IMPORTING MODELS FROM JAPAN, USA etc - VAT and DUTY - have I got this right?

[TEAMYAKIMA]

As many of you will know, I am not the brightest spark and I sometimes get things wrong when studying the T's & C's online.

 

I have just looked at the HMRC website as I am about to import something worth about £22 plus shipping from Japan.

 

As I read it, commercial goods under £135 should not attract any duty, tax or handling fee - am I right?

[SM42]

AIUI

 

There should be no duty on model railway items as they are zero rated 

 

Items under £135 should have the UK VAT paid by the seller ( there should be no local, to the seller, VAT equivalent included in the price to you, only UK VAT ) to HMRC, although I suspect it won't be (as they won't be registered to do so with HMRC) so you may have to pay it on delivery plus of course the courier's admin fee. 

 

You might get away with paying nothing though. 

 

Bear in mind the second part is where I may have got it wrong,

 

Andy

Edited June 29, 2023 by SM42

[Hal Nail]

 

 

[TEAMYAKIMA]

2 hours ago, Hal Nail said:

 

 

 

Thanks for this, but this appears to be about importing from the EU. I am not planning to import from the EU, but from Japan and so I don't think this is relevant to my particular case.

[cnw6847]

If you keep it under the £135 you won't get any charges.

 

Thats what i've found on a couple of orders from Japan.

 

 

[melmerby]

47 minutes ago, cnw6847 said:

If you keep it under the £135 you won't get any charges.

Only because there aren't enough staff to enforce the rules.

 

You should be paying 20% VAT as there is now no "free" limit as there was pre-Brexit.

Edited June 30, 2023 by melmerby

[Andy Hayter]

2 hours ago, TEAMYAKIMA said:

 

Thanks for this, but this appears to be about importing from the EU. I am not planning to import from the EU, but from Japan and so I don't think this is relevant to my particular case.

 

It is exactly the same whether EU, NA, Asia or Timbuktoo.

 

[Hal Nail]

3 hours ago, TEAMYAKIMA said:

 

Thanks for this, but this appears to be about importing from the EU. I am not planning to import from the EU, but from Japan and so I don't think this is relevant to my particular case.

I think the point of that thread is that now the UK isnt in the EU, then imports from EU countries would be taxed by the UK the same as anywhere else, eg Japan.

 

I haven't seen anything particularly convincing or definitive anywhere though so I just avoid importing, or assume I might get taxed.

[BernardTPM]

2 hours ago, melmerby said:

You should be paying 20% VAT as there is now no "free" limit as there was pre-Brexit.

And the "free" limit would have disappeared when the new VAT rules came in EU wide last July anyway.

[jollysmart]

Imports from Japan are not subject to tax if under £135, which given the low prices that can be available sometimes makes considerable bargain.

 

[melmerby]

48 minutes ago, jollysmart said:

Imports from Japan are not subject to tax if under £135, which given the low prices that can be available sometimes makes considerable bargain.

 

And where did you get that information from?

Obviously not from HMRC where the rules are clearly laid out

Vat of 20% is payable on all goods* coming into this country from everywhere, the £135 limit is for how the tax is paid, not an "up to" tax free limit.

 

It's all here in black and white: https://www.gov.uk/goods-sent-from-abroad/tax-and-duty

 

* Items classed as gifts are tax free up to a limit of £39

 

[jollysmart]

Try the website you quoted?

 

":You will not have to pay anything to the delivery company to receive goods worth less than £135 unless they’re gifts over £39 or excise goods (for example, alcohol and tobacco)." 

[melmerby]

1 hour ago, jollysmart said:

Try the website you quoted?

 

":You will not have to pay anything to the delivery company to receive goods worth less than £135 unless they’re gifts over £39 or excise goods (for example, alcohol and tobacco)." 

You have to read it all

 

Goods worth £135 or less in total

If you bought the goods yourself and they are not excise goods, the seller will have included VAT in the total you paid. (my underlining)

You pay VAT when you buy the goods or to the delivery company before you receive them.

