Buying and Selling models to/from Europe

[Talltim]

39 minutes ago, Colin_McLeod said:

 

Does this apply to private sales

 e.g.  an individual selling a surplus locomotive on e bay?

I believe that eBay has built the functionality in so individual sellers don’t have to do it. 

"Changes to VAT treatment of imports into the UK

From 1 January 2021, the UK will introduce a new model for imports to ensure goods from outside of the UK are treated in the same way as goods already in the UK.

The changes at a glance

The current VAT exemption for imports of goods in small consignment of a value of up to £15 into the UK will be abolished.

eBay will collect and remit VAT on consignments up to a value of £135 imported into the UK and sold to consumers.

In cases where the seller is a non-UK business and the goods are already in the UK, eBay will collect and remit VAT for supplies of goods sold to consumers within the UK.

[Mike Harvey]

I know we are all concerned about this from a UK perspective, but the UK is just a test run for the same chaos being applied across the whole of the EU from July 2021. If I read this correctly the rules apply to transactions within the EU.

 

https://www.pwc.ch/en/insights/tax/new-ecommerce-eu-vat-rules-july-2021.html

Edited January 5, 2021 by Mike Harvey
Spelling

[Colin_McLeod]

8 hours ago, Talltim said:

I believe that eBay has built the functionality in so individual sellers don’t have to do it. 

 

 

The seller may not have to register, but as a private individual, not a business, selling a model train no VAT is payable. Does the e bay system allow for that?

 

If Larry from Liverpool buys a Hornby loco from Hattons for £100 plus VAT at 20%, he pays Hattons £120 and they forward the £20 to government.

 

A year later Larry decides he no longer wants this loco and sells it for £50 to Billy in Birmingham. Billy pays Larry £50 and that's that. No VAT.

 

But what if Larry lived in Limerick instead of Liverpool. Billy should still only have to pay £50; not £50 plus 20% VAT.

[njee20]

1 hour ago, Mike Harvey said:

I know we are all concerned about this from a UK perspective, but the UK is just a test run for the same chaos being applied across the whole of the EU from July 2021. If I read this correctly the rules apply to transactions within the EU.

 

https://www.pwc.ch/en/insights/tax/new-ecommerce-eu-vat-rules-july-2021.html

Ironically that might help. Right now it’s easy to ostracise the UK because we’re being awkward. If it’s a mess everywhere then you may as well include the UK again! More likely to be mutiny if everything suddenly soars in price or access is suddenly restricted. 

[Bernard Lamb]

9 hours ago, ColinK said:

I’ve got a small parcel of modelling bits ordered from a small German supplier and paid for. It hasn’t reach me as DHL stopped delivering from Germany to UK and its gone back to the supplier.

 

I’ve also ordered some small components from Shapeways which I think come from the Netherlands. My next project is stuck until they arrive.

 

Frustrating.

DHL had two problems. The change in regulations and covid. With transport delays and staff shortages as well as the change they shut up shop for a while. A packet was accepted for posting yesterday that was refused on the 29th  so it looks as though things are moving again.

SWMBO finds it all rather nostalgic, with controls and restrictions and form filling in it is just like being back in the GDR. Except that in those days there were ways round the rules.  

Bernard

[Enterprisingwestern]

 

Does anyone want christmas/birthday/easter/whitsuntide/barmitzvah/pancake day/bonfire night/thanksgiving etc etc presents sending in from the EU?

I'm open for business, for a small handling fee of course!

 

Mike.

[LimboBrit]

I wonder how Rails of Sheffield are going to deal with my pre-order for a Bachmann 94xx PT. Release has been delayed several times last year. The amount they would have been charging to my credit card included UK VAT @ 20%. I'm assuming they will now need to deduct 20% UK VAT and charge 21% for NL BTW (VAT).

 

As I understand it this whole mess goes beyond cross-border shopping. If my family in the UK want to send a Christmas/birthday gift to a family member here in NL above a value of 45 Euros we will need to pay 2.5% duty + the relevant percentage VAT + presumably fees to the carrier for dealing with it. I really hope I'm wrong.

[Kylestrome]

For everyone who's fed up with all the doom and gloom here's a positive post-brexit story to brighten your day:

https://www.suffolkgazette.com/business/uk-banana-plantation-selling-bendy-fruit-after-brexit/

 

[LimboBrit]

7 minutes ago, Kylestrome said:

For everyone who's fed up with all the doom and gloom here's a positive post-brexit story to brighten your day:

https://www.suffolkgazette.com/business/uk-banana-plantation-selling-bendy-fruit-after-brexit/

 

Don't mention Bre***. I mentioned it once but I think I got away with it.

