying from a UK model shop) duty will become applicable if the landed value (cost plus transport plus insurance plus handling) is above €150.  The €150 limit applies to all goods (fags and booze excepted) irrespective of what their commercial import tariff may be.  

If I may clarify:

 

Customs Duty is 0% on any import of model railways, whether or not it is a commercial transaction. It applies equally to business to business, business to consumer, and private to private, transactions.

 

Customs Duty does not vary according to the type of transaction, but is based solely on what the goods are, and for certain types of goods, where they came from and/or their origin of manufacture.

 

 

[Stuart A]

2 hours ago, Kylestrome said:

Well, I’ve just had my first experience of post-brexit trading with the UK.

 

On December 28 I bought a pannier tank for 147,19 Euros from a shop on eBay but it wasn’t sent until January 5. I’ve just received it and had to pay an extra 21,17 Euros at the door. Although I specified Royal Mail International tracked postage it came by DHL Express so whether the extra cost has anything to do with that, I don’t know. Unfortunately, I couldn’t get much information from the DHL driver because his German was somewhat minimal.

 

Make of that what you will.

 

David

 

 

My understanding is that any transaction that occurred before 23:00 on 31/1/20 should have been sent as normal, with no further fees to be paid.

Unless this seller had already started selling without charging any sort of VAT?  (but by my calculation that should have amounted to 23.55 euros based on 16%)

[Kylestrome]

1 minute ago, Stuart A said:

My understanding is that any transaction that occurred before 23:00 on 31/1/20 should have been sent as normal, with no further fees to be paid.

 

That was what I was hoping. However, The shop sent it in January by DHL Express which has probably put a spanner in the works.

 

There is also the question of returns. If I wanted to return this item (not that I'm going to), I will have paid the extra fee with, presumably, no chance of a refund.

 

This will probably be the last item I'll be ordering from the UK for a while.

 

David

[LimboBrit]

I think for larger purchases and when I'm not in a hurry I'll just have everything shipped to my sister in the UK and pick it up when I'm visiting. I've already asked her to set up a home warehouse.

[Jonboy]

I am going through fun and games at the moment with transactions that went through in the last couple of days before work closed for Xmas break....the carriers wouldn’t collect them due to the ports closure then, and now won’t take them unless the documents are correct for the post brexit processes....

 

 

[LimboBrit]

8 minutes ago, Jonboy said:

I am going through fun and games at the moment with transactions that went through in the last couple of days before work closed for Xmas break....the carriers wouldn’t collect them due to the ports closure then, and now won’t take them unless the documents are correct for the post brexit processes....

 

 

I sympathise. I’d be interested to hear how you get on. I had Hattons ship my trunk on 18th November. It still hasn’t arrived and wonder, if it hasn’t been lost, which side of the English Channel it’s located. 

[irishmail]

This is part of the text from the RTE news article that i posted earlier.   The text I have highlighted in bold appears confusing, as an example I buy a Hornby or Bachmann loco from Hatton's  a UK retailer, however the loco is made in China so not UK origin?  So much for free trade agreement. 

 

 

"Since Brexit took effect on 1 January, new rules have been implemented that will see VAT and Excise Duty being applied to many transactions.

Purchases under €22 will not face additional charges, but anything over €22 will see the addition of an Irish VAT charge.

Goods valued at more than €150 will also be subject to customs duty. The amount to be charged will vary depending on the nature of the item.

Consumers are also being warned that only goods bought from the UK that are of UK origin will avoid tariffs under the Free Trade Agreement in place.

So, if goods sourced outside the EU are being sold by a British seller to an Irish consumer, tariffs and other charges can be applied."

 

https://www.rte.ie/news/brexit/2021/0105/1187897-retail-brexit/

[AlyP]

1 minute ago, irishmail said:

This is part of the text from the RTE news article that i posted earlier.   The text I have highlighted in bold appears confusing, as an example I buy a Hornby or Bachmann loco from Hatton's  a UK retailer, however the loco is made in China so not UK origin?  So much for free trade agreement. 

 

 

"Since Brexit took effect on 1 January, new rules have been implemented that will see VAT and Excise Duty being applied to many transactions.

Purchases under €22 will not face additional charges, but anything over €22 will see the addition of an Irish VAT charge.

Goods valued at more than €150 will also be subject to customs duty. The amount to be charged will vary depending on the nature of the item.

Consumers are also being warned that only goods bought from the UK that are of UK origin will avoid tariffs under the Free Trade Agreement in place.

So, if goods sourced outside the EU are being sold by a British seller to an Irish consumer, tariffs and other charges can be applied."

 

https://www.rte.ie/news/brexit/2021/0105/1187897-retail-brexit/

As model railways are subject to a 0% rate of Customs Duty in the EU, as in the UK, not a problem.

