Vat on imported models: Cross post from French railways.

[Crosland]

7 hours ago, Nick C said:

If you're buying model trains (or parts therefor), there won't be any import duty - they're counted as toys which are zero-rated. The charge will be 20% UK VAT plus their admin fee - I suspect when you say "VAT paid at time of purchase" it may well have been Dutch VAT (assuming this is still coming rom Shapeways)

If VAT was paid at time of purchase, there is no liability for UK VAT.

 

It sounds like the sender, or UPS, have screwed up the paperwork.

[spsmiler]

When I receive the goods and invoice for the fee charged by UPS I will share more information.

 

When I mentioned the VAT limit I meant the £135 value above which the seller does not charge VAT - instead it is collected at time of import, in this case UPS.

 

I am very interested to learn more about toys being zero-rated for import duty. It could be argued that buying solely model train body shells which need much work plus more components to be made into completed products should fall in to this category.

 

edit to add:

 

model trains seem to be UK commodity codes 95 and 03

 

https://www.trade-tariff.service.gov.uk/search?q=model+train&input-autocomplete=model+train

 

Quote

Tricycles, scooters, pedal cars and similar wheeled toys; dolls' carriages; dolls; other toys; reduced-size ('scale') models and similar recreational models, working or not; puzzles of all kinds

 

I also found this:

 

Quote

Electric trains, including tracks, signals and other accessories therefor; reduced-size (scale) model assembly kits

http://www.eximguru.com/hscodes/uk/ch-95-toys-games-and.aspx

 

this web page quotes this code: 9503003000

 

 

I need to research more to find out what the exact tariffs are (in money terms)

Edited February 15, 2023 by spsmiler

[maico]

5 hours ago, Crosland said:

If VAT was paid at time of purchase, there is no liability for UK VAT.

 

It sounds like the sender, or UPS, have screwed up the paperwork.

 

Unless the vendor has a UK VAT registration number there will be UK VAT levied if the declared invoice value, including shipping, is above £135 (using the exchange rate shown on the HMRC website.)

 

The dealers I use in Germany deduct German VAT (MwSt) in the web cart for exports out of the EU single market. I've never paid VAT on any deliveries below £135. Above that value, a clearance fee of circa £11 plus 20% VAT will be due to the courier.

 

Many EU-based big box vendors have now set up country-specific websites. You will automatically be shown prices in Sterling inc.VAT and the TCC state that is the delivered price.

[Andy Hayter]

Your first link tells you - 20% VAT (for import to the UK) plus 0% import duty.

 

The codes are international.   Except where there are special national impositions* the duty rate will be the same worldwide (*for example the US falling out with France and imposing massive tariffs on for example French cheese and champagne.)  These national impositions are usually shown at the bottom of the tariff page.

 

There may be a problem however as you kind of suggest if the item is not identified as a model railway item - even if your end use is intended to be for your model railway.

 

Obvious examples might be the purchase of fine chain or brass or plastic section which will have their own codes.

 

It is possible for example that a Shapeways print might be construed as 

"Other construction sets and constructional toys -

Of plastics  VAT 20% and 4% duty - code 9503003500

[spsmiler]

I've bought from these people in Germany - mostly items that are not easy to but here in the UK - and have never been asked for any import duties.  But this might also be because I've never gone above £135 value.

 

https://www.modellbahnshop-lippe.com/

[Andy Hayter]

Let's please make sure we get our terminology right or we will get ourselves tied up in knots.

 

Model railway equipment should never attract any duty.  They do attract VAT. So please let's use VAT for VAT and duty for duty charges.

All goods should be due for VAT - which in some case may be a 0% (books in the UK for example) but will mostly be at 20% or the local national rate for other countries. 

 

Whether the VAT is charged is very much hit and miss.  If the seller uses major shippers - Ebay Global Shipping Program. DHL, UPS, etc..  You are likely to get charged because the shipping company is charged to collect the VAT due.    National postal systems seem to be less diligent in collecting VAT.  Sometimes they will.  Sometimes they miss it.  

 

And then it gets complicated because depending on where you are located, the delivery company may or may not be the one used to dispatch the goods.  I live out in the sticks and almost all parcels are delivered  by the French post office irrespective of who has picked up the parcel from the seller.  In such cases (in my experience) you are likely to get charged if the shipper was a major international logistics company.

 

I recently received a book from the UK which should have attracted 20% VAT here in France.  It was sent via the UK post office and passed to the French postal service but on delivery no VAT was requested.  Another parcel sent DHL and delivered by the French postal service did attract VAT.