[AlyP]

2 hours ago, Mike Harvey said:

I know we are all concerned about this from a UK perspective, but the UK is just a test run for the same chaos being applied across the whole of the EU from July 2021. If I read this correctly the rules apply to transactions within the EU.

 

https://www.pwc.ch/en/insights/tax/new-ecommerce-eu-vat-rules-july-2021.html

The EU has been talking about doing this for years and preparing for it, and all the the Member States agreed (including the UK at the time). It resolves problems with disparities between different countries VAT rates, mollifies certain States who thought they were getting the raw end of the deal in not getting their own VAT, and simplifies VAT registration to a single one, the One Stop Shop. Configuring websites for pricing depending on country of destination will be "fun". 

 

As far as non-EU suppliers, such as UK ones, are concerned, if they decide to ignore it on shipments worth less than €150 then the customer will still have to pay VAT to the appropriate Customs administration but probably a handling fee as well.

 

Any EU supplier who decides to ignore the new rules on sales to other EU countries will come unstuck on their next tax audit.

[justin1985]

17 hours ago, spamcan61 said:

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.

 

But the fact that many goods will no longer be available, because many specialist things simply aren't available in the UK, is itself a long term net loss to the UK.

 

Model trains and bike parts might be seen as trivial by many people, but this obviously includes all kinds of other specialist bits and pieces and widgets, which in the long term will make it harder for small businesses, makers, innovators, entrepreneurs, to make new things themselves and keep innovation going. There is a big reason that historically Britain was such a big advocate of "free trade" - the more freely stuff moves, in the long term, it creates a multiplier effect and fosters growth.

 

This change was clearly brought in with the mindset that "goods will now be bought in the UK", but that only really favours existing established VAT registered businesses, presumably only serving sectors and markets where they see a big enough existing market for whatever imported goods - but it will stifle tomorrow's growth. Again, in economic terms, protectionism rarely benefits anyone in the long term. 

 

When I first heard this issue would be coming up I looked into EU based parcel forwarding / consolidation services. This looked like the most promising:

 

https://www.mailboxde.com

 

This kind of service ironically seems much more popular in the opposite direction (or at least did last year) - plenty of services allowing online shoppers to get all their UK or US online shopping delivered to a PO Box type address, then forwarded on to the EU in a single parcel. I've actually had eBay buyers from Ireland use these services to get their deliveries from me. MailboxDE seems one of very few working from the EU shipping out, but presumably this might be a sector that will grow - and this might be the only way to get things from one man band type suppliers in Germany etc. 

 

However when I emailed them in December, their angle was basically again "waiting for clarity":

 

Quote

Thank you for your email. The changes for the UK import will impact our services and it will take some time till we will set up those new rules into our system.

We will do our best to provide transport from 1.1.2021 with those taxations.

 

Based on my information this impact is mainly for sellers, not for forwarding business. Unfortunately, we need more time to make the research with our lawyer so I can not tell you how it will work after 31.12.2020.

Thank you for your understanding.

 

Justin

[rue_d_etropal]

I wonder if the problem is not VAT or oher local taxes which get dropped for exports, but thewhole concept of Duty Free. I remember back to old days of Purchase Tax, but only just.

Why should the country receiving goods get any of the tax on those items. It would be a lot simpler if tax was just charged and paid in country of origin. But then bureacrats never like simple solutions,and there are plenty of non productive companies who wil be making money out of this(I used to work in IT and  finance, so know how they think!!)

Countries always want more exports and less imports, and if one effect of this new way of handling tax is that less is exported then that is going to be bad for some countries.

Reminds me of a story I heard about a new government form for applying for business grants. It was siimple to fill in, and actualy worked. Surprise surprise it was scrapped! The person who had come up with this new application form, then resigned as he did not want to work in a world of idiots!

[D9020 Nimbus]

Perhaps the change will lead to a revival of specialist UK importers, many of which have closed in recent times, e.g. Winco, Model Masters, Model Junction, …

 

It's not that long ago that buying models from overseas shops was rare, EU or not.

[Jonboy]

2 hours ago, rue_d_etropal said:

I wonder if the problem is not VAT or oher local taxes which get dropped for exports, but thewhole concept of Duty Free. I remember back to old days of Purchase Tax, but only just.

Why should the country receiving goods get any of the tax on those items. It would be a lot simpler if tax was just charged and paid in country of origin. But then bureacrats never like simple solutions,and there are plenty of non productive companies who wil be making money out of this(I used to work in IT and  finance, so know how they think!!)

