Buying and Selling models to/from Europe

[Kylestrome]

I'll be interested to see what happens with my Accurascale Class 37, when it gets delivered to Germany, which was ordered and paid for in 2020. Accurascale is an Irish company but I suspect the loco will be distributed from the UK.

 

David

[justin1985]

32 minutes ago, MikeB said:

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. 

 

But one big question is how many retailers will bother? @SM42 suggested Modellbahnshop Lippe are working on this, which is great news, but I fear many more retailers, and especially cottage industry makers of etches and bits, will either remain ignorant of this, or simply, like William Shatner, refuse to sell to the UK at all to avoid the hassle (as @njee20 mentioned having noticed with bike part retailers).

 

Registering with UK HMRC is quite an obstacle in itself, especially as there doesn't even seem to be any advertised minimum turnover etc for this to apply, as well as the separate stage of accounting for export sales free of local VAT, which as someone else pointed out is not something many retailers are used to doing (unless, like Hattons, etc., they're well acquainted with selling to the US or Australia etc.)

 

32 minutes ago, MikeB said:

 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.

 

The big problem that seems in danger of being forgotten here, though, is that carriers will apparently no longer be involved in collecting the UK import VAT for orders under £135 - the new system supposedly depends on all and any retailers around the globe registering for a UK VAT account with HMRC and charging the UK VAT for all orders up to this value.

 

Frankly this seems like spectacularly badly drafted legislation - it supposes the location of any online transaction to be the location of the buyer, not that of the seller - which seems pretty much unenforceable and legally dubious. In the best tradition of governments trying to single handedly "regulate the internet" through domestic laws. Perhaps we'll end up with a "Great Firewall" to block all online shops not registered with HMRC?

 

On 03/01/2021 at 12:27, creweboy said:

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.

 

As I understand it, the £135 figure relates to the value at which Import Duty (as opposed to Import VAT) becomes due - i.e. carriers should henceforth only be involved in collecting fees on shipments that could qualify for Duty AND VAT. The £15 allowance no longer applies - import VAT applies to ALL imported parcels now. 

 

Of course, no mention is made of what happens to non-compliant parcels (i.e. customs declaration with a value but a value under £135) but which haven't had the VAT pre-paid. Presumably they could be liable to be returned to sender, but I can only imagine carriers will allow a period of grace and continue to collect the VAT as before - won't they? (and if they do, for how long?) otherwise that's an awful lot of return postage to be handled through the system ... 

 

1 hour ago, SM42 said:

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.

 

I'm still struggling to get my head around the Import Duty side of it, but as @Andy Hayter said tariffs seem to be entirely separate and relate to commercial transactions. The VAT side, though, is a clear impact of leaving the single market, and totally separate from any tariff-based trade deal, short of joining the single market.

 

Justin

Edited January 4, 2021 by justin1985

[LimboBrit]

I realise that this thread is about buying models from the EU but there is uncertainty for me too, resident in the Netherlands, buying British models and shipping from the UK. What I see on the web site of the Dutch government is that they are still studying the agreement and that the published info can change at any moment. As it stands any shipment from the UK with a value higher than 150 Euros is liable to import duty and Dutch VAT. So much for tariff free trade. What the tariffs are for railway modelling goods I am yet to find out. For toys import duty lies between 0 and 4.7% and is applied to the total cost of goods, shipping and insurance.

 

Having said all that, it would seem that if I am traveling by car to the UK with the family, I could stock up at a model shop and on return to NL sail through customs and not need to pay anything on goods less than 300 Euros per person (1200 Euros). I fail to see the logic of all this. Maybe more time is needed for the dust to settle.

[CFL]

35 minutes ago, spamcan61 said:

Yes, user "CFL" seemed to be labouring under that misapprehension 

I hang my head in shame and plead guilty. I wasn't aware that the european VAT had been taken off the selling price and replaced with a UK VAT at the time of import.