 

I think I understand why there are differences but would prefer not to publish them in case it induces people to look at the issue and close the gaps.  WE might after all have someone who works for HMRC and is a member here.

 

What this all comes down to is that sometimes parcels that should attract VAT don't end up being charged to the recipient.

Edited February 16, 2023 by Andy Hayter
correction

[Nearholmer]

1 hour ago, Andy Hayter said:

Whether the VAT is charged is very much hit and miss.  If the seller uses major shippers - Ebay Global Shipping Program. DHL, UPS, etc..  You are likely to get charged because the shipping company is charged to collect the VAT due.    National postal systems seem to be less diligent in collecting VAT.  Sometimes they will.  Sometimes they miss it.  

Definitely ‘hit and miss’. I’ve just had some bicycle parts delivered from an Austrian maker, who deducted their domestic VAT from the price and warned me to expect to pay UK VAT to DHL on delivery. DHL simply delivered the package and requested no payment. On another occasion, buying something from Germany, VAT was collected by DHL, and I was surprised, because the amount was so small it can barely have been worth anyone’s bother.

 

 

Edited February 16, 2023 by Nearholmer

[spsmiler]

So the goods arrived, with invoice for what UPS wanted me to  pay.

 

The description of the contents is: "Ornamental article of plastic, O..."  The description stops as shown,  in mid-sentence,

I suspect that this is from the commodity code

 

The value is 177 EUR.

 

The charge to me comprises £32.22 Freight Import VAT and £12.20 Brokerage Charges.

There are no other charges.

 

The snag is that the items in the box came from two different purchase orders that were placed (and paid for) on different days but ended up being sent at the same time. Both purchase orders included VAT. In other words, I've been charged VAT twice!

 

So, I need to contact UPS and Shapeways, advise them both of the situation and and see what happens. Hopefully I will get a full refund.

 

 

[Andy Hayter]

If Shapeways have charged VAT, they should not have done - but do check that the prices you saw and were charged were not ex-VAT prices.  Your argument is with them not  UPS, who are just carrying out the rules for importation into the UK and payment to the UK exchequer.  

 

Be glad however that they did combine the orders or you would have had to pay 2 lots of brockerage charges.

[Nick C]

The Shapeways FAQ says:

 

What happens if both Shapeways and British Customs charges me for the VAT tax?
Our systems should cover these cases, but if this situation arises, please contact Shapeways customer service

 

Link

[spsmiler]

23 hours ago, Andy Hayter said:

If Shapeways have charged VAT, they should not have done - but do check that the prices you saw and were charged were not ex-VAT prices.  Your argument is with them not  UPS, who are just carrying out the rules for importation into the UK and payment to the UK exchequer.  

 

Be glad however that they did combine the orders or you would have had to pay 2 lots of brockerage charges.

These were two separate orders made on different days, both were also below the £135 / €150 limit.

 

So  in this instance it was right that Shapeways did charge me VAT as on their own neither order would have attracted a VAT charge by UPS. 

 

Thank you @Nick C for the link

 

Even if Shapeways refund the VAT I paid them I will still be out of pocket, as an element of the VAT fee I paid to UPS will represent a VAT on VAT payment. 

 

I shall share here what happens when I contact them.

Edited February 19, 2023 by spsmiler

[Andy Hayter]

You are heavily hung up about the £135.  You have to pay VAT on the goods plus delivery irrespective of value.  The £135 simply defines how that payment is made.

[spsmiler]

3 hours ago, Andy Hayter said:

You are heavily hung up about the £135.  You have to pay VAT on the goods plus delivery irrespective of value.  The £135 simply defines how that payment is made.

 

Its a value that has been foist upon people by bureaucrats.

 

It also defines whether purchasers will be stung for Brokerage Charges by the postal / other delivery company for collecting the VAT.

 

UPS charge £12.20 - which is about the same as the the carriage charge that I paid Shapeways.

 

In the near future I plan to buy a 3 car Class 306 train and I think Ill make it one purchase as it will be cheaper than buying each coach individually and paying three sets of carriage charges

[jjb1970]

It's one of those things that is what it is. Whether it is right or wrong is pretty much irrelevant, you have to pay. If a parcel goes through with nothing added then it is a bonus, but you should always assume that you will be charged for the sales tax either at source or by the shipping company depending on value. So you should price it in, along with the shipping fee, when deciding if buying from overseas makes sense.