If you have to pay VAT to the delivery company, it’s charged on the total package value, including:

• the value of the goods
• postage, packaging and insurance
• any duty you owe

 

It's because the seller should 've collected the VAT and passed on the VAT to HMRC

The seller needs to register for UK VAT to do that, most haven't.

Ebay have however, so the goods will have 20% VAT collected at the point of sale.

Over £135 you have to pay the VAT, normally when the goods are delivered by the delivery company.

 

There's no getting around it, all goods imported to the UK should have VAT added.

If your parcel is intercepted for checking and it hasn't had UK VAT paid, they can bill you and Royal Mail will collect it and charge you extra for the privilege!

 

I've bought several items from Germany in the last 12 months.

Those bought via ebay had 20% VAT added to the seller's price at checkout. They will have a VAT declaration attached to the parcel.

Those bought direct just came through without being checked, with just a standard custom's declaration* attached by the seller. (No UK VAT declaration)

 

* Description of goods and value in €

 

They are short of staff to monitor all goods arriving in the UK and I would expect they are concentrating resources on excise goods or contraband, so leaving most of the normal purchases alone.

Edited June 30, 2023 by melmerby

[cnw6847]

23 hours ago, melmerby said:

Only because there aren't enough staff to enforce the rules.

 

You should be paying 20% VAT as there is now no "free" limit as there was pre-Brexit.

 

I can only say how I experience things as requested.

 

If I was asked to pay 20% VAT I would have.

 

If you want certain products you have to pay for them, you won't get a Toma MW HOn3 Porter from anywhere else.

 

Maybe if things were run better and there wasn't so much waste more people could be employed but we'd be getting into politics and we're not going there.

 

 

 

 

 

[DenysW]

8 hours ago, melmerby said:

I've bought several items from Germany in the last 12 months.

Those bought via ebay had 20% VAT added to the seller's price at checkout.

Those not bought via eBay (in my case mostly the combination of ModelbahnshopLippe and Fedex) arrive untaxed below £135. Above £135 Fedex charge about £15 to collect the VAT. The discounts from the German shops and the cost of both shipping and the tax handling fee make it economic to buy direct only over about £250. There's an entire thread on this under German modelling.

[melmerby]

Even those bought via ebay worked out slightly cheaper, certainly not more expensive, than those from a UK retailer, even with the more expensive postage and eBay's stingy exchange rate.

I didn't buy from a UK retailer because they were OOS and no sign of re-stock.

[jollysmart]

23 hours ago, melmerby said:

You have to read it all

 

Goods worth £135 or less in total

If you bought the goods yourself and they are not excise goods, the seller will have included VAT in the total you paid. (my underlining)

You pay VAT when you buy the goods or to the delivery company before you receive them.

If you have to pay VAT to the delivery company, it’s charged on the total package value, including:

• the value of the goods
• postage, packaging and insurance
• any duty you owe

 

It's because the seller should 've collected the VAT and passed on the VAT to HMRC

The seller needs to register for UK VAT to do that, most haven't.

Ebay have however, so the goods will have 20% VAT collected at the point of sale.

Over £135 you have to pay the VAT, normally when the goods are delivered by the delivery company.

 

There's no getting around it, all goods imported to the UK should have VAT added.

If your parcel is intercepted for checking and it hasn't had UK VAT paid, they can bill you and Royal Mail will collect it and charge you extra for the privilege!

 

I've bought several items from Germany in the last 12 months.

Those bought via ebay had 20% VAT added to the seller's price at checkout. They will have a VAT declaration attached to the parcel.

Those bought direct just came through without being checked, with just a standard custom's declaration* attached by the seller. (No UK VAT declaration)

 

* Description of goods and value in €

 

They are short of staff to monitor all goods arriving in the UK and I would expect they are concentrating resources on excise goods or contraband, so leaving most of the normal purchases alone.

 

I thought we were talking about Japan, which I quoted, I have never been charged VAT on things below £135 from Japan, I have no idea if Japan charges VAT or not, they quote the price and postage, as the section I quoted clearly says you wlll not have to make payment to the delivery company for goods under £135, real life experience.