There again if I order something costly from the UK will the UK VAT of 20% be deducted and I pay the Luxembourgish 17% VAT? Purely hypothetical as I already bought the DCC control unit from the UK, everything else comes from Germany and is most often used so VAT paid.

[LimboBrit]

12 minutes ago, AlyP said:

If it is a private seller, then existing procedure applies (so VAT and the Royal Mail handling fee). Nasty.

Indeed. A right royal P.I.T.A.

[justin1985]

2 minutes ago, CFL said:

I wasn't aware that the european VAT had been taken off the selling price and replaced with a UK VAT at the time of import.

 

I think the point is that it legally COULD be - but whether any or many retailers will be sufficiently set-up to do so is a different question!

 

2 minutes ago, CFL said:

There again if I order something costly from the UK will the UK VAT of 20% be deducted and I pay the Luxembourgish 17% VAT? Purely hypothetical as I already bought the DCC control unit from the UK, everything else comes from Germany and is most often used so VAT paid.

 

Again, a retailer could now deduct the UK VAT from an order from an EU country, if they are organised enough to do so.

 

I don't believe any other country in the world has tried to be so draconian as the UK in attempting to force retailers outside of their jurisdiction to collect their taxes for them, so I don't think your UK retailer would be expected to collect the Luxembourgish VAT. They'd simply deduct the UK VAT (hopefully) and attach a full customs declaration. Your local carrier would then process this declaration and invoice you for any applicable local VAT (and Duty?) before delivery.

 

(This is how it used to work in the UK for receiving parcels from China, the US or Australia etc. - but now only over £135 - everything else must now be pre-paid)

[maico]

3 hours 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.

 

There is no VAT on food or animal feed in the UK unless food is consumed in a restaurant

 

 

Edited January 4, 2021 by maico

[maico]

On 03/01/2021 at 12:48, Miserable said:

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.

 

A small vendor will just put a CN22 customs declaration on the parcel and stick it in the post like they do shipping to places like the US.

Edited January 4, 2021 by maico

[AlyP]

On 03/01/2021 at 12:48, Miserable said:

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.

 

Australia and Norway already had similar systems. I suspect larger firms have stopped selling to private customers in the UK for the moment because their software needs to be amended to cope - this is not something that can be done with the flick of a switch, and the details of the new rules have only just been announced.

[Dagworth]

37 minutes ago, maico said:

 

There is no VAT on food or animal feed in the UK unless food is consumed in a restaurant

 

 

There is on some foods. Jaffa cakes had a huge court case over it. 

https://www.gov.uk/guidance/food-products-and-vat-notice-70114

Andi

Edited January 4, 2021 by Dagworth

[Dagworth]

https://www.bbc.co.uk/news/business-55530721

[justin1985]

15 minutes ago, maico said:

 

A small vendor will just put a CN22 customs declaration on the parcel and stick it in the post like they do shipping to places like the US.

 

Except the new regulations don't allow for that when sending into the UK :

 

Quote

Consignments valued at £135 or less

The seller must charge and account for VAT at the point of sale, unless the consignment is a business to business sale and the customer has given them their UK VAT registration number.

To charge and account for VAT the seller will need to:

know the precise nature of the goods to find out the correct rate of VAT to charge

register for VAT - sellers that are already registered for VAT do not need to re-register

keep records of the goods sold, and make sure they get accurate information to apply the correct VAT treatment to them

For goods supplied into Northern Ireland from outside the UK and EU, low value consignment relief will no longer apply and the seller will be liable to account for the VAT on the VAT return instead of at the border.

 

(my bold). This explicitly relates BOTH to things sold through an "Online Marketplace" (eBay, Amazon, etc.) which will handle the VAT for the seller, AND anything sold to a UK consumer NOT using an online marketplace.

 

https://www.gov.uk/guidance/vat-and-overseas-goods-sold-directly-to-customers-in-the-uk

[maico]

1 minute ago, AlyP said:

 

Australia and Norway already had similar systems. I suspect larger firms have stopped selling to private customers in the UK for the moment because their software needs to be amended to cope - this is not something that can be done with the flick of a switch, and the details of the new rules have only just been announced.