 

The concept of making the seller liable to pay directly up to a certain value (and subject to a certain lower sales volume threshold for registration) and for the purchaser to pay above that is not unusual, it anything it now seems to be becoming standard practice. Singapore has introduced a similar registration scheme for GST (the local equivalent of VAT). A further variation is local shop fronts for overseas sellers. Here Amazon.sg mainly sells goods sourced overseas (mainly USA and Japan) and there are websites like Shopee and Lazada which largely sell goods from China but because they're local shop fronts GST is included.

 

What I do find annoying is when the shipping company takes forever to do the customs clearance and then charges a handsome handling charge on top of the VAT. In England I had packages from the USA sat with the RM or Parcel Force customs depot for 3 or more weeks before being released according to the tracking info and then having to pay something like a £12 - 15 handling charge on top of VAT. That's annoying. Over here Singpost handling is $10 and clearance is usually within a day or two of arriving, if I pay the charge before late afternoon it is generally delivered next day. At least they expedite things.

 

If this is not acceptable then don't buy from overseas sellers. If you really want something and buying from overseas sellers is the only option then you just have to live with it.

[Andy Hayter]

Check your VAT invoices.

 

Just a heads up in case my experience is not a one off.

 

I recently bought a model from the UK that was shipped by a major shipper.  The seller kindly issued the commercial invoice in Euros.

 

When the package arrived, I of course had to pay VAT plus the shipper's fees - demanded on line before delivery.  It was a bit more that I was expecting but with no breakdown at that stage.

 

Today I have received the paper invoiced (shown as paid) from the shipper with a full breakdown of the costs.  They have recorded the commercial invoice price and they have recorded that the invoice currency is Euro.  Then for reasons that I leave for them to explain they have applied a currency conversion factor (looks like GBP -> EUR) to come to a new higher Euro value for the goods upon which they have based their VAT calculation.    I have written asking for a refund of the excess plus my expenses.

 

I will let you know how it goes but I would suggest that you check your VAT invoices to make sure errors have not crept into the calculations.   Computer systems and procedures are clearly not always as tight as we might imagine.

[spsmiler]

On 20/02/2023 at 10:38, jjb1970 said:

RM or Parcel Force customs depot for 3 or more weeks before being released according to the tracking info and then having to pay something like a £12 - 15 handling charge on top of VAT. That's annoying.

 

They claim that they are so overwhelmed with parcels that it takes three weeks for them to work through the backlog. Its happened to me several times and this was without any import duties or other taxes (or handling fees) to pay!  Why they cannot recruit enough staff to meet demand is a mystery.

 

-----------------------------------------------------

 

re: my parcel, Shapeways said that it is best to not combine orders where tax has already been paid if the total value will be above £135. OK, lesson learnt. The UPS handling fee was about the same as the Shapeways carriage fee so had I received the goods as two consignments my overall expenditure would have been about the same.

 

In the meantime I can expect a sales tax refund from Shapeways within a few working days.

 

One thing that baffles me is the financial value that UPS quoted for my goods (ie: the value they used when charging 20% sales tax). In short, it looks as if it might have been less than I think it should have been. However it could be because they quoted GBP£ and not Euros€ (the currency on the sales invoices) or even US$ (the currency Shapeways use when quoting selling prices on their website!). The word on my mind is 'obfuscate' and in this situation I am happy to not seek clarity, in case its discovered that I should have been charged more.

Edited February 22, 2023 by spsmiler

[Gridiron]

If you are purchasing goods from outside the UK, the supplier should be providing the carrier (ie UPS/DHL or Mail service etc) with a commercial invoice showing you as the buyer/purchaser of the goods along with a full description of the goods, UK ten digit commodity code, value and nett and gross weight(s) of the package(s). Any shipping and insurance costs, if they are not included in the value of the goods purchased should be added or if the costs are included the invoice should so state.

 

If the good are being shipped from the EU, the commercial invoice should be zero rated of the countries domestic rate of VAT, and if you are VAT registered you supply the supplier with your VAT number so it can be included on the commercial invoice. Most other countries outside EU should generally follow the same sort of procedure replacing any reference to VAT with their local form of taxation, ie Sales Tax etc. but this cannot be taken for granted. In the event you have an entity registered for VAT in another EU there is special scheme which changes these rules, but I suspect the most readers to this thread will be private individuals, which is detailed in the this link. 