[melmerby]

17 minutes ago, jollysmart said:

 

I thought we were talking about Japan, which I quoted, I have never been charged VAT on things below £135 from Japan, I have no idea if Japan charges VAT or not, they quote the price and postage, as the section I quoted clearly says you wlll not have to make payment to the delivery company for goods under £135, real life experience.

We are talking about everywhere outside the UK. I believe Japan comes under that definition.😉

 

The VAT is nothing to do with the local taxation but UK VAT which foreign firms are supposed to collect on behalf of the UK.

However as I explained, most aren't registered to collect UK VAT so will sell to you at their local price, (with or without local taxes).

If you haven't paid UK VAT on the purchase, you can get charged on the goods arrival in the UK.

In practice this normally doesn't happen as the staff aren't available to check every item for an accompanying VAT paid declaration.

 

If you buy via eBay for goods up to £135 you will pay VAT and the parcel will have the declaration attached to show this.

 

[jollysmart]

10 hours ago, melmerby said:

We are talking about everywhere outside the UK. I believe Japan comes under that definition.😉

 

The VAT is nothing to do with the local taxation but UK VAT which foreign firms are supposed to collect on behalf of the UK.

However as I explained, most aren't registered to collect UK VAT so will sell to you at their local price, (with or without local taxes).

If you haven't paid UK VAT on the purchase, you can get charged on the goods arrival in the UK.

In practice this normally doesn't happen as the staff aren't available to check every item for an accompanying VAT paid declaration.

 

If you buy via eBay for goods up to £135 you will pay VAT and the parcel will have the declaration attached to show this.

 

 

I just buy straight from the dealer, you can't use Ebay as an arbiter as it has its own rules. Sadly we both have our views and we are unlikely to agree, but if the £135 no tax limit means nothing why is it quoted?

[Michael Hodgson]

 

12 hours ago, jollysmart said:

 

I have no idea if Japan charges VAT or not, they quote the price and postage,

 

It doesn't matter whether or not Japan does charge VAT.  If you're charged VAT it's British VAT you'd be paying. 

 

VAT is a French idea, a much more complicated version of the Purchase Tax we used to have before we joined the Common Market, or the Sales Tax they have in the USA, and which we were required to introduce as a condition for joining Europe.

Most countries that do charge VAT or sales taxes don't apply it to goods that are exported to other countries, but do charge it on imports.

Now we've left, Britain still charges VAT on imports (of certain goods) regardless of what foreign taxes might already have been paid, so VAT is payable whether you buy from Japan or the EU.

 

All EU countries (which obviously doesn't include Japan) charge VAT because the EU is a "single market", and so import/export within the EU doesn't give rise to these additional charges at borders.  But that is what this country voted to leave and is why we've had traffic jams at customs posts.  Leaving the EU didn't affect the formalities for trading with Japan however.  If you're not charged on taxable goods, basically you've "got away with it" because they don't have enough staff to collect all the taxes they're supposed to, and they are trying harder to collect it where the value is more significant and failing to deal with the smaller stuff.

Edited July 2, 2023 by Michael Hodgson

[jollysmart]

So what is the £135 limit for if Vat etc is still charged and yet the governments own website says that under £135 you will not have to pay anything to the delivery company? 

[Jeremy Cumberland]

3 minutes ago, jollysmart said:

So what is the £135 limit for

Although the government guidelines are not at all clear, it is an arrangement that applies to goods imported from Europe from businesses registered for UK VAT. The guidelines state:

Quote

 

Consignments valued at £135 or less

The seller must charge and account for VAT at the point of sale

 

Some European sellers are registered for VAT with UK tax authorities, and they charge VAT on purchases from the UK for shipments valued at £135 or less. UK buyers pay ordinary shipping costs and aren't charged anything more.

 

However, if the seller isn't registered to pay UK VAT, and sellers in Japan won't be (I don't think the facility even exists), then the more general rule of being charged VAT on imports will apply, and this has no lower limit (it used to, but this has now been abolished). Buyers might therefore expect to receive bills from delivery companies for VAT and handling charges.