 

Correct. When I have bought tools from large Dutch or German internet vendors in the past, the sites have shown prices with local VAT. If I typed in my VAT no. it would be checked automatically with the EU VIES VAT number validation service and the sale made without any VAT being levied.

When I've left my US proxy server on they have shown prices without VAT, the correct export price for non-EU sales.

I'm sure the software will be updated for UK sales being charged 20% VAT.

[Nick C]

Luckily in our case we don't need to worry too much about the import taxes, as model trains are zero-rated. So it's just the VAT issue. And going by @Dagworth's link, we don't need to worry about that either, as no-one will want to sell to us!

[TTDB]

It’s also not worth the small purchases now as the fees the carriers charge for admin are truly extortion ok vat is vat and although this isn’t Europe it will be a taste of things to come, the government ban high interest pay day loans etc so how legal can this be in regard to fees against value of goods 

[maico]

1 hour ago, LimboBrit said:

I realise that this thread is about buying models from the EU but there is uncertainty for me too, resident in the Netherlands, buying British models and shipping from the UK. What I see on the web site of the Dutch government is that they are still studying the agreement and that the published info can change at any moment. As it stands any shipment from the UK with a value higher than 150 Euros is liable to import duty and Dutch VAT. So much for tariff free trade. What the tariffs are for railway modelling goods I am yet to find out. For toys import duty lies between 0 and 4.7% and is applied to the total cost of goods, shipping and insurance.

 

Having said all that, it would seem that if I am traveling by car to the UK with the family, I could stock up at a model shop and on return to NL sail through customs and not need to pay anything on goods less than 300 Euros per person (1200 Euros). I fail to see the logic of all this. Maybe more time is needed for the dust to settle.

 

As part of the single market, I don't see how the Dutch can unilaterally charge import duties without being in breach of EU rules.

Edited January 4, 2021 by maico

[Miserable]

Just now, AlyP said:

 

Australia and Norway already had similar systems. I suspect larger firms have stopped selling to private customers in the UK for the moment because their software needs to be amended to cope - this is not something that can be done with the flick of a switch, and the details of the new rules have only just been announced.

It's nothing to do with software - it's being charged to register to collect taxes for another government, and potentially being punished if you get it wrong when you really have no reason to take the extra work on. As Shatner posted, his accountants added up the cost of setting this up and running it and concluded that makes trading with the UK unviable. I used to sell vehicle parts globally, including Australia. If any country had told me I had to collect their taxes I would told them where to go. The now famous Dutch cycle shop sells to 159 countries, non of whom makes them collect third country taxes - I kind of think they know what they are on about. Australia tries this, but in limited circumstances, the GST rule only applies to items under AU$1,000 - above that you have to appoint an Australian resident tax agent. They did this to bodge to plug a tax hole they had created. I can't see how they can enforce it, since if you don't pay to register they have no idea who you are.

[Ravenser]

3 hours ago, SM42 said:

 

 

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

 

 

HMRC will convert your landed value to sterling and charge your card in sterling for duty/VAT. They set the rates monthly, so fluctuations between the date of order ROE and  ROE when VAT is payable should be a matter of pence

 

5% of 20% of total value should not be very much

[maico]

11 minutes ago, Miserable said:

It's nothing to do with software - it's being charged to register to collect taxes for another government, and potentially being punished if you get it wrong when you really have no reason to take the extra work on. As Shatner posted, his accountants added up the cost of setting this up and running it and concluded that makes trading with the UK unviable. I used to sell vehicle parts globally, including Australia. If any country had told me I had to collect their taxes I would told them where to go. The now famous Dutch cycle shop sells to 159 countries, non of whom makes them collect third country taxes - I kind of think they know what they are on about. Australia tries this, but in limited circumstances, the GST rule only applies to items under AU$1,000 - above that you have to appoint an Australian resident tax agent. They did this to bodge to plug a tax hole they had created. I can't see how they can enforce it, since if you don't pay to register they have no idea who you are.