Countries always want more exports and less imports, and if one effect of this new way of handling tax is that less is exported then that is going to be bad for some countries.

Reminds me of a story I heard about a new government form for applying for business grants. It was siimple to fill in, and actualy worked. Surprise surprise it was scrapped! The person who had come up with this new application form, then resigned as he did not want to work in a world of idiots!

I agree......It would be much simpler if we just had 55% flat rate of tax on income and got rid of all these different taxes  

[spamcan61]

2 hours ago, rue_d_etropal said:

Why should the country receiving goods get any of the tax on those items. It would be a lot simpler if tax was just charged and paid in country of origin.

Presumably because the circular flow of income requires extra money that the Government 'gives' to people (let's say via a tax cut) to spend on shiny shiny actually generates  sales revenue (hence money back to the Government) in that country, rather than being spent overseas where that revenue is effectively lost.

[LimboBrit]

2 hours ago, Jonboy said:

I agree......It would be much simpler if we just had 55% flat rate of tax on income and got rid of all these different taxes  

Haha. The Dutch government prefer to do both

[Ravenser]

11 hours ago, LimboBrit said:

I wonder how Rails of Sheffield are going to deal with my pre-order for a Bachmann 94xx PT. Release has been delayed several times last year. The amount they would have been charging to my credit card included UK VAT @ 20%. I'm assuming they will now need to deduct 20% UK VAT and charge 21% for NL BTW (VAT).

 

As I understand it this whole mess goes beyond cross-border shopping. If my family in the UK want to send a Christmas/birthday gift to a family member here in NL above a value of 45 Euros we will need to pay 2.5% duty + the relevant percentage VAT + presumably fees to the carrier for dealing with it. I really hope I'm wrong.

 

There should be no duty to pay since a zero tariff deal has been agreed. VAT might be an issue.

 

Rails should be perfectly familiar with selling at ex VAT prices , since the same has applied for years to sales to Australia and the USA. Australian shops have always been hopelessly uncompetitive on British outline as a result - how can you compete with a tax free UK price when you have to pay import duty + GST on your stock...

 

[LimboBrit]

16 minutes ago, Ravenser said:

There should be no duty to pay since a zero tariff deal has been agreed. VAT might be an issue.

That is my understanding but only because the loco costs less than 150 Euros

[maico]

23 hours ago, Andy Hayter said:

So just how does that break EU rules.

Any package coming into the Eu is subject to import duty if its value is above 150€ and will be subject to local VAT.

The only thing that has changed is the the UK now falls into the group of countries that this rule applies to.

 

The Netherlands cannot impose it's own import tariff rates on different goods.. They are the same throughout the EU single market. If it's zero on wigits it's zero everywhere in the EU.
The rate must also be the same for imports from other third countries except those that have specific trade deals in place with the EU like Japan, the UK, and others. It is a breach of the WTO Most-favoured-nation rules to have different rates for different countries unless a valid reason for punative tariffs is in place.

[RJS1977]

9 hours ago, justin1985 said:

 

There is a big reason that historically Britain was such a big advocate of "free trade" - the more freely stuff moves, in the long term, it creates a multiplier effect and fosters growth.

 

 

However historically Britain's trade (primarily with the Empire/Commonwealth) was to import items to the UK (cotton, tea, coffee, rubber, etc) that we didn't have access to in this country, and export items such as railway locomotives, cars, ships, machinery, etc to those countries that didn't have the facilities to make those items themselves.

 

In 1973, we abandoned that model of trading in favour of trading with countries who made the same things we did, only often better and cheaper. So whilst it made it easier for British Leyland to sell cars to Germany, it also made it easier for VW to sell cars to the UK... guess who won! Good news for consumers, not such good news for British Leyland's workforce, nor that of the supply chain parts businesses, or British Steel, or the NCB (who provided coal to British Steel), or for the shops etc that those workers spent their money in.....

[maico]

12 hours ago, Colin_McLeod said:

 

The seller may not have to register, but as a private individual, not a business, selling a model train no VAT is payable. Does the e bay system allow for that?

 

If Larry from Liverpool buys a Hornby loco from Hattons for £100 plus VAT at 20%, he pays Hattons £120 and they forward the £20 to government.

 

A year later Larry decides he no longer wants this loco and sells it for £50 to Billy in Birmingham. Billy pays Larry £50 and that's that. No VAT.