 

Value added tax (VAT) – goods (europa.eu)

 

When the goods arrive in the UK (or in the EU) the goods have to be customs cleared and Duty, VAT or other taxes become due. It is at this point it is important to consider that you as the buyer of the goods shown on the commercial invoice are legally responsible for these costs and the accuracy of the declaration used to declare the goods even though in practice the carrier will provide this service for you. This is largely because the declaration has to be completed electronically and has to be linked to carriers inventory systems. The Carrier will make a charge for this service, a courier service or the Royal Mail will typically be about GBP12.00 in the UK  for this service but if it is a larger shipment or with a freight forwarder the costs will likely be higher. If the goods. Assuming the goods are described on the commercial invoice as model railway trains or similar and the supplier has used the correct commodity code 9503030000 they will be duty free and just subject to VAT of 20% based on the value of the goods plus the shipping charges. These rules only apply if you purchase directly from a none UK based entity, there are different rules if you purchase from a UK based entity.

 

Changes to VAT treatment of overseas goods sold to customers from 1 January 2021 - GOV.UK (www.gov.uk)

 

If you are registered for VAT you should check with the courier if they can enter the goods using Post VAT Account (PVA), and if they do then you can defer the payment and enter the VAT paid on your VAT return . 

 

 

 

 

 

 

 

[MikeB]

On 20/02/2023 at 10:38, jjb1970 said:

It's one of those things that is what it is. Whether it is right or wrong is pretty much irrelevant, you have to pay. If a parcel goes through with nothing added then it is a bonus, but you should always assume that you will be charged for the sales tax either at source or by the shipping company depending on value. So you should price it in, along with the shipping fee, when deciding if buying from overseas makes sense.

 

The concept of making the seller liable to pay directly up to a certain value (and subject to a certain lower sales volume threshold for registration) and for the purchaser to pay above that is not unusual, it anything it now seems to be becoming standard practice. Singapore has introduced a similar registration scheme for GST (the local equivalent of VAT). A further variation is local shop fronts for overseas sellers. Here Amazon.sg mainly sells goods sourced overseas (mainly USA and Japan) and there are websites like Shopee and Lazada which largely sell goods from China but because they're local shop fronts GST is included.

 

What I do find annoying is when the shipping company takes forever to do the customs clearance and then charges a handsome handling charge on top of the VAT. In England I had packages from the USA sat with the RM or Parcel Force customs depot for 3 or more weeks before being released according to the tracking info and then having to pay something like a £12 - 15 handling charge on top of VAT. That's annoying. Over here Singpost handling is $10 and clearance is usually within a day or two of arriving, if I pay the charge before late afternoon it is generally delivered next day. At least they expedite things.

 

If this is not acceptable then don't buy from overseas sellers. If you really want something and buying from overseas sellers is the only option then you just have to live with it.

I don't think you can always blame the shipping company for delays, Some have a service where they deliver directly and collect the fees based on the invoice details , but in other cases, items imported into the UK have to be processed and possibly checked by HMRC. The shipping company has no control over this, apart from showing something like "awaiting customs clearance" on the tracking.  HMRC will take as long as they take,  just like airlines have no direct influence on how long passengers  wait at security, customs or passport control at airports.

 

I recently ordered two items from Germany for delivery to the UK.  Once was sent by Fedex, and while it was in transit I had an e-mail describing the charges to be paid, which I did online, and it arrived here within a week of ordering.  I assume this is some sort of "trusted trader/shipper" arrangement.  The other was sent by DHL, and will be delivered by Parcelforce. It has been stuck in UK customs for a week.  

 

Edited February 23, 2023 by MikeB

[Andy Hayter]

And there lies the difference between end to end delivery using one company and passing the  delivery on to a local delivery company.

 

For an end to end delivery, the logistics company have a vested interest in getting the parcel through customs and doing the final delivery.  They will have agents - often experts in customs procedures - who will "walk" the package through customs.

When there is a handover of delivery responsibility.  Things will be different.  DHL have handed the package over to UK customs and their bit of the delivery is complete (or is it?)

 

You see the package as stuck in customs but we none of us know why.

Is this customs being slow when there is no pressure from the logistics companies?

Is there missing paperwork from DHL?

Is there a communications problem between DHL and Parcelforce?

Are Parcelforce being slow in picking up the package?