 

Some of the Dutch bike part store arguments are weak. What the other 200 countries in the world are doing is not relevant. There are not going to be 200 x 200 euro registration fees pa required just the one.

Chain reaction cycles based in the UK are the largest parts supplier in the World. The Dutch shop will fall in line if they want to be a significant player in the UK market. If not not, fine there are lots of smaller UK vendors after business.

 

[Miserable]

6 minutes ago, maico said:

The Dutch shop will fall in line if they want to be a significant player in the UK market. If not not, fine there are lots of smaller UK vendors after business.

They've quite clearly stated they are no longer interested in the UK market, because it's simply not worth it, as have BeerOnWeb (Belgium), Shatner's business and the three cycle shops mentioned in a previous post. That will be the UK's loss, since presumably people order from the EU to get things they cannot get here, or significantly cheaper enough to warrant shipping cost.

[SM42]

1 hour ago, Ravenser said:

 

 

HMRC will convert your landed value to sterling and charge your card in sterling for duty/VAT. They set the rates monthly, so fluctuations between the date of order ROE and  ROE when VAT is payable should be a matter of pence

 

5% of 20% of total value should not be very much

Ok

 

As an example, using simple if a little unlikely numbers,  if someone could answer this, so I might get my head round it

 

If I buy a product from the EU and the total cost is €195, my credit card rate is £1 = €1.50. 

The sterling cost is £130

HMRC have set their rate at £1=€1.20 ( not that I know this at the time)

The sterling cost is now £162.50

 

Now as far as I'm concerned I am below the £135 limit. HMRC think otherwise

 

How much would I have to pay extra using HMRC's exchange rate compared to my credit card rate?

 

Andy

[spamcan61]

1 hour ago, Miserable said:

They've quite clearly stated they are no longer interested in the UK market, because it's simply not worth it, as have BeerOnWeb (Belgium), Shatner's business and the three cycle shops mentioned in a previous post. That will be the UK's loss, since presumably people order from the EU to get things they cannot get here, or significantly cheaper enough to warrant shipping cost.

I don't see this as a UK loss as the goods will either be bought in the UK now or not at all. I'm not for one minute suggesting this change is a good idea but that's presumably the logic behind it.

[AY Mod]

A few days ago I saw that Artitec have adopted a similar position https://www.artitecshop.com/en/blogs/nieuws/tripping-over-red-tape/ (not blaming them!).

 

They point us toward the UK stockists but they have far from the full range.

[AlyP]

9 minutes ago, SM42 said:

Ok

 

As an example, using simple if a little unlikely numbers,  if someone could answer this, so I might get my head round it

 

If I buy a product from the EU and the total cost is €195, my credit card rate is £1 = €1.50. 

The sterling cost is £130

HMRC have set their rate at £1=€1.20 ( not that I know this at the time)

The sterling cost is now £162.50

 

Now as far as I'm concerned I am below the £135 limit. HMRC think otherwise

 

How much would I have to pay extra using HMRC's exchange rate compared to my credit card rate?

 

Andy

Andy

 

You'd pay an additional £6.50 PLUS the £8 Royal Mail handling charge. The law, and HMRC, pay no heed to what your card rate is.

[Fat Controller]

2 hours ago, Dagworth said:

There is on some foods. Jaffa cakes had a huge court case over it. 

https://www.gov.uk/guidance/food-products-and-vat-notice-70114

Andi

From personal experience in the business, there are a lot of foods that are classed as being liable to VAT. Have a look at your supermarket till receipt, and see how many items have an asterix against them. Some of the logic beggars belief; Andi has mentioned the Jaffa Cake case, which revolved around whether they were cakes or biscuits; however, a chocolate digestive is classed as VAT-able, but if you put the chocolate between two biscuits (i.e. a Bourbon), then it's VAT-exempt. Likewise, potato crisps are VAT-able, but some snack products, made from extruded corn, for example, are not.

As Glenda Slag used to say 'You couldn't make it up'