 

But what if Larry lived in Limerick instead of Liverpool. Billy should still only have to pay £50; not £50 plus 20% VAT.

 

A business selling used in the UK typically uses the margin scheme. There is no VAT shown on the invoice. The vendor pays VAT to HMRC based on the difference between their buying in and selling price.

Rails of Sheffield are different. I bought a used item from their Ebay store and the invoice showed VAT had been levied at 20% and would be reclaimable for a VAT registered purchaser.
I expect this is to simplify their books. Take a part exchange at £50 and then list it on eBay at £100 and pay HMRC the full 20%.

As for Billy's Irish purchase, I'm not sure. Are eBay going to manage this through their Luxembourg tax-haven?

 

[Andy Hayter]

1 hour ago, maico said:

 

The Netherlands cannot impose it's own import tariff rates on different goods.. They are the same throughout the EU single market. If it's zero on wigits it's zero everywhere in the EU.
The rate must also be the same for imports from other third countries except those that have specific trade deals in place with the EU like Japan, the UK, and others. It is a breach of the WTO Most-favoured-nation rules to have different rates for different countries unless a valid reason for punative tariffs is in place.

 

I think you misunderstand and it is probably because we are very lax with the use of the word duty.

 

There is a zero tariff (duty) for the commercial import of goods which are classified as toys of the sort we use as model railways.

 

There is a duty payable for goods imported privately into the EU with a value of more than €150.  It is the same in the Netherlands as it is in Cyprus but it should not be confused with the zero tariff for commercial imports of model railway equipment.  

 

This duty on private imports is applicable for almost all goods except for alcoholic beverages and Tabaco where separate rules and limits apply.    So cameras are treated the same as a model locomotive.  

[phil-b259]

10 minutes ago, Andy Hayter said:

 

I think you misunderstand and it is probably because we are very lax with the use of the word duty.

 

There is a zero tariff (duty) for the commercial import of goods which are classified as toys of the sort we use as model railways.

 

There is a duty payable for goods imported privately into the EU with a value of more than €150.  It is the same in the Netherlands as it is in Cyprus but it should not be confused with the zero tariff for commercial imports of model railway equipment.  

 

This duty on private imports is applicable for almost all goods except for alcoholic beverages and Tabaco where separate rules and limits apply.    So cameras are treated the same as a model locomotive.  

 

So if someone living in the Netherlands buys an item from a shop in the UK and pays for delivery to the Netherlands as part of that transaction, I presume it counts as a commercial import and (providing the total price of the goods is less than 150 euros) then the buyer only has to pay Dutch VAT to receive the item.

 

But if someone living in the Netherlands goes and buys a loco off a friend living in the UK then it is presumably classed as a private import and as such they can expect to pay customs duty on the import as well as VAT before it can be released to them.

 

(Note if the transaction is done via a 'marketplace' - i.e. e-bay then I understand it then becomes a commercial transaction)

[andyman7]

14 hours ago, Colin_McLeod said:

 

The seller may not have to register, but as a private individual, not a business, selling a model train no VAT is payable. Does the e bay system allow for that?

 

If Larry from Liverpool buys a Hornby loco from Hattons for £100 plus VAT at 20%, he pays Hattons £120 and they forward the £20 to government.

 

A year later Larry decides he no longer wants this loco and sells it for £50 to Billy in Birmingham. Billy pays Larry £50 and that's that. No VAT.

 

But what if Larry lived in Limerick instead of Liverpool. Billy should still only have to pay £50; not £50 plus 20% VAT.

If Larry sells to Billy direct then VAT wouldn't be levied (well, as long as the customs form is completed in a suitable way). But if Larry uses ebay then the transaction is considered to be between ebay and Billy and as it is coming from abroad then VAT is levied. This is different to a domestic sale but no different to the way non-EU sales have been dealt with for many years, albeit with an exemption for goods below £15 which has now been scrapped.

[Andy Hayter]

7 minutes ago, phil-b259 said:

 

So if someone living in the Netherlands buys an item from a shop in the UK and pays for delivery to the Netherlands as part of that transaction, I presume it counts as a commercial import and (providing the total price of the goods is less than 150 euros) then the buyer only has to pay Dutch VAT to receive the item.

 

But if someone living in the Netherlands goes and buys a loco off a friend living in the UK then it is presumably classed as a private import and as such they can expect to pay customs duty on the import as well as VAT before it can be released to them.

 

(Note if the transaction is done via a 'marketplace' - i.e. e-bay then I understand it then becomes a commercial transaction)

All those cases are private sales since the buyer is a (private) individual and not a commercial business.