 

A further "however" is that import VAT is often not charged on low value items even when it should be. Therefore, it is quite likely that you will buy cheap items from Japan and not get charged anything. Really, it has always been like this, that a blind eye was turned to low value imports, but from what I hear it is more prevalent now, and the £135 value seems to being used as a general benchmark. If you are importing £100 of goods from the US or Japan, you should be charged UK VAT via the delivery company, but chances are you won't be.

[jollysmart]

12 minutes ago, Jeremy Cumberland said:

Although the government guidelines are not at all clear, it is an arrangement that applies to goods imported from Europe from businesses registered for UK VAT. The guidelines state:

Some European sellers are registered for VAT with UK tax authorities, and they charge VAT on purchases from the UK for shipments valued at £135 or less. UK buyers pay ordinary shipping costs and aren't charged anything more.

 

However, if the seller isn't registered to pay UK VAT, and sellers in Japan won't be (I don't think the facility even exists), then the more general rule of being charged VAT on imports will apply, and this has no lower limit (it used to, but this has now been abolished). Buyers might therefore expect to receive bills from delivery companies for VAT and handling charges.

 

A further "however" is that import VAT is often not charged on low value items even when it should be. Therefore, it is quite likely that you will buy cheap items from Japan and not get charged anything. Really, it has always been like this, that a blind eye was turned to low value imports, but from what I hear it is more prevalent now, and the £135 value seems to being used as a general benchmark. If you are importing £100 of goods from the US or Japan, you should be charged UK VAT via the delivery company, but chances are you won't be.

 

The Government website says you won't have to pay anything to the delivery company under £135, which has been my experience with such items from Japan which is. what the original question was about, not the EU and its VAT regime.

Edited July 2, 2023 by jollysmart

[Jeremy Cumberland]

4 hours ago, jollysmart said:

 

The Government website says you won't have to pay anything to the delivery company under £135, which has been my experience with such items from Japan which is. what the original question was about, not the EU and its VAT regime.

Are you a business importer? The web page you quoted from earlier (https://www.gov.uk/goods-sent-from-abroad/tax-and-duty) is for business importers. The website I and others have quoted from is for anyone buying from abroad (https://www.gov.uk/guidance/vat-and-overseas-goods-sold-directly-to-customers-in-the-uk).

 

In practice, as most people on this thread have said, you probably won't incur charges from the delivery company for goods under £135 even if you are just a private individual. However HMRC still have the right to charge VAT for imported goods worth less than £135 unless British VAT has already been charged by the seller, which is an option open to European businesses to simplify direct selling into Britain.

 

The EU's VAT regime has nothing to do with it, but I think the British Government allowing overseas direct sellers to Britian to register for British VAT only applies to European businesses.

[RichardT]

9 hours ago, jollysmart said:

The Government website says you won't have to pay anything to the delivery company under £135, which has been my experience with such items from Japan which is. what the original question was about, not the EU and its VAT regime.

I sometimes wonder why people try to help other people on RMWeb.  (And why people adopt the usernames that they do...)

 

This conversation is beginning to remind me of the enquiries I used to handle at the NRM about copyright, when we'd start by explaining explain what the letter of the law said about what would happen re copyright issues.  If we were dealing with a minor technical breach or a very grey area we sometimes tried to be helpful by suggesting a risk-management approach to copyright, doing an assessment of what in real life was likely to happen given the spirit of the law and the priorities/resources/financial implication concerned e.g. as regards what copyright owners might or might not do.  In particular we would sometimes drop heavy hints that perhaps it might be better simply not to raise the question with us because if you didn't raise the question then we wouldn't have to answer, because if we had to answer in writing we would have to stick to the letter of the law.

 

I'm obviously not going to give specific examples, but the outcome was that some people immediately understood that we were giving them a nod and a wink. But others (and this seems to be a characteristic of very many railway enthusiasts) seemingly didn't listen to a word we were saying, or couldn't comprehend written English, or didn't get the concept of nuance, and kept insisting on an explicit black and white yes/no answer...  So we stopped trying to be helpful, and stuck to the strict letter of the law, which usually meant saying "no, you can't do that".

 

RichardT

Edited July 2, 2023 by RichardT
Clarifying