[LimboBrit]

6 minutes ago, irishmail said:

Consumers are also being warned that only goods bought from the UK that are of UK origin will avoid tariffs under the Free Trade Agreement in place.

What is the definition of “origin”? Where they’re shipped from? Where they were made? Presumably models entering the UK from China will already have the applicable duties paid

Edited January 6, 2021 by LimboBrit
Addendum

[AlyP]

1 minute ago, LimboBrit said:

What is the definition of “origin”? Where they’re shipped from? Where they were made?

Where they were made. So from 1/1/21 anything manufactured, grown, or fished, in the EU is tariff-free into the UK, and vice-versa. Subject to the Rules of Origin set out in 114 pages of the the FTA.

[Talltim]

Look at the reduction in red tape...

[Pacific231G]

For some reason the phrase "I told you so" keeps on creeping into my mind.

 

I'm wondering what happens, once the pandemic is under control, we are once agan able to invite European modellers to bring their layouts to our exhibitions or get invited to exhibit our layouts in Europe. Will we or they have to fill in carnets listing every item involved or will it, as I fear, just become so difficult that nobody does it any more and our hobby becomes ever more parochial. 

This isn't a theoretical difficulty. I've helped to exhibit at least six layouts at shows in France, I know others who've exhibited at the Utrecht and Sedan shows, and ExpoNG in particular has always benefitted from a number of layouts from France, Belgium and the Netherlands. 

[Ron Ron Ron]

All very much a pain in the a***, but if I could play devil's advocate for a moment, unless I've missed something, there's something positive to come out of this.

 

For UK customers buying from a country in the EU, whereas before, the VAT was paid at the source of purchase and went to that state's government; now the VAT goes to the UK government.

i.e. if buying from a German model shop, the VAT doesn't go to the German government, but goes to the UK treasury, to be spent to the benefit of UK citizens....and boy won't we need every penny, no matter how small, due to the economic effects of the virus. 

 

As for the trade agreement, it isn't the end of the story by any means.

The agreement sets out that there will have to be a number of further negotiations to sort out a whole load of detailed issues and to establish new arrangements in certain areas, to smooth out the flow of trade.

With a bit of luck, cross border consumer purchases could be streamlined in due course, to mirror or align more closely with the new internal market, cross border VAT regime.

 

 

.

[andania 213]

1 hour ago, Ron Ron Ron said:

 

For UK customers buying from a country in the EU, whereas before, the VAT was paid at the source of purchase and went to that state's government; now the VAT goes to the UK government.

i.

 

Thinking through this then, reciprocally, if someone in Belgium / Holland / Germany etc. buys something from the UK, the VAT they'll pay will, from 1/1/21 onwards, presumably be paid in their own respective country, not the UK,  to be spent on their own respective citizens.

So, unless us Brits buy tons more stuff from the EU, than they do from us, I can't see how we'd gaining much  ( AlyP will no doubt correct this if wrong).  

 

It would be nice to think that further thought be brought to bear on the trade agreement, and that things reverted to nearer the way they where, but that will depend, I suppose, on enough folk being sufficiently unhappy with the way it is now.

 

K

 

 

[Jonboy]

Something to bear in mind is that there were thresholds in place before for distance selling to each EU country. This meant if a uk supplier sold EUR 100,000 to German consumers (note consumers not VAT registered businesses) they would need to register for VAT in Germany and make sales at the German VAT rate, paid to Germany.

 

In theory all this is does is lower the threshold across the board, and move the consumption tax that is VAT to the place is it being consumed...the excuse is that technology should make it easier to manage the complexity...

[EmporiaSub]

5 hours ago, Pacific231G said:

For some reason the phrase "I told you so" keeps on creeping into my mind.

 

I'm wondering what happens, once the pandemic is under control, we are once agan able to invite European modellers to bring their layouts to our exhibitions or get invited to exhibit our layouts in Europe. Will we or they have to fill in carnets listing every item involved or will it, as I fear, just become so difficult that nobody does it any more and our hobby becomes ever more parochial. 

This isn't a theoretical difficulty. I've helped to exhibit at least six layouts at shows in France, I know others who've exhibited at the Utrecht and Sedan shows, and ExpoNG in particular has always benefitted from a number of layouts from France, Belgium and the Netherlands. 

I think something similar happens when Canadian Modellers exhibiting go south to the USA?

[maico]

Trivia 101: Most of the custom duties raised on items entering EU countries from outside are handed over to the EU budget. So, in 2018 imports totalled 1,979 billion euros. 25 billion in customs duty was collected and 20 billion paid into the EU budget. This was 13% of total EU revenue however it works out at only circa 1.26% of the total value of imports into the EU.

 

I don't know how much custom duty will be raised by the UK Governmemt in 2021 but it's only going to be a small income stream.