[Gridiron]

I regularly order from a company in Germany who send me a confirmation that order will be processed that day, and a copy of commercial invoice. The orders are usually over EUR300.00 so they qualify for free delivery which is now usually with UPS who then send me an email the same day to say they have the order and confirming the tracking number. I then login to set up the updates and by the evening  I usually have confirmation the shipment is on it's way. The next update is usually a delivery date, but then it is followed by another delaying the delivery, which then should be followed by a another email advising that a payment is due. With a bit of luck it will include the link to allow me to complete the on line payment, but if it's not there I have a direct phone number to the depot which allows me to pay the fee over the phone and obtain a payment reference. The package usually follows the same day or the following day which is a vast improvement over the three weeks it took UPS just after Brexit.

 

The UPS app and website is poor and the online customer service is a nightmare, so prior to Brexit I preferred DHL but following Brexit much depends on which DHL product is purchased, as the more expensive version is a DHL courier to door which was good, but the cheaper version means the parcel is handed over the RM for customs clearance and delivery. The problem with this is that it RM only seem to update the tracking when the parcel arrives in the local delivery depot, rather than when it's cleared at the airport of arrival, usually East Midlands. If you ring the number on the website and quote tracking number you can obtain the number required to make the online payment which saves waiting for the letter to arrive with the local postie and then a further couple of days for the delivery to actually to deliver. 

 

In comparison, my last UPS delivery  about three weeks ago was ordered over a weekend, despatched on the Monday and delivered to me by midday Tuesday. I may be lucky as the supplier is not far from Krefeld in Germany and I think UPS must fly directly to Manchester Airport as UPS inform the shipments are delivered from their new Warrington depot, which is just 20 minutes or so down at the end of the M62.

 

[spsmiler]

Its a pain that whilst UPS tell me when to expect my parcels they do not notify me when a parcel has attracted a tax fee that will be requested at the time of delivery. At least though I know its a possibility and can chase them so that I can pay with a card in advance of delivery.

 

As I was also charged VAT by UPS Shapeways have now been refunded the VAT that I paid them.

 

I need to speak with Shapeways regarding the tax code and product info they quote to UPS - I think they use a tax code for 'ornamental plastic'. Of course model trains would be better. Later this year I am intending to buy a 3D printed Class 306 train - all three coaches as one purchase - and this will definitely cost more than €150.

 

Today (Friday) I received an order from the Modellbahnshop Lippe in Germany (using FedEx) that was dispatched last Monday plus a UK domestic small package (from The Model Centre / delivered along with the letter post) that was sent 2nd Class on Wednesday. Both came on tracked services and I received emails telling me that they would arrive today.

 

btw, the Modellbahnshop Lippe purchase was below €150, they are great for buying things not always easy to obtain here in the UK. 

[admiles]

18 hours ago, Gridiron said:

 "The Carrier will make a charge for this service, a courier service or the Royal Mail will typically be about GBP12.00 in the UK  for this service but if it is a larger shipment or with a freight forwarder the costs will likely be higher"

 

Hell yes they will!! 😇

 

"If you are registered for VAT you should check with the courier if they can enter the goods using Post VAT Account (PVA), and if they do then you can defer the payment and enter the VAT paid on your VAT return".

 

PVA = Postponed VAT Accounting and only if you're registered for it

 

 

 

 

 

 

Other than that spot-on Sir!

 

Signed

A.Freight Forwarder (amongst other things)

Edited February 24, 2023 by admiles

[Gridiron]

58 minutes ago, admiles said:

 

Other than that spot-on Sir!

 

Signed

A.Freight Forwarder (amongst other things)

I deliberately highlighted that as a semi-retired freight forwarder myself knowing that somebody would kick off if they got a bill for more..😀

 

[cessna152towser]

I submitted a bid today on eBay.co.uk from my home location here in Scotland for some second hand Hornby Railroad wagons from a business seller whose location is shown as in England.    eBay's e-mail acknowledgement of my bid shows "Current bid: £12.00: 20% VAT will apply".

Is this a standard wording nowadays as I can't recall noticing this mention of VAT previously?

Can I safely assume that since Scotland and England are still both part of the UK, that no additional VAT would be added by eBay to the final price?

[Mark Saunders]

17 hours ago, cessna152towser said:

I submitted a bid today on eBay.co.uk from my home location here in Scotland for some second hand Hornby Railroad wagons from a business seller whose location is shown as in England.    eBay's e-mail acknowledgement of my bid shows "Current bid: £12.00: 20% VAT will apply".

Is this a standard wording nowadays as I can't recall noticing this mention of VAT previously?

Can I safely assume that since Scotland and England are still both part of the UK, that no additional VAT would be added by eBay to the final price?

Is this inclusive or exclusive of VAT?